Satcom rollout to follow security clearances, spectrum pricing finalisation: Scindia

Satellite communication services will be rolled out in India after companies in the segment, including Elon Musk-owned Starlink, meet security-related requirements and spectrum allocation is completed, Union Telecom Minister Jyotiraditya Scindia said.

In an interview to PTI, Scindia said the government will soon be in a position to allocate spectrum to satellite communication players such as Starlink, Eutelsat One and Jio SGS once the Department of Telecommunications (DoT) finalises spectrum pricing.

“There are two issues that need to be addressed. One by the licence holders OneWeb, Reliance Jio, and Starlink, which is to comply with security clearances regarding international gateways, ensuring data remains in India, and so on,” Scindia said.

He added that the government has already allocated provisional spectrum to satcom companies to enable them to demonstrate compliance capability with security agencies.

“They are in the process of doing that, so they need to comply,” the minister said.

Scindia said spectrum pricing is currently being finalised by the DoT and the Telecom Regulatory Authority of India (Trai).

“Hopefully that should be resolved soon,” he said.

Trai and the DoT have differences on several points related to spectrum allocation for satellite communication services. Earlier this month, Trai rejected several suggestions made by the DoT, including a proposal to levy a 5 per cent annual spectrum fee on satcom players instead of 4 per cent, and a suggestion to scrap a Rs 500 fee per connection in urban areas, among other points.

The DoT is expected to make a presentation before the Digital Communication Commission (DCC), the apex decision-making body in the telecom sector. The DCC will decide the future course of action on spectrum pricing, which may include seeking Cabinet approval.

On the relief sought by Vodafone Idea Ltd (VIL), Scindia said the DoT is still working on the matter.

“We are today applying our minds on that. It is work in progress within the Department of Telecommunications,” he said.

Earlier this year, VIL, in a letter to the DoT, said its liabilities to the government stood at around Rs 2 lakh crore, including Rs 1.19 lakh crore towards spectrum dues. The company said that without support, the Centre would face significant direct monetary loss, with no recovery of spectrum dues, equity value of Rs 53,083 crore becoming nil, and no recovery of adjusted gross revenue (AGR) dues.

The Supreme Court has given the government the option to resolve the issue within the ambit of its policy-making powers.

When asked about the sustainability of repeated relief to VIL, Scindia said no relief has been granted to the company so far.

“We have not given any relief as such. We have converted our dues into equity. Therefore, we hold a 49 per cent equity stake in Vodafone against dues of close to, if I recall correctly, Rs 37,000 crore. That is now the Government of India’s equity stake in that company,” he said.

In the absence of further relief, VIL is required to pay around Rs 18,000 crore by March 2026 and a similar amount every year for the next six years. The company’s annual liabilities are more than double its annual operational cash generation, which has been in the range of Rs 8,400-9,200 crore over the past three years.

VIL has said that the telecom market would slip into a duopoly and service prices would rise sharply if its operations come under threat.

Scindia said the Indian telecom market continues to remain robust with four operators and that the government would like to maintain that structure.

“If you look at countries across the world, very few can boast of four providers of telecom services. India today has four very robust telcos,” he said.

He added that Vodafone Idea and BSNL currently serve close to about 210 million and 100 million customers, respectively.

“Very few telcos in the world can boast of that. You have an economy with four players, very robust pricing, and high economies of scale in the market. We would like to see that continue,” Scindia said.