Scindia rejects spectrum auction proposal by Ambani and Mittal: A boost for Elon Musk

In a significant move, Communications Minister Jyotiraditya Scindia announced that the spectrum for satellite broadband will be allocated rather than auctioned, despite calls from Indian telecom giants Mukesh Ambani’s Reliance Jio and Sunil Mittal’s Bharti Airtel. The minister emphasized that this government-set pricing would ensure a transparent and fair allocation process as outlined in the 2023 Telecom Act.

Government's Stand on Spectrum Allocation

Scindia clarified that although the spectrum would not be auctioned, it would not be given away for free. The Telecom Regulatory Authority of India (Trai) will determine the pricing. He highlighted that the International Telecommunications Union (ITU) policy, which India follows, supports an assignment-based allocation for satellite spectrum. Scindia noted, "Every country has to follow the ITU, and no country auctions spectrum for satellite."

Implications for Elon Musk’s Starlink and Amazon's Project Kuiper

Elon Musk’s Starlink and Amazon's Project Kuiper have advocated for administrative allocation of spectrum, aligning with global practices. Starlink, which has applied for a license in India, benefits from this decision as it avoids the higher costs associated with an auction. This administrative allocation allows foreign firms like Starlink to offer voice and data services at a government-determined price, facilitating their entry into India's fast-growing mobile telephony and internet market.

Opposition from Jio and Airtel

In contrast, Mukesh Ambani’s Reliance Jio and Sunil Mittal’s Bharti Airtel argue that spectrum should be auctioned to maintain a level playing field with legacy operators who have invested heavily in acquiring airwaves through auctions and building infrastructure. Both companies are also eyeing the satellite broadband market and believe an auction-based approach would ensure fair competition.

The 2023 Telecom Act, passed in December, stipulates that Satcom spectrum will be allocated administratively, marking a win for companies like Starlink and Project Kuiper. As India moves forward with this approach, it remains to be seen how the country's leading telecom players will adapt to this regulatory landscape.