They have raised objections to the recently-released draft Telecom Authorisation Rules 2025, issued as part of the Telecommunications Act 2023, saying the rules treat satellite services as just another technology rather than a full-fledged service, and have demanded a dedicated permit for them.

In a letter to Union communications minister Jyotiraditya Scindia dated 29 September, the Broadband India Forum (BIF), which represents such satellite and technology companies, also expressed concerns over the proposed high entry fees and financial requirements in the draft telecom rules under the Telecommunications Act 2023.

“The draft rules are inconsistent with the Act by creating new terminologies like ‘satellite systems’ and ‘satellite systems for providing telecommunication services’, instead of acknowledging and recognising satellite-based telecommunication services as a separate service,” T.V. Ramachandran, president of Broadband India Forum, said in the letter.

Investor confidence and draft framework

According to Ramachandran, by not recognising satellite-based services separately, the draft rules risk eroding investor confidence and sentiment, impede potential foreign direct investment due to regulatory uncertainty and harsher terms and conditions, as well as delay rural and remote connectivity, where satellite remains the only viable mode.

Under the Draft Telecom Authorisation Rules, 2025, all telecom services—including mobile, internet, and satellite—are proposed to be grouped under four broad authorisation categories, without a separate category for satellite services. Once finalised, companies would no longer need separate licences for each type of service, as was the case under the old licensing regime.

Instead, they would receive broad approval to offer services, with specific terms and conditions issued separately. These rules, however, don’t recognise satellite-based services as a separate category. This means that service providers must follow the same rules and financial requirements as other telecom players, including high entry fees and compliance obligations.

TRAI recommendations

The exercise is part of the government’s move to reduce the number of authorisations for various types of telecom services, and merge them into key heads with easy terms and conditions to improve the ease of doing business in the telecom sector.

As per the draft rules released on 5 September, the DoT has proposed four main categories of service authorisation – unified, access, internet, long distance – and proposed to subsume satellite-based telecommunications within these authorisations. The government’s stance under the draft rules is different from the Telecom Act, which separately lists out certain satellite-based services. Besides, the industry also pointed the Satellite Communications Reforms 2022, which show the government’s recognition of satellite-based services.

Another key reason the satellite industry is seeking a separate authorisation is its relatively small scale compared to telecom operators like Bharti Airtel, Reliance Jio, and Vodafone Idea. The satellite internet providers have, therefore, requested lower entry fees and reduced minimum turnover requirements.

According to the industry association, the satellite sector in India currently serves around 300,000 users and generates about ₹600 crore in annual revenue, while the terrestrial telecom serves 1.19 billion subscribers and generates ₹3.25 trillion in annual revenue.

In fact, the Telecom Regulatory Authority of India (Trai), too, has recommended a separate authorisation for satellite-based telecom services. “At present, the size and scale of satellite-based telecommunication services and terrestrial telecommunication services in the country are vastly different. Satellite-based telecommunication service segment in India is under-developed,” Trai had told DoT in February, in response to a back-reference on the subject.

Fees, spectrum and final authorization

DoT had disagreed, saying that keeping satellite services under a single, broad authorisation (like unified or access service) is better to prevent arbitrage. Arbitrage means a company might try to exploit differences in costs or rules between different types of licences to gain an unfair advantage — for example, using a cheaper satellite licence to offer services that are meant to be provided under a more expensive mobile licence.

Given the unique nature of satellite-based telecom services, and to encourage more companies to enter the still-developing sector in India, the regulator also recommended creating a separate licence category with minimal financial burden, including a low entry fee, to support and maintain the business focus of such providers. It told the DoT that the possibility of arbitrage, if it exists at all, could be more pronounced in case of a single authorisation for various types of services, rather than in case of a separate authorisation for satellite-based telecommunication service.

Notably, in the draft rules, DoT has provided for a ₹12 crore entry fee for the satellite-based service providers. This is 24 times higher than ₹50 lakh recommended by Trai. Besides, the bank guarantee required at the time of authorisation was kept at ₹50 lakh by Trai, whereas DoT proposed the same at ₹44 crore. The draft telecom rules also include a minimum net worth of ₹25 crore for new authorisation for satellite service companies compared to ₹1 crore recommended by Trai.

“Expecting a service segment with 3 lakh users today, to comply with same terms and conditions which are designed for 1.19 billion users is neither commercially viable nor proportionate. This is unlikely to be considered legally tenable either,” Ramachandran said, adding that India would be an outlier if it denies separate recognition to satellite services. This is because major jurisdictions such as the UK, China, France and Germany treat satellites through distinct authorizations.

As per the draft rules for authorisation, the Centre has proposed allowing the satellite internet companies to use their satellite earth station gateways in India to serve users in other countries. The same would help the companies 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.

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 also 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 authorisation fee of 8% of adjusted gross revenue to the government, according to the current authorisation terms of the DoT.