Satellite Spectrum Pricing Clash: India’s Telecom Giants Push Back Against Starlink’s Low-Cost Advantage

India’s telecom landscape is heating up as Reliance Jio and Bharti Airtel, the country’s dominant telecom operators, raise serious concerns about the proposed pricing model for satellite spectrum. With Elon Musk’s Starlink poised to enter the Indian market, these giants argue that the government’s suggested spectrum fees heavily favor satellite internet providers, potentially jeopardizing the investments and business models of traditional telecom players. This brewing conflict sheds light on a broader challenge—how to fairly regulate spectrum use in an era where terrestrial and satellite broadband services increasingly compete for the same customers.

In May, the Telecom Regulatory Authority of India (TRAI) recommended that satellite service providers pay just 4% of their annual revenue as spectrum fees. This contrasts sharply with the hefty upfront costs terrestrial operators like Reliance Jio and Bharti Airtel have incurred—through auctions where they pay roughly 21% more per MHz of spectrum. The Cellular Operators Association of India (COAI), representing these telecom firms, insists this pricing gap creates an uneven playing field. They argue that if satellite and terrestrial providers are offering similar broadband services targeting the same users, their spectrum pricing should reflect comparable terms.

The COAI’s concerns are grounded in reality: Reliance and Airtel have collectively invested nearly \$20 billion to acquire 5G spectrum licenses, and they fear that satellite operators with lighter fees could undercut them on pricing, disrupting the market dynamics. Satellite internet services, as COAI admits, do offer competitive and affordable alternatives, but such benefits shouldn’t come at the cost of distorting fair competition.

Meanwhile, Starlink is rapidly advancing toward launching in India. Telecom Minister Jyotiraditya Scindia recently confirmed that Starlink has received a Letter of Intent (LoI) from the Department of Telecommunications (DoT) and is awaiting final clearance from the Indian National Space Promotion and Authorisation Centre (IN-SPACe). Once approved, Starlink will begin trial runs using limited spectrum, joining other satellite internet contenders like OneWeb and Reliance’s own satellite ventures.

The government remains caught in the middle, reviewing TRAI’s recommendations carefully amid lobbying from both traditional telecom and emerging satellite players. As India prepares to embrace satellite-based internet, this pricing debate underscores the complexity of integrating innovative technologies without compromising a fair, competitive telecom ecosystem.

What Undercode Say:

This pricing controversy is more than just a spat over fees—it’s a microcosm of the telecom sector’s transformation driven by technological convergence. Satellite internet is no longer a niche luxury; it’s becoming a formidable alternative to terrestrial broadband, especially in underserved and rural regions where laying fiber or towers is cost-prohibitive. Starlink’s model—leveraging low earth orbit (LEO) satellites to deliver high-speed broadband globally—could radically disrupt how India’s digital infrastructure evolves.

However, the pricing disparity between terrestrial and satellite spectrum allocation reveals a deeper regulatory challenge. Traditional operators have sunk massive capital into spectrum auctions, infrastructure, and 5G rollouts. Penalizing them with a pricing regime that heavily favors satellite newcomers risks discouraging future investment in network expansion and innovation. On the flip side, satellite internet providers argue that spectrum is a natural resource that should not be auctioned or priced heavily, but rather administered to maximize accessibility and innovation.

Balancing these competing interests requires a nuanced approach. One potential path could be a harmonized pricing framework where satellite providers pay spectrum fees that reflect both their lower infrastructure costs and the competitive threat they pose. Alternatively, a tiered pricing model based on usage intensity or geographic coverage could level the playing field while incentivizing satellite services to complement rather than cannibalize terrestrial networks.

Moreover, the government must factor in the socio-economic impact of accelerating satellite broadband adoption. India’s digital divide remains significant, and satellite internet can bridge gaps in remote regions where traditional telecoms struggle. Encouraging satellite entry with favorable terms might spur broader connectivity, digital literacy, and economic growth. But fairness to existing operators can’t be ignored, lest it undermines the substantial investments that have positioned India as a 5G powerhouse.

Ultimately, India’s spectrum policy must evolve beyond traditional auction-centric models, incorporating technology-neutral regulations that foster innovation, fair competition, and inclusion. With Starlink’s entry imminent and terrestrial operators standing firm, the telecom ministry faces a defining moment to craft policy that embraces the future without leaving legacy players stranded.

Fact Checker Results ✅

TRAI’s recommendation for satellite spectrum fees at 4% of annual revenue is accurate.
Reliance Jio and Bharti Airtel’s investment figures in 5G spectrum (\~\$20 billion) align with recent auction data.
Starlink’s receipt of the Letter of Intent (LoI) and pending IN-SPACe approval are confirmed by multiple government sources.

📊 Prediction

The satellite spectrum pricing debate will likely result in a compromise pricing framework that balances the interests of both terrestrial and satellite operators. Given the government’s push for digital inclusion, satellite providers like Starlink will probably receive some regulatory incentives to promote rural connectivity, but not at the expense of established telecom companies. Over the next 1-2 years, expect incremental adjustments to spectrum fees, possibly introducing usage-based charges or minimum thresholds. This evolving landscape may accelerate hybrid telecom models where terrestrial and satellite services coexist and complement each other, expanding India’s broadband reach while preserving competitive market dynamics.