India’s satellite operators’ body has repudiated claims by telcos of satcom’s potential to scale, stating that low-fibre penetration in the country cannot reduce the overall cost of satcom deployment.
Satcom representative body, Broadband India Forum (BIF), has taken issue with the Cellular Operators Association of India’s (COAI) claims in a letter to the government that satellite operators have a huge scaling opportunity in India, as 85 per cent of the country’s homes remain fibre-less. BIF argued that there is no link between low-fibre penetration and satellite scalability or affordability, as low fibre cannot make satellite terminals cheaper or impact satellite operators’ actual capacity.
“The association has argued that because 85 per cent of Indian homes lack fibre, it presents a large market opportunity for satellite operators to scale and so equipment costs will be driven down and satellite providers are aggressively reducing terminal prices. This is a classic non sequitur [fallacy],” said TV Ramachandran, President of the BIF.
COAI, in its letter, had said that satcom players are already aggressively reducing terminal prices to attract users. It gave the example of the US and other markets, where providers like Starlink offer zero-cost equipment under 12-month commitment plans.
However, the BIF rebutted that terminal pricing is driven by global manufacturing scale, not Indian fiber penetration.
“As of today, no satellite operator has publicly committed to reducing terminal prices below commercial market rates in the Indian context,” said Ramachandran, stating that low fiber penetration cannot alter the underlying economics of satcom deployment.
Economic scale, vastly different
BIF stated that terrestrial telcos in India generate over ₹3.36 lakh crore annually, while the combined satellite communication market barely touches ₹540 crore to ₹600 crore, or 0.2 per cent of telco revenue. In case of device costs and installed base as well, cost of devices for satcom hit ₹25,000, whereas terrestrial devices stood at ₹5,000 – a 1:5 ratio. Further, the number of satellite terminals manufactured in 2024 by the largest satellite service provider was around 3 million globally. In India alone, almost 150 million mobile devices are sold annually.
“These numbers expose the fallacy of any claim of substitutability or competitive parity,” said the BIF, adding that the disparity should also dismiss telcos’ claims that satcom will substitute terrestrial services.
COAI earlier had said that the cost of device has historically not been a consideration in spectrum pricing decisions, resulting in a “perceived disparity” between satcom and terrestrial services. It gave the example of Kenya to support its claim that NGSO operators have leveraged regulatory advantages to gain market dominance.
However, the BIF countered that satellite communication service providers and terrestrial communication providers cannot be considered equal. It broke down per-user satcom spectrum charges to show how ₹635 higher for satcom services (₹900) than the charge levied on cellular or terrestrial broadband services in urban areas (₹265).
“Even if a satcom operator were to earn zero revenue in urban areas, it would still pay a minimum SUC of ₹500 per customer per annum, which is approximately 1.85 times the per-customer spectrum burden of terrestrial service providers,” said the BIF, adding that putting both categories at par is violative of Article14 as held in Onkar Lal Bajaj case.
The organisation said that terrestrial and satcom services should be treated as complementary technologies, where satellite services are uniquely suited for areas where fibre or terrestrial mobile networks are unviable, or have been bypassed by existing operators.
In an earlier letter commenting on a TRAI consultation paper, the ITU-APT Foundation of India (IAFI) said the government should price the satellite spectrum in a manner that addresses the concerns related to fair competition and level playing field for offering of services directly to retail customers, ensuring against predatory pricing.
“It is, however, worth noting that despite good terrestrial coverage in Metro and cities, the use of satellite services in these urban scenarios will complement the terrestrial coverage in unconnected homes,” said the IAFI.