NEW DELHI: An intense verbal battle erupted during a high-stakes meeting on Friday between global satellite firms Elon Musk’s Starlink and Jeff Bezos-owned Amazon Kuiper, and India’s top three telecom operators to discuss satellite spectrum pricing mechanism and other modalities.
While Reliance Jio, Bharti Airtel and Vodafone Idea argued for a level playing field citing specific instances, Starlink refuted their demands, even stating that in case 5G mobile spectrum can be shared between telcos, it should be given administratively, or without any auction.
The high-octane open house discussion conducted by Telecom Regulatory Authority of India ( Trai) on the issue of satellite spectrum pricing lasted over six hours with more than 210 stakeholders taking part. However, Starlink and Indian telcos Reliance Jio, Bharti Airtel and Vodafone Idea dominated the proceedings.
Emotions ran high during the discussions with Starlink and telcos engaging in point-to-point counter-questioning and debunking claims made by each other.
Trai is holding the discussions as it looks to issue recommendations on satellite spectrum pricing and other modalities soon.Satellite broadband services are yet to start in India as the government has yet to frame rules on pricing and spectrum allocation. That can happen only after Trai issues its recommendations.
Currently, only Bharti Group-backed Eutelsat OneWeb and a Jio-SES combine have the statutory clearances and permits to start satcom services in India. Applications of Starlink and Amazon Kuiper among others are pending with Indian authorities. US-based Globalstar too is keen to expand its satellite broadband services to India.
During the meeting, Starlink India director Parnil Urdhwareshe argued that the value of spectrum increases when used by several satellite operators, while declining in case of exclusive allocation to operators. At this moment, Reliance Jio’s regulatory head Ravi Gandhi sought to take a sarcastic tone by informing the house that telcos spend lakhs of crores for buying ‘inefficient’ spectrum.
“So, finally, it is decided that the efficient use or efficient spectrum, should be given free of cost, but so-called inefficient use, should be charged on the market price. It’s a statement which is wrong at the face of it,” Gandhi remarked.
The Jio executive highlighted that telcos have to buy spectrum through auctions by paying a hefty price and above that, they have to pay 2-3% spectrum usage charge (SUC), and in case of sharing among themselves, they have to pay an additional 5% SUC. But the next generation satellite firms want spectrum free, paying only 0.5 to 1% SUC and offering the same set of services, he said.
“They want to offer services in the same market, use the similar spectrum but want it free of cost, and only pay 0.5 or 1% SUC,” Gandhi said.
On satcom being a nascent market, the telcos highlighted that Starlink is talking about providing high-speed broadband connectivity to all and that it already has about 7000 low-earth orbit (LEO) satellites with the figure poised to touch 35,000 in the coming future.
Echoing the sentiments, Bharti Airtel regulatory head Rahul Vatts said due to recent developments in satcom, there is an urgent need for Trai to ensure a level playing field with terrestrial operators.
“While satcom has been there for 2 to 3 decades but with the advancement in technology, these services are increasingly becoming substitutable to terrestrial services because of higher capacities and better latencies and speeds which are getting comparable to terrestrial networks,” Vatts said.
Vodafone Idea’s Ambika Khurana said the three telcos have been bidding for spectrum for many years. “We understand how the pricing works when we bid and this pricing is linked to market forces, in a very competitive space determined by a monetary value of services, future growth and innovation, existing applications, surrounding use cases, cost of deployment, and maintenance and a lot of competition that exists into that. So, Trai should keep the factors in mind while giving its recommendations,” she said.
Starlink’s Urdhwareshe, however, debunked the telcos’ demands stating that the two sets of services are different and cannot be compared. He said mobile spectrum is more expensive as it is used exclusively and so the opportunity cost should be factored in as it can serve many users per unit kilometre and put to use in several ways. The current valuation of mobile spectrum was defined after years of auctions but the value of satellite spectrum in rupee terms has not been defined as no such data exists in India, he said.
“The value of satellite spectrum must be maximised, not the price. The value is directly equal to the number of users who can benefit from its use. Multiple operators with lots of users maximise that value, and in a proportionate AGR (adjusted gross revenue) formula maximises revenue generated for the government as well,” Urdhwareshe said.
Amazon executives too supported the AGR-based formula for satellite spectrum pricing. The telcos also highlighted coordination issues going forward on the matter and asked the regulator to finalise terms of implementation.
A telecom executive argued that since Starlink’s high bandwidth internet system covers the whole earth, it would possibly deliver more than 90% off all space-based internet traffic next year. “So, 90% of the traffic is by one company, and then we say we are effectively coordinating, because there is only one operator with whom you are coordinating. When multiple constellations come, there would be issues,” he said.
Stressing their points, the telcos also said the Telecommunications Act has included specific satellite services for administrative allocation and the rest should be auctioned. The telcos also countered satcom firms' shared spectrum claim stating that since mobile satellite services (MSS) have to be given through exclusive assignments, the spectrum should be auctioned.
Starlink also dismissed claims about indulging in predatory pricing. “We encourage Trai and all interested participants to simply look at Starlink operations in any of the 113 markets we are live in today; we maintain absolute transparency on Starlink pricing and performance around the world,” Urdhwareshe said. He, however, added the company is proud to make satellite broadband affordable and certain other satellite operators are committed to doing the same.
Communications minister Jyotiraditya Scindia on Wednesday said not a single country auctions spectrum for satellite services, and every country (including India) has to follow the International Telecommunications Union (ITU), which lays out the policy on assignment of satellite spectrum. This, since India is a member of the ITU, the UN’s specialised global agency for information & communication technologies (ICT) and spectrum management. Musk has termed the comments ‘promising’.
India’s space sector regulator, IN-SPACe estimates that the country’s space economy has the potential to scale $44 billion by 2033, comprising about 8% of the global share from around 2% currently.
( Originally published on Nov 08, 2024 )
While Reliance Jio, Bharti Airtel and Vodafone Idea argued for a level playing field citing specific instances, Starlink refuted their demands, even stating that in case 5G mobile spectrum can be shared between telcos, it should be given administratively, or without any auction.
The high-octane open house discussion conducted by Telecom Regulatory Authority of India ( Trai) on the issue of satellite spectrum pricing lasted over six hours with more than 210 stakeholders taking part. However, Starlink and Indian telcos Reliance Jio, Bharti Airtel and Vodafone Idea dominated the proceedings.
Emotions ran high during the discussions with Starlink and telcos engaging in point-to-point counter-questioning and debunking claims made by each other.
Trai is holding the discussions as it looks to issue recommendations on satellite spectrum pricing and other modalities soon.Satellite broadband services are yet to start in India as the government has yet to frame rules on pricing and spectrum allocation. That can happen only after Trai issues its recommendations. Currently, only Bharti Group-backed Eutelsat OneWeb and a Jio-SES combine have the statutory clearances and permits to start satcom services in India. Applications of Starlink and Amazon Kuiper among others are pending with Indian authorities. US-based Globalstar too is keen to expand its satellite broadband services to India.
During the meeting, Starlink India director Parnil Urdhwareshe argued that the value of spectrum increases when used by several satellite operators, while declining in case of exclusive allocation to operators. At this moment, Reliance Jio’s regulatory head Ravi Gandhi sought to take a sarcastic tone by informing the house that telcos spend lakhs of crores for buying ‘inefficient’ spectrum.
“So, finally, it is decided that the efficient use or efficient spectrum, should be given free of cost, but so-called inefficient use, should be charged on the market price. It’s a statement which is wrong at the face of it,” Gandhi remarked.
The Jio executive highlighted that telcos have to buy spectrum through auctions by paying a hefty price and above that, they have to pay 2-3% spectrum usage charge (SUC), and in case of sharing among themselves, they have to pay an additional 5% SUC. But the next generation satellite firms want spectrum free, paying only 0.5 to 1% SUC and offering the same set of services, he said.
“They want to offer services in the same market, use the similar spectrum but want it free of cost, and only pay 0.5 or 1% SUC,” Gandhi said.
On satcom being a nascent market, the telcos highlighted that Starlink is talking about providing high-speed broadband connectivity to all and that it already has about 7000 low-earth orbit (LEO) satellites with the figure poised to touch 35,000 in the coming future.
Echoing the sentiments, Bharti Airtel regulatory head Rahul Vatts said due to recent developments in satcom, there is an urgent need for Trai to ensure a level playing field with terrestrial operators.
“While satcom has been there for 2 to 3 decades but with the advancement in technology, these services are increasingly becoming substitutable to terrestrial services because of higher capacities and better latencies and speeds which are getting comparable to terrestrial networks,” Vatts said.
Vodafone Idea’s Ambika Khurana said the three telcos have been bidding for spectrum for many years. “We understand how the pricing works when we bid and this pricing is linked to market forces, in a very competitive space determined by a monetary value of services, future growth and innovation, existing applications, surrounding use cases, cost of deployment, and maintenance and a lot of competition that exists into that. So, Trai should keep the factors in mind while giving its recommendations,” she said.
Starlink’s Urdhwareshe, however, debunked the telcos’ demands stating that the two sets of services are different and cannot be compared. He said mobile spectrum is more expensive as it is used exclusively and so the opportunity cost should be factored in as it can serve many users per unit kilometre and put to use in several ways. The current valuation of mobile spectrum was defined after years of auctions but the value of satellite spectrum in rupee terms has not been defined as no such data exists in India, he said.
“The value of satellite spectrum must be maximised, not the price. The value is directly equal to the number of users who can benefit from its use. Multiple operators with lots of users maximise that value, and in a proportionate AGR (adjusted gross revenue) formula maximises revenue generated for the government as well,” Urdhwareshe said.
Amazon executives too supported the AGR-based formula for satellite spectrum pricing. The telcos also highlighted coordination issues going forward on the matter and asked the regulator to finalise terms of implementation.
A telecom executive argued that since Starlink’s high bandwidth internet system covers the whole earth, it would possibly deliver more than 90% off all space-based internet traffic next year. “So, 90% of the traffic is by one company, and then we say we are effectively coordinating, because there is only one operator with whom you are coordinating. When multiple constellations come, there would be issues,” he said.
Stressing their points, the telcos also said the Telecommunications Act has included specific satellite services for administrative allocation and the rest should be auctioned. The telcos also countered satcom firms' shared spectrum claim stating that since mobile satellite services (MSS) have to be given through exclusive assignments, the spectrum should be auctioned.
Starlink also dismissed claims about indulging in predatory pricing. “We encourage Trai and all interested participants to simply look at Starlink operations in any of the 113 markets we are live in today; we maintain absolute transparency on Starlink pricing and performance around the world,” Urdhwareshe said. He, however, added the company is proud to make satellite broadband affordable and certain other satellite operators are committed to doing the same.
Communications minister Jyotiraditya Scindia on Wednesday said not a single country auctions spectrum for satellite services, and every country (including India) has to follow the International Telecommunications Union (ITU), which lays out the policy on assignment of satellite spectrum. This, since India is a member of the ITU, the UN’s specialised global agency for information & communication technologies (ICT) and spectrum management. Musk has termed the comments ‘promising’.
India’s space sector regulator, IN-SPACe estimates that the country’s space economy has the potential to scale $44 billion by 2033, comprising about 8% of the global share from around 2% currently.
( Originally published on Nov 08, 2024 )
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