Elon Musk vs Mukesh Ambani battle over satellite broadband allocation in India

Billionaires Elon Musk and Mukesh Ambani are at odds over a crucial decision shaping the future of satellite broadband in India, should satellite spectrum be auctioned or assigned administratively? This debate isn't just a clash between industry giants; it has far-reaching implications for India's digital future and the global satellite broadband landscape.

What’s at Stake?

The main point of contention is the allocation of satellite broadband spectrum—a vital resource for providing satellite-based internet services across India. The spectrum is essential for delivering high-speed internet, especially to remote and underserved regions. As the demand for connectivity grows, the decision on how to allocate this resource will influence the development of satellite broadband in the country.

The Two Sides

Elon Musk 's Position: Represented by Starlink, Elon Musk is advocating for an administrative allocation of satellite spectrum, following the practices of the International Telecommunication Union (ITU). The ITU, a United Nations agency, designates satellite spectrum as a shared global resource rather than auctioning it off. Musk argues that auctioning the shared spectrum would be unprecedented and could slow the progress of satellite broadband development, which is crucial for bridging the digital divide.

Mukesh Ambani ’s Standpoint: On the other hand, Mukesh Ambani’s Reliance Jio supports the idea of auctioning the spectrum. They argue that an auction is essential to ensure fair competition, especially with the entry of foreign players into the Indian market. Jio believes that an auction would level the playing field and potentially bring in significant revenue for the government, as seen with previous telecom spectrum auctions.

The Government’s Stance

In a recent decision, the Indian government leaned toward administrative allocation, aligning with global norms. Telecom Minister Jyotiraditya Scindia emphasized that while the spectrum would not be auctioned, it would not be free of cost. The Telecom Regulatory Authority of India (TRAI) will establish a pricing formula to ensure transparency and fair pricing.

Scindia pointed out that auctioning the spectrum would diverge from international practices, as most countries allocate satellite spectrum administratively. By following the administrative approach, India aims to stay consistent with global trends, potentially encouraging international investment in its satellite broadband market.

The Stakes are High: A Market Poised for Growth

The satellite broadband sector in India is on the brink of explosive growth. According to Deloitte, the market is projected to grow at a staggering rate of 36% annually, reaching $1.9 billion by 2030. This booming demand makes the decision on spectrum allocation more critical than ever.

For India, satellite broadband represents a chance to bridge the digital divide, providing high-speed internet to vast rural areas that terrestrial networks struggle to cover. This potential for transformative growth fuels the urgency to get the allocation process right, ensuring that it benefits the country’s digital economy.

A Brief History of Spectrum Auctions in India

India has a long-standing tradition of auctioning spectrum for mobile networks. Starting with the 2G auction in the early 2000s, the country saw significant developments with the rollout of 4G and 5G. The 4G auction in 2010 brought rapid expansion of high-speed internet, although it also highlighted issues such as pricing and payment terms. The 5G auction in 2022 raised around ₹1.5 lakh crore, enabling operators like Jio, Airtel, and Vodafone Idea to launch services across major cities.

However, satellite spectrum differs fundamentally from terrestrial spectrum. While terrestrial networks cover specific geographical areas, satellite spectrum is shared and used globally, which complicates the question of whether it should be auctioned.

Why Not Auction Satellite Spectrum?

Critics of auctioning argue that the unique nature of satellite communications—such as its ability to reach remote regions and deliver services differently from traditional networks—demands a different allocation approach. Auctioning could lead to high costs for satellite operators, potentially making it less feasible to provide affordable internet access in remote areas.

The administrative allocation method, on the other hand, aligns with how most countries manage satellite communications. This approach aims to encourage rapid deployment and investment in satellite broadband, helping to close the digital gap in underserved communities.

The Consultation Process and Industry Reactions

Currently, TRAI is conducting public consultations to gather input from various stakeholders. Mukesh Ambani ’s Reliance Jio has called for a restart of the process to ensure a level playing field, while international players like Starlink, Amazon’s Project Kuiper, and OneWeb have voiced support for the administrative route.

This consultation process will play a pivotal role in shaping India's policy on satellite spectrum, balancing international norms, the interests of industry players, and the country’s digital aspirations. The outcome could set a precedent not only for satellite broadband but also for future spectrum policies, including the upcoming 6G and beyond.

What’s Next?

As India deliberates on how to allocate its satellite broadband spectrum, the decision could have a lasting impact on the country’s connectivity landscape. Choosing administrative allocation could fast-track the deployment of satellite broadband, benefiting millions in remote regions. On the other hand, an auction could provide a significant financial windfall for the government but might slow down rollout and accessibility.

The billion-dollar question remains: Will India prioritize global norms and rapid deployment, or will it opt for a potentially lucrative but contentious auction? The coming months will be crucial in determining the future of satellite broadband in India—and perhaps even setting the stage for the next era of global communication technologies.

As the debate unfolds, one thing is certain: the decision will shape India's digital landscape for years to come.