Government to Allot Satellite Internet Spectrum Without Auction in Win for Elon Musk’s Starlink

India has proposed a licensing approach to assigning spectrum for satellite internet services and exempt companies from having to bid for it, a win for Elon Musk's venture Starlink which has lobbied hard against any auctions.

The proposal was included in a new draft bill for the telecommunications sector, which seeks to replace the 138-year-old Indian Telegraph Act that currently governs the sector. The bill was tabled for approval in parliament on Monday.

While Starlink and its global peers like Amazon's Project Kuiper, and the British government-backed OneWeb would rejoice in the move, it is a setback to Mukesh Ambani, Asia's wealthiest, who runs Indian telecom giant Reliance Jio.

The foreign firms have been demanding a licensing approach, concerned that an auction by India unlike elsewhere will raise the likelihood of other nations following suit, increasing costs and investments, Reuters had reported in June.

Reliance Jio, country's biggest telecom operator, however had disagreed and told government that an auction is the right approach, similar to 5G spectrum distribution in India. Foreign satellite service providers could offer voice and data services and compete with traditional telecom players, and so there must be an auction to achieve a level playing field, Reliance had argued.

"By bypassing traditional auctions, this pragmatic method is poised to expedite the deployment of satellite services more efficiently," said Anil Prakash, Director General at SIA-India, a satellite industry body.

India's satellite broadband service market is expected to grow 36 percent a year to reach $1.9 billion (roughly Rs. 15,807 crore) by 2030, according to Deloitte.

Monday's draft telecom bill also empowers India's government to suspend or prohibit use of telecom equipment from specific countries on the grounds of national security.

© Thomson Reuters 2023