TL; DR
- The spectrum charges will be applicable to both geostationary orbit (GSO) and non-geostationary orbit (NGSO) satellites, including low-earth orbit (LEO) and medium-earth orbit (MEO) systems.
- Furthermore, the government could subsidize the satellite user terminals in rural areas to support the initial adoption.
- Last but not least, there’s an 8% license fee (as part of the country’s telecom licensing norms). While the fee is also applicable to telecom providers, it can increase the financial burden on satcom companies.
The Telecom Regulatory Authority of India has proposed that satellite-based telecommunications companies (like Starlink) should pay 4% of their adjusted gross revenue (AGR) as spectrum charges to the Indian government. This is much higher than what the satcom companies, including Elon Musk’s Starlink and Amazon’s Kuiper Systems, had initially lobbied for – 1% of the AGR.
Spectrum Charges: 4% Of Annual Gross Revenue
The spectrum charges will be applicable to both geostationary orbit (GSO) and non-geostationary orbit (NGSO) satellites, including low-earth orbit (LEO) and medium-earth orbit (MEO) systems. In addition to the spectrum charges, an annual charge of Rs. 3,500 per MHz has also been proposed to prevent hoarding (which could add another Rs. 70 lakh expense to satcom’s yearly operation costs).
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Satcom Providers To Pay Custom Acquisition Fee In Urban Areas
The regulator has also proposed a Rs. 500 per subscription customer acquisition fee (yearly) for urban subscribers. However, no such fee applies to rural subscribers. From what it looks like, the fee aims to encourage satcom providers to focus on rural and remote regions where conventional terrestrial networks aren’t viable.
Furthermore, the government could subsidize the satellite user terminals in rural areas to support the initial adoption. Adopting a cautious approach to the evolving satcom market, TRAI recommends that the satcom spectrum should only be allocated for five years (initially), extendable by another two years.
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License Fee, Along With Other Charges, Could Make Satcom Services Expensive
Last but not least, there’s an 8% license fee (as part of the country’s telecom licensing norms). While the fee is also applicable to telecom providers, it can increase the financial burden on satcom companies, as they also have to pay the spectrum charges at 4%, the urban subscription fee, and the annual charge.
With higher operation costs in the subcontinent, satcom service providers like Starlink (which recently received a Letter of Intent from the regulatory authority) might pass on the costs to consumers, increasing the price of their services. While this could be a way to restrict the service to the required areas, it will surely impact the satcom providers’ business plans and profitability prospects.
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