No first-mover advantage for Bharti-backed OneWeb as DoT may not offer provisional spectrum: Sources

Satcom

Eutelsat OneWeb will have to wait to launch its commercial satellite-based broadband communication services in India since the telecom department is awaiting recommendations from the Telecom Regulatory Authority of India (Trai) and has no plans to allocate provisional spectrum administratively.

“The matter is currently with Trai, and they have to issue a consultation paper on this, including allocation and terms and conditions. Any work at DoT can only proceed after Trai has finished. We don’t have any plan to consider any interim allocation to any player,” a top government source told Moneycontrol.

Eutelsat OneWeb recently urged the DoT to provisionally allot them the spectrum until the regulator completes the pricing and other terms of the consultation process.

Bharti Group Chairman Sunil Mittal last month informed the media that Bharti Group-backed Eutetsat OneWeb is ready to roll out the satellite broadband service and is awaiting a signal from the DoT having already conducted tests to demonstrate proof of concept to the army, navy and other government agencies.

Mittal had confirmed that Eutelsat OneWeb requested the government to accelerate the process. “We have given an undertaking to the DoT that you can even give us permission in the interim, and whatever the final decision is, we will comply with that… It is a wait from the DoT now. We are fully ready,” Mittal told the media. “The terminals are in India, we are just waiting… There is nothing we can do because we can’t light it up other than our test case, which has been approved.”

Eutelsat OneWeb and Reliance-owned Orbit Connect India have received the GMPCS licence and authorisation from IN-SPACe. However, global giants such as Elon Musk-led Starlink and Amazon-backed Project Kuiper have also sought authorisation from the government to offer satellite communication services in the country.

The official added that Amazon's application for the GMPCS licence is under evaluation after the company submitted all required details, including its network diagram, to the Department of Telecommunications (DoT). Starlink's application may take longer to process as the company needs to meet all government requirements.

“They (Amazon) have submitted documents but have not yet come close to approval. It will take some time,” he said.

Any entity that wants to offer satcom services in India must get approvals from IN-SPACe, a GMPCS licence, and spectrum from DoT.

The new telecom law enacted last year has cleared the way for allocating satellite broadband spectrum without auctioning it. The regulator had previously initiated consultations on assigning spectrum for satcom services in April 2023, but returned the reference to the DoT following the announcement of the new Telecommunications Act.

Earlier this year, the DoT sent a new reference seeking Trai's recommendations on terms and conditions for spectrum assignment to certain satellite-based telecom services. The regulator is working to come out with a consultation paper on the matter very soon.

The Telecommunications Act of 2023 allows satellite communication companies to obtain spectrum without auction for point-to-point communications. However, the provisions permitting VSAT operators to provide internet services to multiple independent subscribers may be interpreted differently than intended in the Telecommunications Act. Hence, there is a need to fine-tune VSAT licences.

These satcom companies have recently urged the government to allow them to serve other nations using their gateways in India. They want this permission to be included in the upcoming telecommunications authorisation regime, which is being developed under the provisions of the Telecom Act. However, approving this request would require the government to amend the Global Mobile Personal Communication by Satellite (GMPCS) licence, which is necessary for companies to provide satellite internet services in the country.

According to a study by Morgan Stanley, satellites could unlock the rural market, with the potential to cover over 500 million households globally, resulting in a $80-billion-per-annum market opportunity.

“We estimate more than 30 percent of global households do not have a fixed broadband connection. We believe this represents an untapped addressable household market for existing telcos and alternative tech, such as low Earth orbiting (LEO) satellites. APAC (Asia-Pacific) and LatAm (Latin America) are the two largest such markets, specifically India, Indonesia, the Philippines, Brazil and Mexico,” Morgan Stanley said in its September 4 note.

According to the note, India has 298.7 million households, yet fixed broadband penetration remained at just 3 percent as of 2023. This means 290.4 million households are still without broadband, offering a significant growth opportunity for satcom players.

To tap rural areas, Morgan Stanley sees satcom operators collaborate with telecom operators to improve service coverage and expand their reach. Notably, Jio has partnered with Luxembourg-based SES, and Eutelsat OneWeb has a partnership with Bharti Airtel for the Indian market.