In response to the ongoing dispute regarding the allocation of spectrum for satellite communication services, the Department of Telecommunications (DoT) has expressed its support for conducting an auction as the preferred method. This aligns with the views of telecom companies Reliance Jio and Vodafone Idea, who oppose the demand of satellite service providers to allocate airwaves without bidding.

According to officials from the DoT, satcom airwaves should be awarded to the highest bidder due to the presence of multiple companies seeking entry into the market. They argue that the bandwidth will be utilized for commercial purposes.

The officials further state that satellite broadband spectrum will serve the purpose of connecting customers, similar to mobile networks, which makes the auction a more suitable approach for allocating such airwaves.

The DoT has requested the Telecom Regulatory Authority of India (Trai) to provide recommendations on the auction of satellite spectrum, based on its rationale. However, Trai, in its consultation paper, has sought opinions on alternative allocation methods, including administrative allocation, in addition to the auction, Economic Times reported.

Legal opinions have been presented by former attorney general KK Venugopal in July 2020, supporting the preference for auctions in spectrum allocation. Venugopal stated that when there are competitors willing to bid for the limited available spectrum, the underlying principle should be “competitive bidding” to enable the government to generate revenue.

The DoT officials refer to the legal opinion of July 2020 and highlight that the principle of competitive bidding should be applied to spectrum allocation as it is a natural resource. They also mention that in exceptional cases where some spectrum needs to be allocated administratively for the public good, an application with comprehensive reasoning should be submitted to the Supreme Court.

“The DoT decided to conduct an auction for satellite spectrum after considering all aspects. We are awaiting Trai’s recommendations on this matter,” stated another official.

Satcom is an emerging market in India with significant opportunities. According to an EY-ISPA report, India’s space economy is projected to reach $13 billion by 2025, with a CAGR of 6 percent.
The DoT has already granted a global mobile personal communication by satellite services (GMPCS) license to Bharti-backed Oneweb and Reliance Jio’s satellite arm. Elon Musk’s Starlink is also expected to receive a license in the coming months.

Apart from these companies, Amazon’s Project Kuiper has shown interest in entering the world’s second-largest telecom market by offering fast broadband services via satellites. Numerous other Indian and global companies are eyeing this market as well.

Trai conducted an open-house discussion on the allocation mechanism for satellite spectrum on July 14, which lasted over 10 hours and featured approximately 30 speakers from around the world expressing their views.

An industry executive pointed out that competition for satellite spectrum is more intense than for terrestrial spectrum since there are only three private telecom players in the country, whereas the number is significantly higher for satcom.

Jio and Vodafone Idea (Vi) have advocated for an auction model, citing the Supreme Court’s 2012 judgment that supported bidding as the appropriate method for allocating scarce natural resources.

Regarding the 2G case and the top court ruling of 2012, legal expert Rohatgi clarified that the considerations back then were solely focused on the grant of licenses for mobile/cellular networks, which differs from satellite spectrum allocation. He emphasized that auctions should not be considered a legal or constitutional mandate due to the potential for abuse in other resource allocation methods being equal to that in auctions.