In a strong reaction to what the telcos have come to claim regarding the TRAI’s latest recommendation on the pricing of the spectrum, the Satcom companies have expressed their disagreement with the claims that the recommendation doesn’t take into account the issue of competitive parity. On the other hand, the Satcom companies claim that the TRAI’s distinction between the urban and rural subscribers is enough of a level playing field and aims to ensure the same between Satcom and terrestrial broadband players.

The Satcom companies contend that the upward revision in Satcom spectrum pricing is intended to foster competitive parity with terrestrial broadband operators. Furthermore, there is little chance that the TRAI’s recommendations were submitted without the government's concurrence, witnessing the center’s strong backing of the administrative allocation of spectrum. 

Tactics at Play

As per the report by ET, some senior satcom industry executives have described the telcos’ latest criticism of TRAI’s recommendations as “an underhanded tactic” aimed at pressuring satellite players into paying a hefty, auction-linked upfront fee for spectrum. In contrast, TRAI hasn’t suggested any upfront fee or allocation price for satellite spectrum. 

To read about the latest telecom subscribers' figure released by TRAI, click here!  

Telco’s Contention 

Telecom operators, through a recent joint letter via the Cellular Operators Association of India (COAI) to key government authorities, criticized TRAI’s satcom spectrum pricing recommendations as unjustifiably low. They warned that implementing the proposal in its current form could distort the level playing field and threaten the viability of terrestrial telecom services.

What do TRAI’s recommendations vouch for?

TRAI’s revised proposal to levy a 4% AGR-based spectrum usage fee for satcom services—up from 1% for VSAT—along with an annual ₹500 charge per urban subscriber, is considered a step toward leveling the playing field between satellite and terrestrial broadband operators rather than disturbing the competitive parity as claimed by telcos. In contrast, no such per-user fee has been suggested for rural areas. 

To read about BSNL's latest financial figures and how it managed to remain profitable for the second straight quarter, click here!

Bridging the Digital Divide 

As per TRAI’s latest internet coverage data, there's a sharp variance between total urban internet users (per 100 population) at 111.64 versus the total rural internet users at 44.99. This presents the synopsis of the complete picture of India’s digital divide existing across the nation and the telcos’ ineffectiveness in addressing this issue. 

Keeping all the scenarios in mind, especially the digital divide existing in India today, as well as the interests of the stakeholders, it is imperative for the authorities to come up with all-encompassing recommendations to suit the nation’s digital ambitions.