TRAI Rejects DoT's 5% Spectrum Fee Proposal; Sticks to 4% for Satellite Services to Boost Rural Connectivity
SDG 9: Industry, Innovation, and Infrastructure | SDG 10: Reduced Inequalities
Telecom Regulatory Authority of India (TRAI) | Department of Telecommunications (DoT)
In a significant regulatory pushback, TRAI has rejected the Department of Telecommunications’ (DoT) proposal to raise the spectrum usage charge for satellite services to 5% of Adjusted Gross Revenue (AGR). Instead, TRAI has reiterated its original recommendation of a 4% AGR charge for both GSO (Geostationary Orbit) and NGSO (Non-Geostationary Orbit) satellite services, arguing that a higher rate would stifle the nascent industry.
Key Conflicts & Resolutions:
Spectrum Pricing: DoT proposed a 5% charge with “conditional discounts” for covering hard-to-reach areas (hills, borders). TRAI rejected this, calling it complex and insufficient. It stands by its 4% AGR base rate plus a specific “Urban Subscriber Charge” (see below) to cross-subsidize rural connectivity.
Level Playing Field: DoT sought to retain a preferential 1% spectrum charge for BSNL’s satellite service (GSPS), citing “strategic use.” TRAI rejected this, stating that in a liberalized market with private players (like Starlink, OneWeb), BSNL cannot have a discriminatory advantage. All operators must pay the same 4% rate.
Rural Subsidies: TRAI strongly reiterated the need for the government to subsidize user terminals (the hardware) for rural customers, potentially using the Digital Bharat Nidhi or third-party implementers, to make satellite internet affordable.
What is the “Urban Subscriber Charge”? To prevent satellite operators from only serving profitable city clients, TRAI has proposed a unique Urban Subscriber Charge of ₹500 per annum for every NGSO satellite subscriber located in an urban area. Rural and remote subscribers are exempt from this charge. This policy tool is designed to make urban markets slightly more expensive for operators, thereby financially incentivizing them to expand their networks into rural India to avoid the levy.
Policy Relevance
This document establishes TRAI’s stance on “Same Service, Same Rules.” By denying BSNL special treatment, TRAI is signaling to global investors (Elon Musk’s Starlink, Amazon’s Kuiper) that India’s satellite market will be competitive and fair. Furthermore, by insisting on the Rural Exemption vs. Urban Surcharge model, TRAI is actively engineering a financial structure that forces the private sector to bridge the digital divide, rather than waiting for government infrastructure to reach remote villages.
Follow the full news here: Recommendations on Terms and Conditions for the Assignment of Spectrum for Certain Satellite-Based Commercial Communication Services