Satellite communication companies need to pay 4% fee on revenue: Trai

NEW DELHI: Telecom regulator Trai on Friday recommended a charge of 4% of adjusted gross revenue (AGR) for satellite communications operators, such as Elon Musk's Starlink, Bharti Enterprises-backed OneWeb and Jio-SES, and said the companies should be assigned spectrum for a period of five years, that can be extended by another two years.

The regulator also proposed charges on satcom companies when acquiring customers in urban areas, while recommending subsidy for installation in dark zones, within rural and remote areas to encourage faster network enhancement.

The long-awaited recommendations clear one more hurdle for Starlink and other satcom providers after revised guidelines issued by the department of telecom (DoT) recently, and issuance of Letter of Intent to Musk's company earlier this week.

The AGR comes after govt decided to provide spectrum for satcom providers on an administrative basis, against auctions that are mandated for terrestrial service providers, such as Reliance Jio, Bharti Airtel & Vodafone Idea.

Trai did not fix any specific price for the airwaves as was being demanded by Jio and Airtel. The domestic terrestrial providers were pushing the govt for "comparable" spectrum pricing for satcom providers to ensure "fair competition" in the telecom sector and to drive in a "level-playing field".

Trai chairman Anil Kumar Lahoti said the regulator did not find any case of satellite services eating into the broader business model of the terrestrial providers. "After detailed examination, we have found that satellite services will be complementary and not competing," Lahoti said on the recommendations, which will now be examined by DoT. If found satisfactory, they will be taken to the cabinet and when approved, allow companies to get satcom licenses to start services.

To ensure that companies don't squat on the spectrum and delay launch, Trai also fixed a 'minimum charge' of Rs 3,500 per MHz for the companies.

Lahoti said an additional annual charge of Rs 500 per subscriber has been fixed if satcom companies acquire customers in urban areas, where network coverage is already robust. This is to ensure that they concentrate more on providing rural connectivity.

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