The Department of Telecoms (DoT) says it will auction spectrum for satellite broadband players, going against the industry standard of simply allocating the frequencies
The Indian DoT has made the highly decision to auction spectrum for satellite broadband companies, eschewing the near universal convention of allocating the spectrum directly.
In most markets around the world, satellite players are directly allocated operating spectrum by the relevant regulatory bodies, with the satellite players paying licence fees accordingly.
This is in stark contrast to terrestrial mobile operators, who typically face an auction process when acquiring spectrum, typically driving up the expense, particularly when it comes to highly sought-after frequency bands.
India itself, for example, held a 4G spectrum auction earlier this year, raising around $11 billion in licence fees.
In the past, disgruntled though the mobile operators may have been at the disparity of the spectrum licencing laws, disputes were minimal. Ultimately, the satellite players were using different spectrum than their terrestrial peers and very few were offering consumer broadband in a meaningful sense, so what did it matte that the licencing process was different?
However, now, with the rise of satellite broadband players like Starlink and OneWeb, the lines between terrestrial and satellite broadband operators are beginning to blur, potentially driving the two sectors into direct competition.
This is the primary argument for India’s decision to auction the satellite spectrum: if these companies are set to compete in the same markets, they should face the same rules when it comes to spectrum.
But not all the Indian mobile market is in agreement. Bharti Airtel – which notably invested $1 billion into the burgeoning OneWeb low Earth orbit (LEO) satellite project – said earlier this year that there was little cause to auction spectrum for the satellite players, arguing that their use cases were very different from those of traditional mobile operators.
Exactly how and when this auction will take place is currently unclear, with the DoT suggesting that acquiring all of the necessary information from the Telecom Regulatory Authority of India (TRAI) and the wider industry “will take some time”, according to a letter sent in November.
Nonetheless, if this this auction does go ahead eventually and proves a success, it could spur other markets to take a similar approach, representing a considerable price hike for the burgeoning satellite industry.
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