India clears 5% revenue-share levy on satellite internet spectrum

Telecom regulator's apex decision-making body approves administrative spectrum allocation for five years, with a discount for operators covering remote regions, as Starlink, Eutelsat OneWeb and Jio Satellite prepare to expand commercial broadband services across the country.

India's top telecom decision-making panel has given the green light to a spectrum usage fee of 5% of adjusted gross revenue (AGR) for companies offering satellite-based internet services, according to people with knowledge of the matter. The ruling paves the way for firms such as Starlink, Eutelsat OneWeb and Reliance Jio's satellite arm to move ahead with commercial rollout plans in the country.

Discount for remote regions

The Digital Communications Commission, which functions under the Department of Telecommunications, reached the decision during a meeting held last week, sources said. As part of the framework, satellite operators offering coverage in officially designated underserved zones — including border areas, mountainous terrain and island territories — will receive a one-percentage-point discount on the standard levy. A government official noted that these zones will be identified based on where satellite connectivity holds a clear edge over conventional mobile networks. Any commercial rollout will still need to pass through separate security vetting and other regulatory sign-offs before services can begin.

Five-year administrative allocation

Rather than auctioning the airwaves, authorities have opted to hand out spectrum administratively for an initial five-year term, with a built-in provision to extend the allocation by up to two more years, according to those familiar with the matter. While this marks a significant regulatory milestone for satellite broadband players eyeing the Indian market, the telecom department must still steer the proposal through its remaining internal approval stages before it becomes final policy.

The commission's ruling comes after it examined suggestions put forward by the Telecom Regulatory Authority of India regarding the framework for allotting spectrum used in commercial satellite communication. The regulator had proposed a lower charge of 4% of AGR, coupled with a floor of ₹3,500 per MHz annually.

However, officials chose not to adopt another element of Trai's proposal — a ₹500 per-subscriber fee intended for urban service areas. The reasoning, per officials, was that such a penalty-based structure would be difficult to enforce in practice, since drawing a clear line between rural and urban users poses significant challenges.

A second official explained that the underlying approach is to reward coverage in geographies where low-Earth and medium-Earth orbit satellite systems offer a genuine technological advantage over ground-based networks — specifically border zones, hilly terrain and islands — rather than applying a blanket incentive structure nationwide.

Industry watchers say the administrative route, rather than a competitive auction, is likely to be welcomed by satellite operators, as it removes upfront bidding costs and offers greater predictability for long-term network investment in the sector. The move is expected to accelerate the entry of global satellite broadband players into India's telecom market, which has so far been dominated by terrestrial mobile and fibre-based operators.