Satcom rollout needs security compliance: Scindia

Satellite (satcom) communication services will be rolled out in the country after players in the segment, including Elon Musk-owned Starlink, comply with the demands of security agencies, Union Telecom Minister Jyotiraditya Scindia said. The Minister, in an interview to PTI, said the Government will soon be in a position to allocate spectrum to satcom players — Starlink, Eutelsat One, and Jio SGS — once Department of Telecom (DoT) finalises spectrum pricing.

“There are two issues that need to be addressed. One by the licence holders OneWeb, Reliance Jio, and Starlink, which is to comply with security clearances regarding international gateways, ensuring data remains in India, and so on,” Scindia said. The minister added that the Government has already allocated provisional spectrum to satcom companies to demonstrate compliance capability with security agencies. “They are in the process of doing that, so they need to comply,” Scindia said.

He noted that the Government is in the process of finalising spectrum pricing, which is being dealt with by DoT and the Telecom Regulatory Authority of India (Trai). “Hopefully that should be resolved soon,” Scindia said. Trai and DoT have differences on several points over spectrum for satcom services. Earlier this month, Trai rejected several suggestions made by the DoT on spectrum allocation for satcom services, including levying a 5 per cent annual spectrum fee on satellite communication players instead of 4 per cent, and scrapping a Rs500 fee per connection in urban areas, among other points.

DoT is expected to give its presentation before the apex decision-making body in the telecom sector, the Digital Communication Commission (DCC). The DCC will decide on the future course of action on spectrum pricing, which may include seeking Cabinet approval on the final decision. Talking about relief sought by Vodafone Idea (VIL), the minister said the DoT is still working on it.

“We are today applying our minds on that. It is work in progress within the Department of Telecommunications,” Scindia said.  VIL, in a letter to the DoT earlier this year, said its liabilities to the Government are to the tune of around Rs2 lakh crore, which includes Rs1.19 lakh crore towards spectrum dues.

 The company said that in case of no support, the Centre will face significant direct monetary loss with no recovery of spectrum dues, equity value of Rs 53,083 crore becoming nil, and no recovery of AGR dues. The Supreme Court has given the Government an option to resolve the issue within the ambit of its policy-making powers.

When asked about the sustainability of repeated relief to VIL, the minister said no relief has been given to the company so far. “We have not given any relief as such. We have converted our dues into equity. Therefore, we hold a 49 per cent equity stake in Vodafone against dues of close to, if I recall correctly, Rs37,000 crore. That is now the Government of India’s equity stake in that company,” Scindia said.

In the absence of any relief, VIL needs to pay around Rs18,000 crore by March 2026, and a similar amount every year for the next six years. The annual liabilities on VIL are more than double its annual operational cash generation, which has been in the range of Rs8,400-9,200 crore for the last three years.

VIL has said the market will slip into a duopoly and there will be a significant hike in telecom service prices if its operations come under threat. Scindia said the Indian market continues to be robust with four operators and the Government would like to maintain that. “If you look at countries across the world, very few can boast of four providers of telecom services. India today has four very robust telcos,” the minister said.

He added that even players such as Vodafone Idea and BSNL currently serve close to about 210 million and 100 million customers,respectively. “Very few telcos in the world can boast of that. You have an economy with four players, very robust pricing, and high economies of scale in the market. We would like to see that continue,” Scindia said.