India may open door for satcom firms to serve foreign markets

These are part of the draft rules under the new authorization regime for telecom, satellite operators, internet service providers, and others released by the department of telecommunications (DoT) on Monday for stakeholders’ feedback. The comments can be sent within 30 days after which final rules will be notified.

The development assumes significance as allowing Indian gateways of these companies to serve other geographies will help them reduce capital expenditure. It would also allow these companies to serve smaller neighboring countries where it might not be cost-effective to establish ground infrastructure in each location.

The companies including Kuiper, OneWeb and others have urged the government to serve other locations as well from the gateways in the country.

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As per the draft rules, the companies can enter into arrangements with entities providing telecommunication services, in areas outside India, after obtaining all clearances to provide such services in the relevant jurisdiction where the user is located.

Serving other geographies from India for these satellite internet companies, however, would be subject to obtaining necessary approvals in the respective foreign jurisdictions and adhering to directions issued by the government, the DoT said in the draft rules.

Once finalised, the rules would shift the licensing of the telecom sector to a new authorisation regime as specified under the Telecom Act.

The draft rules, however, do not provide any specific timeline for companies to switch to the new authorization regime. “The regime is simpler and will reduce the compliance burden,” an official said on condition of anonymity, adding that the companies will be provided an option to choose between the current and the new authorization regime.

Concerns on new authorization regime

In the new authorisation framework, companies will receive approval to offer services, with specific terms and conditions to be issued separately under the Telecom Act. This approach differs from the existing system, where telecom operators sign a contract with DoT that includes all rules and regulations.

Telecom operators had expressed concerns that the scrapping of their licences would create regulatory uncertainty and affect investor confidence. The companies wanted the government to maintain continuity in the agreement between them and the government after the conversion of licensing regime into authorisation.

The concern pertains to the fact that in the current licensing regime, telcos have a contractual agreement with the government that is binding, and the same can be challenged by them in the court of law in case the government changes something. In the new regime, however, the telcos said they would lose that power as the government will have the power to change terms and conditions without their consultation.

As per the new draft rules, the new authorization regime will not nullify or supersede existing licences, registrations, or permissions that were issued under the older Indian Telegraph Act, 1885. This indicates a mechanism for the continued validity of older licences, such as the unified licence.

Among key things, the new rules emphasize national security and data sovereignty, requiring that domestic telecommunication traffic is not routed outside India.

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Operators must also ensure that all data and information associated with their telecommunication networks are stored within India, the rules said. Security provisions include mandates for lawful interception and monitoring facilities, and strict conditions on remote access to the network from outside India.

Spectrum on the way

To be sure, the government is currently in the process of finalising the contours of allocation of satellite spectrum to the operators and fee for the same. So far, OneWeb, Starlink and Jio Satellite have secured the licences in the country to provide satellite internet services.

As recommended by Trai and under consideration by DoT, satcom companies will have to pay annual spectrum charges of either 4% of their adjusted gross revenue (AGR) or ₹3,500 per MHz, whichever is higher. Additionally, Trai has recommended an additional annual charge of ₹500 per subscriber for such service providers in urban areas.

Satcom operators will also have to pay an annual authorization fee of 8% of adjusted gross revenue (AGR) to the government, according to the current authorization terms of the DoT.

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