Trai Proposes 4% AGR Levy On Starlink, Satellite Internet Operators In India
The telecom regulator also recommended that satellite broadband spectrum be allotted for five years, which can be extended by another two years.
New Delhi: Telecom watchdog Telecom Regulatory Authority of India (Trai) on Friday recommended the pricing of spectrum to be given for satellite-based Internet services, saying that a levy of 4 percent of annual revenue or AGR as fee would be levied on operators like Elon Musk's Starlink. “Operators offering services in urban areas would have to shell out an additional Rs 500 per subscribers annually, Trai said in its recommendations to the department of telecommunications (DoT), adding that no additional levy would be applicable for services in rural areas.
AGR fee is a metric used to calculate the revenue that telecom firms must share with the government, typically in the form of spectrum usage charges (SUC) and license fees. Essentially, it is the revenue that telecom operators are required to share with the government as a percentage of their total income. The regulator’s suggestion came ahead of Elon Musk-owned Starlink’s entry to India to offer satellite broadband services.
“The 4 percent of AGR spectrum charge would be for both geostationary orbit (GSO) and non-Geostationary orbit (NGSO) operators. These would be subject to a minimum annual spectrum charge of Rs 3,500 per MHz. The AGR-based spectrum charges should be paid on an advance quarterly basis and payable within 15 days of the commencement of the respective quarter,” Trai said.
The telecom regulator also recommended that satellite broadband spectrum be allotted for five years, which can be extended by another two years. “Satcom services once available can play a vital role in taking connectivity to underserved areas where telecom networks are not available. They also play a critical role in disasters, in rescue and relief operations,” said Trai chairman Anil Kumar Lahoti.
Starlink earlier this week got a Letter of Intent (LoI) for the start of its services. It now has to procure a license before starting services in India. SpaceX, the aerospace company led by Musk, has already tied up with rivals Reliance Jio and Bharti Aitel to bring Starlink’s broadband Internet services to India. Both Indian firms will offer Starlink equipment through their network and also support customer installation and activation on devices.
Over the past few months, rivals Jio and Airtel had come together to demand an auction for awarding spectrum for satellite services in India. Musk on the other hand lobbied for administrative allocation as per international norm. In October last year, the government sided with Musk on the issue of allocating airwaves, to be used for offering low latency internet services using satellite, at a pre-decided price through administrative route.
Both the big players like Jio and Airtel, whose data usage is rapidly rising, feared lower entry cost will chip away some of their subscriber base. Based on the recommendations of Trai, the DoT would now go to the Cabinet for pricing of satellite spectrum and once approved any satcom wanting to offer services in India can apply.