Indian satellite internet ventures face a potential financial hurdle as the government mulls over a fee hike. The Department of Telecommunications (DoT) is considering a bold move to increase the adjusted gross revenue (AGR) charge for satellite operators to 5%, a 1% jump from the previous proposal. But here's the catch: this decision could impact not only Indian companies but also global giants like Elon Musk's Starlink and Amazon's Kuiper.
The Economic Times revealed that the DoT's revised proposal will be sent back to the Telecom Regulatory Authority of India (Trai) for review. Trai had initially suggested a 4% AGR fee with an additional rural incentive, but the DoT found this challenging to implement. The DoT argues that a flat 5% charge on AGR for satellite communication services is more feasible, especially as the sector expands to retail consumers, unlocking a vast revenue stream.
Currently, only geostationary orbit (GSO) operators like Hughes and Nelco are permitted in India, catering mainly to businesses. However, the game is about to change with the entry of non-GSO players such as Starlink, Amazon Kuiper, Eutelsat OneWeb, and Jio Satellite, who are gearing up to offer direct-to-consumer broadband services. This shift could dramatically increase India's space economy, estimated to hit $44 billion by 2033, with an annual satcom revenue opportunity of $1 billion.
While some operators have secured permits, spectrum allocation is on hold until pricing is finalized. The DoT's decision to reject Trai's recommendation to subsidize satellite terminals from the Digital Bharat Nidhi (DBN) adds another twist, citing the fund's lack of direct subsidy mechanisms.
As the DoT prepares to set the rules for spectrum allocation, the stage is set for a significant transformation in India's satellite internet landscape. Will this fee hike encourage or hinder the growth of satellite internet services in India? The comments section awaits your insights!
