India's much-anticipated satellite communication (satcom) services will be rolled out only after operators like Starlink and OneWeb comply with stringent security requirements and the government finalises spectrum pricing, Union Telecom Minister Jyotiraditya Scindia has stated. In a significant update, the minister also confirmed that the government is actively examining the financial relief request from beleaguered telecom operator Vodafone Idea (Vi).
Security and Spectrum: The Twin Hurdles for Satcom
In an interview, Scindia outlined the two primary issues that must be resolved before satellite services can commence operations. The first is for licence holders—including Eutelsat's OneWeb, Reliance Jio's Satellite Global Services (SGS), and Elon Musk's Starlink—to obtain full security clearances. This process involves ensuring that international gateways are secure and that all user data remains within India's borders.
The minister revealed that the Department of Telecommunications (DoT) has already allocated provisional spectrum to these satcom companies. This allocation allows them to demonstrate their compliance with the protocols set by Indian security agencies. "They are in the process of doing that, so they need to comply," Scindia emphasised.
The second major hurdle is the finalisation of spectrum pricing. Scindia clarified that this matter is being handled by the DoT and the Telecom Regulatory Authority of India (Trai). "Hopefully that should be resolved soon," he added. However, Trai and the DoT have recently disagreed on several aspects of the allocation framework. Earlier this month, Trai rejected multiple DoT proposals, including increasing the annual spectrum usage charge from 4% to 5% and removing a proposed urban area connection charge.
The DoT is now expected to present its views before the Digital Communication Commission (DCC), the apex decision-making body for the telecom sector. The DCC will then decide the future course, which may include seeking Cabinet approval.
Vodafone Idea's Relief Request Under Scrutiny
Separately, Minister Scindia addressed the ongoing situation with Vodafone Idea. He confirmed that the DoT is still examining the company's plea for financial relief. "We are today applying our minds on that. It is work in progress within the Department of Telecommunications," he stated.
Vodafone Idea has informed the government that its total liabilities stand at a staggering Rs 2 lakh crore, which includes Rs 1.19 lakh crore in outstanding spectrum dues. The telco has warned that without government support, it may not survive, potentially leading to significant losses for the exchequer in unrecovered dues and a collapse in equity value. The Supreme Court has allowed the government to address this issue using its policy-making powers.
When questioned about concerns over repeatedly bailing out Vi, Scindia clarified that no fresh relief has been granted. "We have not given any relief as such. We have converted our dues into equity. Therefore, we hold a 49 per cent equity stake in Vodafone against dues of close to... Rs 37,000 crore. That is now the Government of India’s equity stake in that company," he explained.
In the absence of further intervention, Vodafone Idea faces a daunting financial timeline. The company must pay approximately Rs 18,000 crore by March 2026, followed by similar annual payments for the subsequent six years. This is a critical challenge as Vi's annual liabilities are more than double its operational cash generation, which has ranged between Rs 8,400 and Rs 9,200 crore over the past three years.
Maintaining Market Competition
Vi has cautioned that any threat to its operations could push the Indian telecom market into a duopoly, potentially leading to higher tariffs for consumers. However, Minister Scindia expressed confidence in the current competitive landscape.
"If you look at countries across the world, very few can boast of four providers of telecom services. India today has four very robust telcos," he said. He noted that Vodafone Idea and state-run BSNL together still serve over 300 million customers. "We would like to see that continue," Scindia concluded, underscoring the government's intent to preserve a multi-operator market.
