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Reliance Jio pushes against satellite spectrum allocation for fixed wireless access services: Report

Other telecom companies say conducting auction for satellite spectrum allocation for fixed wireless access will restrict competition and serve the interest of auction winners in future projects.

Reliance Jio has written to the Department of Telecommunications (DoT) arguing against the administrative allocation of satellite spectrum for commercial services like fixed wireless access, according to a report by the Economic Times. Fixed wireless access uses 4G or 5G radio spectrum (the same is used for mobile phone services) to provide wireless broadband connectivity between two fixed points. It can provide internet connectivity in areas where there is zero or poor terrestrial connectivity.

Reliance Jio argues that fixed wireless access (FWA) is a use case of 5G technology and as such should only be allowed through the auctioned spectrum. Further, it says that if satellite communication (satcom) providers are allowed to provide FWA services then the companies buying spectrum via auction should be refunded. Jio launched its FWA service JioAirFiber in September 2023, it claims that the service has seen a 30 times higher per capita usage of AirFiber compared to its optical fiber service. The company claims that Jio AirFiber is among the cheapest compared to similar services offered by global telecom companies.

Some context:

This isn’t the first time Reliance Jio has argued for the auctioning of satellite spectrum. In June last year, when the Telecom Regulatory Authority of India (TRAI) conducted a consultation on space-based communication services where Jio was of the minority camp of respondents arguing against the administrative allocation of satellite spectrum. It said that satcom operators were strategically planning their networks to compete with terrestrial communication service providers. It stated that administrative assignment of spectrum refers to an approach of “first-come, first-served”, which has faced criticism and scrutiny, including from the Supreme Court.

It is important to mention here that telecom companies in India have been discussing the monetization of their 5G services. Jio as well as fellow telecom giant Airtel have both highlighted that they have not currently monetized their 5G services in the past. They mentioned that due to the lack of monetization, these services were not bringing in any additional revenue. The companies are expected to increase the charges for their 5G offerings by 5-10% for 5G services compared to their 4G costs from the second half of 2024.

Reasons why others are in favour of administrative allocation:

Other satellite communication providers such as Bharti Airtel, its UK-based partner OneWeb, and international satcom providers like Amazon’s Project Kuiper and Starlink had all argued in favour of administrative allocation. One of the main points of criticism is that an auction would restrict competition by protecting auction winners from current and future competition. It has been pointed out that satellite communication is meant to cater to remote and underserved areas where it is harder to lay down cables for terrestrial networks. If satcom providers are required to participate in an auction, it can result in higher prices for customers as those who pay the winning bid would want to pass on their costs to the customers.

Jio has the majority share of both the wired and wireless broadband communication market. Given its domination of the terrestrial telecom market and the competition concerns raised by other players, one has to wonder whether the reason Jio suggested auctions is to maintain its dominant market position as satellite broadband services start getting rolled out in the country.

Is there a point to Jio’s letter?

Despite Jio’s repeated arguments against administrative allocation, the DoT has gone ahead and implemented administrative allocation for satellite communication services.

As per the Telecommunication Act, of 2023, the spectrum would be allocated via auction for certain satellite communication services such as: Teleports, Television channels, Direct To Home, Headend In The Sky, Digital Satellite News Gathering, Very Small Aperture Terminal, Global Mobile Personal Communication by Satellites, National Long Distance, International Long Distance, Mobile Satellite Service in L and S bands.

While administrative allocation has been specified under law, it is unclear whether satcom companies would be allowed to provide fixed wireless access services or not.

 


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