COAI flags Trai's satcom recommendations; claims assumptions incorrect, low charges unjustifiable

Time of India

2 days ago

Industry body
COAI
has approached the telecom department to raise concerns over
Trai
recommendations on the satcom spectrum, saying "incorrect assumptions" have led to unjustifiably low
spectrum charges
for
satellite services
relative to
terrestrial networks
.
In a letter dated May 29, COAI claimed that Trai's recommendations are based on incorrect assumptions and that their implementation will hit the sustainability of terrestrial services, which form the foundation of India's digital infrastructure.
COAI has urged the Department of Telecom (DoT) to form a committee to "undertake a comprehensive review of the recommendations in their entirety, ensuring the process is guided by principles of fairness, transparency, and equity and also give an opportunity to TSPs (telcos) to share their views regarding the same".
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Cellular Operators' Association of India (COAI) argued that the recommendations provide a regulatory advantage to commercial
NGSO satellites
against terrestrial broadband service providers and, if accepted by the DoT in their present form, will undermine competition and create a non-level playing field.
COAI said that Trai's recommendations do not appear to address the most fundamental and contentious issue - the lack of a level playing field between terrestrial service providers and satellite operators serving the same market.
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"The said recommendations are based on incorrect assumptions and implementation of these recommendations will impact the sustainability of terrestrial services that form the foundation of India's digital infrastructure," it said.
COAI, in its letter, claimed that Trai has underestimated the potential capacities of satellite networks while possibly overstating those of terrestrial networks. This, it said, "resulted in a flawed foundation for the entire exercise".
"Use of accurate capacity data from both terrestrial and satellite operators would have yielded a more transparent and reliable assessment of respective capacities of satellite and terrestrial networks," it said.
The "fundamental flaw" in the capacity assumptions exercise undermines the DoT's clear mandate to ensure competitive parity between satellite and terrestrial services.
"Incorrect assumptions have led to unjustifiably low spectrum charges for satellite services relative to terrestrial networks" said the letter addressed to DoT Secretary Neeraj Mittal.
COAI further said that the regulator was expected to recommend a pricing structure that ensures a level playing field between satellite-based and terrestrial operators after doing a complete techno-economic analysis, but "has instead, surprisingly, based its recommendations on the ad-hoc spectrum charges set on an administrative basis for non-competing VSAT services using Geo-Stationary (GSO) satellites.
The telecom regulator last month recommended that satellite communication companies like Starlink pay four per cent of their adjusted gross revenue (AGR) as spectrum charges to the government. Operators offering satellite-based broadband internet services in urban areas would have to shell out an additional Rs 500 per subscriber annually.
No additional levy would be applicable for services in rural areas.
COAI also argued that the recommendation of a spectrum charge at four per cent of AGR is without justification.
"It is well known and Trai would surely be fully aware that with the advent of next-generation non-geostationary satellite orbit (NGSO) broadband services -- including low Earth orbit (LEO) and medium Earth orbit (MEO) constellations -- satellite services are now capable of directly substituting and competing with terrestrial fixed and mobile broadband networks," COAI said.
Trai's current recommendations fall short of ensuring a level playing field, COAI claimed.
The proposed spectrum charges are even lower than the administrative fees currently levied on GSO-based VSAT services, which do not compete with terrestrial networks, it added.
"Spectrum Charges on a revenue share basis without any entry fee promote regulatory arbitrage and tilt the level playing field against terrestrial broadband service providers," it said.
COAI argued that the additional proposal to subsidise user terminals or satellite operators through the Digital Bharat Nidhi (DBN) fund further tilts the level playing field against the terrestrial operator, especially given that a majority of the DBN levy is contributed by competing terrestrial operators.
The association said that the recommendations are non-transparent based on non-justifiable assumptions rather than factual data.
"The limited consideration of stakeholder inputs coupled with the absence of comprehensive consultation on key issues, such as ensuring a level playing field, evaluating network capacity, determining assignment methods, and establishing fair spectrum valuation, along with reliance on flawed assumptions, has culminated in recommendations that are not only inequitable but may also contravene the principles embodied in the Telecommunications Act, 2023," as per COAI. PTI