Starlink's Spectrum Tax Challenge in India

Starlink, the satellite internet venture led by Elon Musk, is likely to face a new challenge in India with the imposition of a spectrum tax. This tax, which had been abolished for terrestrial network providers like Reliance Jio, Airtel, and Vodafone Idea, could increase service costs for Starlink in the country.

According to sources, Starlink will be required to pay around 3% spectrum usage charge (SUC) on its adjusted gross revenue from India. This is due to the administrative allocation of telecom airwaves to satellite operators, as per the new Telecom Law passed in December 2023.

Regulatory Discussions and Future Steps

The Telecom Regulatory Authority of India (Trai) is currently finalizing matters related to the pricing of satellite spectrum, its tenure, and other taxation issues. Discussions within Trai suggest that mandating SUC for satellite players is necessary since they will be allocated spectrum administratively at a predetermined price.

Trai is expected to submit its recommendations on satellite spectrum allocation soon, which will then be considered by the Department of Telecom (DoT). Following an analysis, DoT may raise further queries before taking the matter to the inter-ministerial Digital Communications Commission (DCC) and, subsequently, the Cabinet for approval.

Impact on Other Satellite Operators

This spectrum usage charge will not only affect Starlink but also other satellite operators such as Eutelsat One Web and Reliance Jio-SES, indicating a broader impact on the satellite communication industry in India.