DoT likely clears 5% spectrum charge for Starlink, OneWeb, Jio Satellite

The department of telecommunications (DoT) has likely approved 5% of adjusted gross revenue (AGR) as the annual spectrum usage charge for satellite internet service providers such as Starlink, OneWeb and Jio Satellite, according to officials and industry executives aware of the development.

The companies, whose service rollout hinges on security clearance, are also expected to receive a 1% discount for serving users in government-notified hard-to-connect areas, such as border towns, hills, and islands, the people added.

Far-flung areas to be notified would include places where satellite internet connectivity offers an advantage over traditional mobile networks, said a government official.

The official said that on 2 September, the Digital Communications Commission (DCC) discussed the recommendations by the Telecom Regulatory Authority of India (Trai) on terms and conditions for the assignment of spectrum for certain satellite-based commercial communication services.

The spectrum will be allocated via a non-auction route for a period of five years, extendable by two years.

Trai recommendations

In May 2025, Trai recommended 4% of AGR, with a minimum of ₹3,500 per MHz, as the annual minimum spectrum charge for companies offering both fixed and mobile satellite services.

The regulator also recommended an additional annual charge of ₹500 per subscriber for fixed satellite service providers in urban areas, so that the companies do not primarily target urban users because of their high-paying capacity.

In a meeting last September, the DCC approved annual minimum spectrum charges of ₹3,500 per MHz, according to the DoT’s FY26 annual report.

The DoT, however, rejected Trai’s ₹500-per-subscriber charge for serving urban areas, believing a disincentive-led model could lead to implementation challenges, as it would have been difficult to differentiate between rural and urban areas.

“The idea is that the incentives should be based on areas where LEO/MEO (low-Earth orbit/medium-Earth orbit) satellites work better than regular technologies, like border regions, hilly areas, and islands,” said another official.

Mint‘s queries emailed to the DoT on Tuesday evening remained unanswered.

Rural-urban divide

On 17 November, Mint first reported that the government wanted to levy 1% less AGR than the standard 5% AGR if a certain percentage of satellite internet users served by the companies lived in hard-to-connect areas. The DoT had sought Trai’s recommendations on the same at the time.

In its response last December, Trai said the rural-urban bifurcation is well established in the Indian telecom regulatory framework, providing a reliable basis for policy implementation and compliance monitoring.

“Given the relatively higher purchasing power of subscribers in urban areas compared to rural areas and hence the high demand/consumption of data in these regions, it is possible that NGSO (non-geostationary satellite orbit) -based FSS (fixed satellite service) providers may focus more on urban areas. This could potentially undermine the goal of bridging the digital divide in rural and remote areas,” Trai had said.

The regulator had added that imposing a per-subscriber charge of ₹500 per annum in urban areas, therefore, would provide an incentive for operators to expand their services into rural and remote areas.

As part of a back reference to Trai on satellite spectrum assignment, the DoT also rejected Trai’s recommendations on the provision of a subsidy for each fixed satellite user terminal in the rural areas at an appropriate amount through a direct benefit transfer or Digital Bharat Nidhi (DBN) fund, which is there to bridge the urban and rural digital divide.

To be sure, satellite communication (satcom) operators will also have to pay an annual licence fee of 8% of AGR, as per the DoT’s current authorization terms.

“Satellite internet is being projected as a rich users’ service. It does not seem affordable for the common man. The government should normally recover the cost of managing the spectrum. They should not make it a profit-earning thing but only to recover operational expenditure,” said Satya N. Gupta, former principal advisor at Trai.

Satcom, according to Gupta, can never be affordable to the remote and rural masses. If the purpose is to bridge the digital divide through this expensive medium, a very high level of subsidy will be required.