NEW DELHI: Starlink is likely to face a spectrum tax in India, which had been abolished for terrestrial network providers, such as Reliance Jio, Airtel and Vodafone Idea a few years back, sources said. The tax, if imposed, will increase service costs for Elon Musk-run satcom venture in India.
The move will be another challenge for the American satellite major, which is negotiating stiff compliance mandates related to internet suspension and interception. .
Sources told TOI that Starlink, which will be allotted telecom airwaves through administrative allocation (in line with the new Telecom Law passed in Dec 2023), will need to cough up around 3% spectrum usage charge (SUC) on its adjusted gross revenue from the country.
“Since spectrum will be ‘administratively assigned’ to satellite operators instead of auction, SUC will be applicable, for which final rates are being worked upon,” one of the sources said.
This will mean that apart from 8% licence fee, that all telcos need to pay, satcom players will be required to shell out an additional charge for spectrum. “It may even be higher than 3%, though this is still being discussed.”
The matter related to the pricing of satellite spectrum, its tenure and other taxation is currently being finalised by regulator Trai. “Discussions within Trai are believed to have come to the conclusion that there is a requirement to mandate SUC for satcom players, since they will be allotted spectrum administratively at a pre-determined price,” the source added.
Trai is likely to submit its recommendations on the issue of satcom spectrum allocation soon, and these will then be considered by the department of telecom (DoT). After analysis of the recommendations, DoT may raise further queries on the matter with specific references. Once satisfied, DoT will take up the matter with the inter-ministerial Digital Communications Commission (DCC). After DCC’s approval, it will be taken up by the Cabinet.
In June 2022, govt had taken a decision to remove SUC for bandwidth that had been auctioned after Sept 15, 2021 across different frequencies.
Sources said SUC will also be applicable for other satellite operators, such as Eutelsat One Web (where Airtel promoter Sunil Mittal has a stake) and Reliance Jio-SES (satcom JV between Jio Platforms and Luxembourg-based SES).