Allocating satellite spectrum: Jio vs Starlink spat and why most countries avoid auctions

The Telecommunications Act, 2023, has added spectrum for satellite communication in the list of administrative allocation. The Department of Telecommunication (DoT) had later asked the Telecom Regulatory Authority of India (TRAI) to come up with a methodology to assign the spectrum.

With TRAI exploring pricing models for the service, Jio wrote to the regulator making a case for auction of satellite spectrum. Their essential argument is that administrative allocation may not be able to bring about a level playing field between satellite and terrestrial services. Musk, however, responded to the submissions, saying: ““That would be unprecedented, as this spectrum was long designated by the ITU as a shared spectrum for satellites”.

With Telecom Minister Jyotiraditya Scindia saying India will follow the global norm by allocating satellite spectrum, here’s a low down on what the service is and how countries have tried auctioning the airwaves to no avail:

What is satellite communication, and what benefits does it offer to end-users?

Satellite communication services rely on an array of satellites in orbit to offer connectivity to homes and businesses on the ground. They are an alternative to ground based communication, called terrestrial networks, such as cable, fibre, or digital subscriber line (DSL), and they don’t require wires to transmit data.

For end-users, satellite-based communication and broadband services offer benefits on two key points: wider coverage, and a more resilient network. Even though the latency of satcom services can at times be higher than terrestrial broadband networks, they can cover vast swathes of areas with very little physical equipment needing to be installed.

Satellites that orbit in space are vital for communication networks to reach the farthest corners even in remote locations that mobile telephony cannot access. Thus, it is generally understood that when satcom services will become more mainstream, a number of low lying areas, rural areas and areas impacted by frequent exigencies could benefit from constant connectivity.

Satellite-based internet is also generally believed to be more resilient than terrestrial-based communication services since they have comparatively fewer components on the ground. The equipment for satellite communication is, therefore, less likely to sustain damage during extreme weather and other emergencies.

A latest report by KPMG in India, has estimated that India’s satcom sector, which currently stands at $2.3 billion a year, will reach $20 billion by 2028. At present, the country ranks fourth in terms of investments in the sector, globally. According to Morgan Stanley, there are 290.4 million households in India which are untapped with broadband and that can be a strong market opportunity for satellite operators to tap.

How do countries around the world assign satellite spectrum to operators?

It is first important to understand the key difference between spectrum for terrestrial networks and satellite communication, and why the distinction between allocation and auctioning arises in the first place. For terrestrial mobile services, the spectrum is exclusive and is managed only by a single mobile operator in a given geographic area; therefore, this cannot be shared between or amongst operators. While in the case of satellites, the same spectrum is non-exclusive in nature and it can be used by multiple satellite operators to serve the same geographic area.

The general trend, therefore, is of allocating the spectrum administratively.

A few countries, such as the United States of America, Brazil and Saudi Arabia, have conducted auctions for frequency spectrum in the past. The US and Brazil conducted an auction of satellite spectrum along with orbital slots. However, both the countries have since reverted to administrative assignment after finding the process infeasible.

The US last conducted an auction for satellite spectrum in 2004 for three domestic orbital slots for broadcasting services. Since then, it has abandoned satellite auctions. In the US, an annual regulatory fee for VSAT and equivalent C-Band antennas operating in the 12 and 14 GHz is $595 per licence or authorisation.

In 2020, Brazil amended its regulatory framework to replace satellite auctions with administrative licensing. Though satellite landing rights are assigned through bidding in the country, the spectrum to be used for satellite services is not auctioned separately.

Saudi Arabia recently conducted an auction of spectrum in the S-band, which ranges from 2 GHz to 4 GHz and is used for mobile satellite services (MSS) as well as weather and air traffic control applications. However, since the technical characteristics of the S-band are such that it is assigned on an exclusive basis for MSS, auction can be conducted in a manner similar to the spectrum auction for terrestrial mobile services.