India’s Department of Telecommunications (DoT) appears set to impose a 5 per cent adjusted gross revenue (AGR)-based spectrum usage charge (SUC) on satellite communications (satcom) operators, overriding the Telecom Regulatory Authority of India’s (TRAI) recommended 4 per cent. In doing so, it risks turning a 1 percentage point dispute into a delay for a sector that could connect an estimated 400 million unserved citizens. The disagreement (unresolved as of March 2026) has stalled commercial satellite broadband launches despite multiple operators holding full licences, with Starlink having received its approvals in mid-2025. At projected market scale, the gap between 4 per cent and 5 per cent translates to roughly $148 million annually, a material burden on a nascent industry already facing what analysts describe as the world’s highest satcom regulatory levy. India’s 12-13 per cent total regulatory take stands as a significant global outlier, one that could ultimately undermine its own rural connectivity ambitions.
A market with three licensed operators, but zero commercial launches
India’s satcom market, valued at $4.3 billion in 2024, is expected to nearly triple to $14.8 billion by 2033, according to the Ministry of Communications. The addressable opportunity is substantial. Roughly 400 million Indians remain unconnected, concentrated in remote terrains. Satellite broadband is increasingly positioned as the last resort connectivity solution for bridging the digital divide.
At present, India’s satcom market remains crowded with licensed players, yet none have launched commercial services. Starlink received its global mobile personal communication by satellite (GMPCS) licence in June 2025 and the Indian National Space Promotion and Authorisation Centre (IN-SPACe) authorisation in July 2025, signed distribution arrangements with both Jio and Airtel, and received trial spectrum in September 2025. Eutelsat OneWeb, backed by Bharti Enterprises, was the first mover, securing a GMPCS licence in August 2021 and operating a fully functional 640-satellite low earth orbit constellation. Jio Satellite Communications, through Orbit Connect, a joint venture between Jio Platforms and SES, has had its gateway station in Kadapa, Andhra Pradesh, built and running proof-of-concept demonstrations for over two years. Amazon Kuiper is still awaiting regulatory approvals and is targeting its India entry in 2026.
This shows that the infrastructure is in place, the licences are signed and the demand is real. What is missing is a final, settled number on what operators must pay to use India’s airwaves.
TRAI’s original stance
On May 9, 2025, TRAI released its formal recommendations on satcom spectrum pricing after a consultation process that began with a DoT reference in July 2024. TRAI’s framework rested on five core elements. First, SUC was set at 4 per cent of AGR, with a minimum annual charge of Rs 3,500 per megahertz. Second, an additional Rs 500 per subscriber per year would be levied only on non-geostationary orbit (NGSO) operators serving urban areas, a mechanism designed to incentivise rural expansion by making urban operations marginally costlier. Third, spectrum would be allocated administratively on a shared, non-exclusive basis across the C, Ku, Ka, Q/V, L and S bands, with no auction. Fourth, spectrum tenure was set at five years, extendable by two years. And finally, TRAI recommended that the government subsidise NGSO user terminals, which cost between $200 and $450 internationally, through direct benefit transfer via the Digital Bharat Nidhi (DBN) fund for rural and remote users.
The disagreement
DoT rejected key elements of this framework. The Digital Communications Commission (DCC) met on September 16, 2025 and sent a back-reference to TRAI, proposing instead a flat 5 per cent AGR charge with a 1 per cent concession, effectively 4 per cent, only for operators demonstrating coverage in remote and hard-to-connect areas such as borders, hills and islands. DoT also rejected the Rs 500 urban subscriber levy, citing implementation difficulties in classifying users by location. It declined the terminal subsidy recommendation as well, stating that the DBN fund lacked mechanisms for direct disbursal.
On December 8, 2025, TRAI formally pushed back, stating that it did not concur with DoT’s proposal to charge spectrum at the rate of 5 per cent of AGR, with conditional discounts for providing connectivity to hard-to-connect areas. TRAI reaffirmed every element of its original recommendations. A second DCC meeting on January 27, 2026 sent yet another back-reference to TRAI. As of March 2026, reports indicate that DoT has reviewed TRAI’s clarifications and decided to proceed with its 5 per cent AGR position, with the proposal expected to go before the DCC within the coming weeks, before requiring the union cabinet’s approval.
What the 1 percentage point gap actually costs
The difference between 4 per cent and 5 per cent of AGR may appear marginal, but it compounds significantly against India’s broader regulatory structure. Satcom operators must already pay an 8 per cent licence fee on AGR, in addition to SUC, making the total regulatory burden either 12 per cent of AGR under TRAI’s recommendation or 13 per cent under DoT’s proposal. This is before accounting for additional compliance costs, including data localisation obligations, lawful interception infrastructure, NavIC integration by 2029 and a 20 per cent indigenous ground-segment manufacturing requirement within five years.
At the current market scale of approximately $1 billion in the annual satcom revenue, the 1 per cent difference amounts to roughly $10 million industry-wide. As the market scales towards the projected $14.8 billion by 2033, that gap widens to approximately $148 million per year, capital, which nascent operators argue, would be better deployed building rural infrastructure.
The commercial implications extend beyond headline numbers. Satellite broadband is already 7-18 times more expensive than standard home broadband in India, according to estimates by JM Financial. Starlink’s expected consumer pricing of Rs 850-Rs 3,400 per month compares unfavourably with Jio and Airtel fibre-to-the-home plans starting at Rs 400 to Rs 600 per month. The hardware barrier is equally daunting, with Starlink kits priced at Rs 21,000-Rs 43,000. DoT’s rejection of TRAI’s terminal subsidy recommendation means end-users in remote areas bear the full cost, at precisely the point where affordability matters most.
TRAI explicitly warned that potential users in rural areas would be left behind in accessing satellite connectivity if DoT’s position were adopted. Its Rs 500 urban subscriber levy was specifically designed to cross-subsidise rural deployment. DoT discarded this mechanism in favour of a simpler mechanism – a 1 per cent concession contingent on operators covering 5 per cent of hard-to-connect regions. Critics argue this threshold is too vague and the incentive too weak to drive meaningful rural expansion.
Global comparison: India as an outlier
No other major market imposes a revenue-share model on satellite spectrum at comparable rates. In the US, the Federal Communications Commission (FCC) charges flat annual regulatory fees per satellite system, rather than a percentage of revenue. Under the FCC’s FY 2025 regulatory fees order, NGSO constellations, defined as those with 1,000 or more authorised satellites, owe a fee of $1,917,390 per authorised system. Against Starlink’s estimated global revenue exceeding $7 billion, this amounts to less than 0.03 per cent of the revenue, still roughly 40-50 times cheaper as a revenue share than India’s proposed regime even after the FCC’s upward revision.
The UK’s Ofcom uses administered incentive pricing based on spectrum opportunity cost for GSO gateway stations and is currently consulting on extending this approach to NGSO gateways. There is no AGR-equivalent revenue share. Brazil experimented with satellite spectrum auctions but abandoned them in 2019, reverting to administrative assignment with no comparable revenue-share mechanism. Across Southeast Asia, satellite spectrum is allocated administratively with minimal cost-based fees. Malaysia facilitated Starlink’s commercial launch with consumer plans priced at approximately $48 per month. The Philippines hosts multiple active satcom operators under a comparably permissive regulatory framework.
The international comparison outlines a stark difference: India is currently aiming to price satellite spectrum as a revenue-generating asset, at a time when the rest of the world is treating it as a shared resource, whose administrative costs should be recovered, not taxed.
Outlook
The spectrum pricing framework must clear two more procedural gates – DCC approval and union cabinet ratification. The union minister of communications stated in December 2025 that the matter would be hopefully resolved soon. However, the Indian Space Association’s director was more direct in his year-end assessment, noting that the space industry awaits the government’s final spectrum decision and that any further delay represents a significant opportunity cost.
The implications cascade through India’s broader connectivity agenda. BharatNet Phase III has committed Rs 1.39 trillion to connect 250 million rural residents. Moreover, satellite backhaul is critical for terrains where fibre deployment is physically and economically infeasible. Satcom also features in India’s Bharat 6G Vision through non-terrestrial networks. India’s space economy, currently estimated at $9 billion, is projected to reach $44 billion by 2033, with satcom as the commercial cornerstone.
India’s satcom spectrum pricing dispute reveals a regulatory system struggling to adapt its terrestrial-era frameworks to a fundamentally different technology. It reflects an unresolved tension between treating satellite spectrum as a revenue source and treating it as an enabler of public-good connectivity. The ultimate cost is not measured in percentage points of AGR, but in the continued digital exclusion of hundreds of millions of Indians in remote regions where they have no terrestrial alternative. Whether India designs its satcom regime for scale, affordability and rural reach, or continues to hold out for maximum revenue extraction, will determine whether satellite broadband becomes the connectivity breakthrough that the country needs, or yet another policy ambition that arrives years too late.
Shashwat Singh
