The Department of Telecommunications (DoT) is planning to raise the spectrum usage fee for satellite internet providers to 5% of their adjusted gross revenue (AGR), up from the 4% earlier recommended by the Telecom Regulatory Authority of India (Trai), according to a report by The Economic Times.
If approved by the Cabinet, the proposal will impact both global players such as Elon Musk’s Starlink and Amazon’s Kuiper, as well as domestic ventures like Eutelsat OneWeb and Jio Satellite.
Officials told ET that the DoT will send its revised proposal back to Trai for review before submitting it to the Cabinet. Trai’s earlier recommendations included a 4% AGR fee and an additional ₹500 per urban customer per year to encourage rural expansion. However, the DoT rejected the additional fee, citing challenges in tracking and verifying rural–urban distinctions.
“Implementing, verifying, and auditing a fixed ₹500 rural charge would be impractical,” an official was quoted as saying. “A uniform 5% AGR levy for all satellite communication services would be a simpler, more effective solution.”
Rising Revenue Potential Behind the Move
The DoT believes the revenue potential of the satellite internet market will rise sharply as services expand from enterprise clients to retail consumers. Currently, only geostationary orbit (GSO) operators like Hughes and Nelco operate in India, paying 3–4% of AGR in spectrum charges.
New non-GSO operators — including Starlink, Amazon Kuiper, OneWeb, and Jio Satellite — are gearing up to offer direct-to-consumer broadband-from-space services, which the DoT expects will significantly boost market revenues.
India’s space economy is projected to reach $44 billion by 2033, accounting for nearly 8% of the global market, according to IN-SPACe. The current satellite communication (satcom) opportunity is estimated at around $1 billion annually.
Spectrum Allocation and Licensing
Several operators — including Starlink, Eutelsat OneWeb, and Jio Satellite — have already received permits to launch services in India. However, spectrum allocation will proceed only after the final pricing structure is approved. Amazon Kuiper is still awaiting regulatory clearances.
Both GSO and non-GSO operators will receive spectrum administratively, under the provisions of the new Telecommunications Act.
No Subsidy via Digital Bharat Nidhi
Trai had proposed using the Digital Bharat Nidhi (DBN) — formerly known as the Universal Service Obligation (USO) Fund — to subsidise satellite terminals priced between ₹20,000 and ₹50,000 to promote adoption.
The DoT, however, rejected this recommendation, saying the DBN lacks a mechanism to disburse subsidies directly to users. Officials added that the department is aligned with most of Trai’s recommendations, except for issues related to spectrum pricing and the DBN subsidy, which are being sent back for further consideration.
Final Steps Toward Policy Approval
Once Trai submits its feedback, the DoT will finalise pricing and allocation rules for satellite operators. The department is reportedly close to completing the administrative framework that will govern spectrum allocation for the emerging satellite broadband sector — providing long-awaited clarity to both domestic and global players.