TRAI favors 5-year satellite spectrum licence, defies Starlink’s 20-year demand: Reports

According to KPMG estimates, India’s satellite communication sector is projected to grow more than tenfold, reaching $25 billion by 2028.

The Telecom Regulatory Authority of India (TRAI) is set to recommend that satellite broadband spectrum be allotted for a period of around five years to assess initial market adoption, a move that challenges Elon Musk's Starlink, which has been pushing for a 20-year permit. This development was reported by Reuters, citing a senior government source.

TRAI is currently working on key recommendations for the federal government, which include the proposed time frame and pricing structure for satellite spectrum. The spectrum will be allotted administratively rather than through an auction.

The move comes shortly after Musk and billionaire Mukesh Ambani announced a partnership that will enable Starlink devices to be sold through Reliance’s retail stores, enhancing its distribution reach in India.

While Starlink has been lobbying for a 20-year spectrum allotment to support "affordable pricing and longer-term business plans," Reliance has suggested a three-year term, with a reassessment of the market thereafter. Another Indian telecom giant, Bharti Airtel, has advocated for a licence period of 3-5 years. Both Airtel and Starlink have signed distribution deals with Reliance for Starlink devices.

According to the senior government source quoted by Reuters, TRAI is inclined to support a shorter five-year licence period. "This will help understand how the market stabilises, so there’s no point going beyond five years," the source stated. The source also indicated that this approach will allow New Delhi to review and revise spectrum prices after the initial five-year period as the market evolves.

The government source added that TRAI’s final recommendations on the licence time frame and per megahertz spectrum pricing are expected to be completed within a month. These recommendations will then be submitted to India’s telecom ministry for further action.

The official also noted that satellite spectrum pricing "will be substantially lower" than conventional telecom licences, which are typically awarded via auction for 20 years.

According to KPMG estimates, India’s satellite communication sector is projected to grow more than tenfold, reaching $25 billion by 2028.

TRAI, Airtel, Reliance, and Starlink did not immediately respond to Reuters’ queries. Moneycontrol could not independently verify the report.