In a scathing report, the Comptroller Auditor General (CAG)of India has criticized the Department of Space(DoS) for failing to meet its target of making available satellites which were to provide 218 Ku band transponders used for mainly for Direct to Home (DTH) providers hence forcing them to use overseas facilities.

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According to the report, the DoS failed to provide satellite capacity on domestic satellites, with only three out of the planned nine satellites launched during the eleventh five year plan period. This was only 22% of the target. When it came to allocation of satellite capacity, the report also points out that Tata Sky was extended benefits that other DTH operators were not a part of.

Notes from the report:

Planning of satellite capacity

  • The DoS was supposed to make available 218 Ku Band transponders through nine satellites of which only three satellites were realized and provided 48 Ku band transponders. The report also notes that the DoS was unable to unable to maintain the satellite capacity already used for DTH service due to technical problems. This led to a which led to a forced migration of commercial DTH users (Sun DTH, Airtel and Reliance) to foreign satellite systems.

transponder demand and supply

  • The satellite launch of GSAT 8 initially intended for DTH use was delayed by more than three years. When satellite capacity was eventually available, it was not immediately earmarked and capacity remained idle from July 2011 to December 2011. The satellite was finally allocated for non DTH use.
  • The non-achievement of meeting the Ku band capacity led to crowding of foreign satellites over India over five orbital slots in Indian Skies for providing DTH services in India. The consequent increase in demand for the orbital slots would not only affect the Indian National Satellite (INSAT) system, but also would mean India would miss out on strategically important slots.
  • The DoS had arranged foreign satellite capacity for Indian DTH industry as a short term measure, but due to the delays in providing communication satellites DTH operators later did not prefer to return to INSAT system due to trust deficit. DTH services are location specific and any change in position of the satellite would result in migration costs for the DTH providers and inconvenience to customers. Therefore bringing back of service providers from satellites to INSAT system would be an improbable and difficult exercise.
  • When satellite capacity for DTH usage was available with DoS, it was not earmarked and instead lease agreements with foreign satellite providers were renewed for further periods.
  • Tata Sky, which was using 12 transponders in the INSAT system has decided to migrate to foreign satellites as a permanent measure in July 2013. Out of the total 76 Ku band transponders used by Indian DTH operators, only 19 transponders belonged to Indian operators (25% of the total). With Tata Sky’s migration, only 10% of the satellite capacity for DTH services would be serviced by INSAT system.
  • DoS launched the GSAT10 satellite in order to swap with capacity allocated to Tata Sky on INSAT4A, which was functioning with reduced power. Tata Sky subsequently declined the proposal but DoS did not allocate capacity to any other service, apprehending litigation, as Tata Sky was given exclusive first right of refusal on Ku band capacity of INSAT 4A.

Allocation of satellite capacity

  • The report also shows that Tata Sky was given certain benefits that were not extended to other DTH operators. Tata Sky was fifth in the order of preference for allocation of satellite capacity. However, Tata Sky was give precedence over Doordarshan and allocated capacity on the INSAT4A satellite.
  • The DoS also committed the exclusive first right of refusal to Tata Sky for using Ku band transponders (for DTH service) at 83° east orbital slot.  The prime slot of 83° east was advantageous to Tata Sky, since the communication satellites occupying this slot could uniformly access the length and breadth of the country. Tata Sky later decided to migrate to foreign satellites on a permanent basis and this created a difficult situation for DOS in allocating its Ku band transponders in the slot to any other DTH service provider or usage. Consequently, DOS did not allocate Ku band transponders of the GSAT 10 satellite to any other user fearing litigation from Tata Sky.
  • DOS held  a meeting with Tata Sky in July 2013 during which it agreed to relinquish the first right of refusal on the orbital slot. However, no formal amendment was effected in this regard as of March 2014.
  • The DoS also violated SATCOM policy and transponder capacity was allotted to DTH operators without convening the INSAT Coordination Committee (ICC). The ministry of information and broadcasting which was a member of the ICC was not involved in the satellite capacity allocation decision making process.

Leasing of satellite capacity

  • DOS entered into agreement with Sun DTH for the lease of 6.25 transponder units in INSAT 4B satellite at the rate of Rs 4.75 crore per transponder. DOS actually charged Sun DTH for only six transponders which resulted in loss of Rs 46.92 lakh to DOS. DOS also allowed bonus free access to satellite capacity for 1.5 months after the permitted three months time to Sun DTH which resulted in unintended benefit of Rs 3.56 crore to Sun DTH.
  • The report also points out that the lease agreements did not safeguard the interests of the government.  The lease period for the transponders in the INSAT systems ranged from 5-10 years without a provision for revision of prices. In comparison, the transponder lease agreements with foreign operators were valid only for 1-6 years and prices leased were increased by 5-33%.

Download the report: Management of satellite capacity for DTH service by Department of Space