What is satellite spectrum, why most countries prefer not to hold auctions

Last Updated23/10/2024

Union Communications Minister Jyotiraditya Scindia clarified last week that spectrum for satellite communication (satcom) would be allocated “administratively”, rather than through an auction of airwaves.

Union Communications Minister Jyotiraditya Scindia's recent announcement regarding the allocation of satellite communication (satcom) spectrum has sparked discussions on the implications of administrative allocation versus auction. Here’s a breakdown of the key points and context surrounding this decision:

Administrative Allocation: The decision to allocate satcom spectrum administratively rather than through an auction process is outlined in The Telecommunications Act, 2023. Specifically, spectrum for satellite communication is listed in the First Schedule of the Act, which permits allocation without an auction.
International Coordination: Unlike terrestrial spectrum, satellite spectrum has no national territorial limits and is managed by the International Telecommunication Union (ITU), making it impractical for countries to auction it. This characteristic necessitates coordination at an international level.

Wider Coverage: Satcom services can provide connectivity to remote areas where terrestrial networks (like cable and DSL) may not reach, benefiting underserved regions.
Resilience: Satellite networks are less susceptible to physical damage from extreme weather events due to fewer ground components. This resilience can be crucial for maintaining communication during natural disasters.

Growth Projections: The satcom sector in India, currently valued at $2.3 billion, is projected to expand to $20 billion by 2028, according to KPMG. This growth is supported by a substantial untapped market, as approximately 290.4 million households in India lack broadband access.
Investment Landscape: India ranks fourth globally in terms of investments in the satcom sector, indicating significant opportunities for satellite operators to capitalize on the demand for connectivity.

Terrestrial Networks: In terrestrial mobile services, spectrum is exclusive, managed by a single operator in a specific geographical area. This exclusivity necessitates auctioning to determine usage rights.
Satellite Networks: Conversely, satellite spectrum is non-exclusive and can be utilized by multiple operators simultaneously, making administrative allocation a more suitable approach.

Past Auctions: Some countries, including the United States and Brazil, have experimented with auctions for satellite spectrum but reverted to administrative assignment due to infeasibility.
Recent Examples: Saudi Arabia conducted an auction for the S-band spectrum, which has exclusive applications for mobile satellite services, demonstrating that exclusive spectrum can be auctioned, but this is not the case for most satellite frequencies.

Competitors' Views: Companies like Elon Musk's Starlink view the administrative allocation as beneficial, supporting a more level playing field in the satellite market compared to an auction scenario proposed by competitors like Reliance Jio.
Concerns from Jio: Jio has expressed concerns that administrative allocation may not provide a fair competition framework between satellite and terrestrial services.