Mukesh Ambani’s Reliance Industries has entered a new phase of its ongoing competition with Elon Musk’s Starlink over how India should allocate satellite broadband spectrum. A letter seen by Reuters reveals that Reliance has challenged the Indian telecom regulator’s decision, arguing that the process of assigning satellite spectrum was incorrectly concluded. According to Reliance, the Telecom Regulatory Authority of India (TRAI) improperly determined that the spectrum should be administratively allocated rather than auctioned, a move that could significantly benefit players like Musk’s Starlink.
The dispute centers on the allocation methodology of satellite spectrum for broadband services in India, a market projected to grow at an annual rate of 36%, reaching a total value of $1.9 billion by 2030, as per Deloitte. This issue has become highly contentious, drawing interest from some of the world’s largest players in satellite internet services, including Musk’s Starlink and Amazon’s Project Kuiper. Both of these global entities favor administrative allocation, where spectrum is distributed based on an application process rather than a competitive auction.
In contrast, Reliance, led by Asia’s richest man, Mukesh Ambani, and his telecom giant Reliance Jio, is advocating for the auctioning of spectrum, a process that typically generates significant revenue for the government and creates a more competitive environment. Reliance’s opposition to administrative allocation stems from their belief that an auction would ensure a fair marketplace, allowing for a level playing field among competitors, particularly when it comes to foreign entrants like Starlink and Project Kuiper.
The Legal Debate Over Spectrum Allocation
The legal interpretation of how India allocates satellite spectrum has been at the core of the ongoing dispute. Industry sources have noted that last year’s decision, which seemingly favored administrative allocation, set the stage for companies like Musk’s Starlink to move ahead with their plans for satellite broadband in India. Reliance, however, contests that the current legal provisions do not adequately cover satellite broadband services for individual or home users, making the interpretation problematic.
To address these concerns, the Telecom Regulatory Authority of India (TRAI) has initiated a public consultation to gather input from various stakeholders, including telecom companies and satellite service providers. However, Reliance has taken issue with the process itself, arguing that TRAI prematurely interpreted that the spectrum should be administratively allocated without proper consultation or studies. In a private letter to India’s Telecom Minister, Jyotiraditya Scindia, dated October 10, Reliance’s senior regulatory affairs official, Kapoor Singh Guliani, requested that the consultation process be restarted to ensure a more thorough review of the issue.
Request for a Level Playing Field
Reliance’s primary concern, as outlined in their correspondence, is that TRAI’s consultation paper assumes administrative allocation is the best path forward without conducting sufficient research or analysis. According to Reliance, this assumption undermines the fairness of the process, particularly given the competitive nature of the telecom and satellite broadband sectors. The letter from Guliani stated, “TRAI seems to have concluded, without any basis, that spectrum assignment should be administrative.” Reliance believes that an auction-based approach would provide a level playing field, especially when foreign players, such as Starlink, have the potential to disrupt the market by offering voice and data services traditionally provided by terrestrial telecom operators.
In their public statement to Reuters, Reliance Jio emphasized that it had formally requested TRAI to amend its consultation paper to ensure that the methodology for spectrum allocation is properly addressed. “It is imperative upon TRAI to also consult on the methodology of assignment” of the satellite spectrum, the statement read.
Response from TRAI
Despite Reliance’s concerns, a senior TRAI official maintained that the process is being conducted according to the due procedures. The official stressed that Reliance is welcome to participate in the public consultation and provide its feedback during the designated period. The recommendations that arise from this consultation will serve as the basis for the Indian government’s final decision on the matter.
The tension between Reliance and Starlink represents a larger conflict in how India’s satellite internet market should be structured. Starlink, which is already a global leader in satellite-based internet services, has been eager to establish itself in India. However, the final decision on spectrum allocation remains a crucial factor that could determine when and how the company can proceed with its plans.
Global Trends and Local Impact
Starlink and other international satellite service providers argue that administrative spectrum allocation is in line with global practices. They point out that most countries have opted for an administrative allocation process, which helps foster the growth of satellite-based services by lowering entry barriers and expediting deployment. In contrast, Reliance has continued to push for an auction-based system, arguing that this method is crucial to maintain competitiveness, particularly when foreign companies enter the market. By allowing foreign players to potentially offer both voice and data services via satellite, the landscape of India’s telecom industry could shift dramatically, and Reliance Jio is seeking to protect its market leadership.
Reliance Jio, which currently holds the position of India’s top telecom provider with 480 million users, sees itself as being vulnerable to potential competition from satellite-based services like Starlink. If companies like Starlink and Project Kuiper are allowed to enter the market without participating in an auction, it could tilt the competitive balance in their favor, giving them an edge over traditional players that have invested heavily in terrestrial infrastructure.
The Road Ahead
As TRAI continues its public consultation, the future of India’s satellite spectrum allocation remains uncertain. The Indian government will ultimately have to decide whether to stick with an administrative allocation system, as favored by Starlink and global players, or opt for an auction-based approach, as championed by Reliance. The outcome will likely have far-reaching implications, not only for India’s satellite broadband market but also for its broader telecom landscape.
For now, Reliance and Starlink remain at odds, each advocating for a system that aligns with its strategic interests. As the market for satellite broadband continues to grow in India, the final decision on spectrum allocation will be a pivotal moment in determining the future of internet connectivity in the country.