India’s satellite sector enters high growth phase

India’s satellite sector is on the cusp of a major transformation. While the sector is in the news for conflict with the telcos for the coveted 28 GHz spectrum band, the next few years are likely to witness it emerge from the shadows of the mobile industry in the country.

There are several reasons for hope and enthusiasm in the Indian satellite sector. Ernst and Young (EY) believes that India’s satellite services market will grow to about $5 billion by 2025.

Until now, the satellites have been primarily used by enterprises in India. This is mainly because of the high cost. However, this is likely to change with several players like OneWeb, Tata’s Nelco tie-up with Telesat, Elon Musk's Starlink and Reliance Jio’s joint venture with SES, among others, entering the market. 

“I haven’t seen so much innovation and investment happening in the satellite industry in the last 30 years that I have been associated with this sector," said Pranav Roach, President of Hughes Network Systems India Limited. "A key reason is that after the COVID-19 pandemic, globally there is an urgency to connect the remaining 3 billion people, and the best way to do this is through the satellite because the yet-to-be-connected are in remote and rural areas, and it is not economical for telecom service providers to set up network infrastructure in these areas. Satellite is the perfect and the most economical solution to provide quality connectivity in difficult-to-connect areas.”

Hughes recently formed a distributor partner agreement with Bharti’s OneWeb and will be distributing OneWeb’s services for six years in the country. Roach believes broadband to be the biggest use case of satellites going forward, followed by backhaul for telecom service providers.

Another reason for the positivity is that India Spacecom Policy 2020 is likely to be approved soon. The policy will provide clarity on the processes, approvals and licenses required by the companies from the Department of Space, DoT and the regulator, the Indian National Space Promotion and Authorization Center (IN-SPACe) to provide internet services in the country. 

“Once the policy is in place, we will see the rapid development of this sector. It will open up many new opportunities, and a number of new players will enter this space. It is a very exciting time for the Indian satellite industry. The satellite sector has the same potential [as the wireless sector] in terms of investment, service capability and contribution to the economic growth of the nation,” said Roach.

Need for 28 GHz spectrum 

India’s satellite sector is in the news for the conflict with the Communications Service Providers (CSPs) over the millimeter wave frequency band, the 28 GHz spectrum band. While the satellite players say this spectrum is assigned by ITU for satellites, the Indian telcos want the government to include this band in the forthcoming 5G spectrum auction. The telcos believe this spectrum is key for several 5G use cases because it ensures low latency, high speed and high capacity.

A key issue for the telcos is that with the entry of satellite players like Bharti’s OneWeb and Elon Musk’s Starlink among others, the satellite players would be providing broadband services directly to the people and thus entering their turf. 

The Telecom Regulatory Authority of India (TRAI) initially suggested a sharing model for both satellite and the telcos, but this was rejected by the Digital Communications Commission (DCC), the highest decision-making body of the Department of Telecommunications (DoT). While this still has to be approved by the Union Cabinet, for now, the 28 GHz band is unlikely to be included in the 5G spectrum auction next month.

Even as there is a lot to look forward to in the satellite industry, there is a need to resolve the question of high cost. The use of satellites has remained restricted to enterprises in India because of the high cost of satellite bandwidth. The cost of leasing satellite bandwidth is significantly higher in India when compared with other countries because the sector has not developed and lags in the adoption of new technology. The players hope that issues such as these will be resolved in the upcoming policy.