Elon Musk's Starlink set to benefit as Scindia says 'no' to spectrum auction pitch, cites ITU policy

The government will set the price for the satellite spectrum rather than selling it through competitive bidding, Union communications minister Jyotiraditya Scindia has said.

In an interview with news agency PTI, Scindia said the decision is in line with the global standards set by the International Telecommunication Union (ITU), a UN agency that sets policies for global satellite spectrum use.

"Every country has to follow the International Telecommunications Union (ITU), which is the organisation that lays out the policy for spectrum in space or satellites, and the ITU has been very clear in terms of the spectrum being given out on an assignment basis. In addition, if you look across the world today, I cannot think of a single country that auctions spectrum for satellite," Scindia said.

India is a member of the International Telecommunication Union (ITU), a UN agency for digital technology.

This could prove to be a big boost to global companies like Starlink trying to enter the Indian market.

Starlink, along with other satellite internet providers like Amazon’s Project Kuiper, back an administrative allocation. These companies have argued that buying spectrum at a government-set price allows them to enter markets more easily and offer affordable internet services, especially in remote areas where laying cables is difficult.

However, Mukesh Ambani’s Reliance Jio recently wrote a letter to the telecom ministry, asking for a fair auction system for satellite spectrum to ensure a level playing field between new satellite providers and existing telecom companies.

At an industry event last month, where Prime Minister Narendra Modi was also present, Airtel’s Sunil Mittal articulated the need to use bidding for such allocation.

"Satellite companies who have ambitions to come to urban areas, serving elite, retail customers, just need to take the telecom licences like everybody else. They should be bound with the same conditions, they need to buy the spectrum as telecom companies buy. They need to pay the license fee as telecos do and secure networks like telecos do,” Mittal said.

Both Reliance Jio and Bharti Airtel are vying for a piece of the satellite broadband segment as well.

Scindia said the Telecom Act of 2023 passed in December has put the matter in 'Schedule 1', which means that the Satcom spectrum will be allocated administratively.

This also means that companies like Starlink will pay a fixed government-set price for satellite spectrum rather than competing in a costly auction.

While Starlink has applied for a licence to start operations in India, Scindia offered no clues on the fate of his application.

The minister said that the regulatory process is very clear and transparent. "We are open to looking at the application of any entity that wants to invest in India at this point in time. I think only one or two licenses have been given out. And whoever else wants to participate, India is surely going to welcome that," the minister said.

While Starlink awaits the final go-ahead to operate in India, telecom companies like Reliance Jio and Airtel worry that they could lose customers to new satellite internet services. Satellite internet can reach rural and remote areas more easily than traditional telecom services, allowing companies like Starlink to potentially capture market share in a country with a rapidly growing need for internet access.