The spectrum challenge: Starlink may have a new Indian hurdle as TRAI eyes 5-year spectrum allocation

Amid Elon Musk-led Starlink's debut efforts in India, the Telecom Regulatory Authority of India (TRAI) is likely to make significant recommendations concerning the allocation of satellite broadband spectrum, which could reshape India's telecom landscape. 

The proposed framework involves a five-year period for spectrum allocation, countering Starlink, which has been advocating for a 20-year licence. The TRAI recommendation reveals its inclination towards a shorter licensing period in alignment with the interests of Indian telecom giants like Reliance Jio and Bharti Airtel, both of whom support a three to five-year duration. This shorter period is aimed at understanding "how the market stabilises" before making long-term commitments. 

On the other hand, Starlink, focusing on "affordable pricing and longer-term business plans," has expressed a preference for a prolonged spectrum allocation. 

Recently, Mukesh Ambani's Reliance and Sunil Mittal's Bharti Airtel have entered into partnerships with Starlink, transforming from competitors to allies. These partnerships, however, are contingent upon Starlink obtaining the necessary regulatory approvals. The development underscores the evolving dynamics of India's telecom sector as it integrates satellite internet services. 

TRAI's decision to focus on a licence duration "of around five years and then see how the sector grows" is part of a broader strategy to allow for spectrum price adjustments as the market matures. This approach is intended to maintain a regulatory framework that is adaptable and responsive to market changes. 

The pricing for satellite spectrum is anticipated to be "substantially lower" than traditional telecom licences, which are usually auctioned for 20 years. The pricing model aims to make satellite internet services more accessible, promoting competition and innovation in the sector. KPMG projects that India's satellite communication sector will expand over tenfold, reaching $25 billion by 2028, highlighting the promising future of the industry. 

TRAI is expected to finalise its recommendations on the licence duration and spectrum pricing within a month, subsequently submitting them to India's telecom ministry. This timeline is crucial, as it will set the strategic direction for satellite internet services in India and influence the competitive landscape.