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The Indian government has made a significant decision regarding the allocation of spectrum for satellite broadband, siding with Elon Musk's Starlink and rejecting proposals from Indian billionaires Mukesh Ambani and Sunil Mittal to auction the resource. This decision signals a major shift in India's approach to satellite broadband and could have far-reaching implications for the country's telecommunications landscape.
Communications Minister Scindia has stated that the spectrum will be allocated administratively, following the International Telecommunications Union (ITU) guidelines, which prioritize assignment over auctions. This approach aligns with global practices and aims to expedite the rollout of satellite broadband services in India.
However, the allocation will not be free. The Telecom Regulatory Authority of India (TRAI) will determine a price for the spectrum, ensuring that the government benefits from this valuable resource. This move addresses concerns raised by Ambani and Mittal, who argued that auctioning the spectrum would create a level playing field for legacy operators who have invested heavily in terrestrial infrastructure and spectrum acquisition through auctions.
Ambani's Reliance Jio and Mittal's Bharti Airtel, India's largest and second-largest telecom operators, respectively, have expressed concerns about the administrative allocation. They argue that giving away the spectrum at a fixed price creates an uneven playing field, as they had to compete fiercely in auctions to acquire spectrum for their terrestrial networks.
Despite these concerns, the government's decision aligns with the global trend of administrative allocation for satellite broadband. Starlink, along with other global players like Amazon's Project Kuiper, have advocated for this approach to ensure a faster and more cost-effective entry into the burgeoning satellite broadband market.
This decision could significantly impact the Indian telecom market. It opens the door for foreign companies like Starlink to offer voice and data services in India, potentially disrupting the existing market dynamics and providing consumers with new choices. The government's commitment to administrative allocation signals its intention to foster a more competitive and innovative telecom landscape, driven by the potential of satellite broadband technology.
However, the decision also raises questions about the future of India's telecom policy and the government's approach to spectrum allocation. The government's decision to allocate spectrum for satellite broadband administratively while other segments of the market face auctions could lead to inconsistencies and potential legal challenges. It remains to be seen how these challenges will be addressed and how the government will balance its commitment to promoting competition and innovation with the need to ensure a level playing field for all players in the telecom market.
Source: In a win for Elon Musk, Scindia says no to spectrum auction pitch from Ambani, Mittal