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Elon Musk’s satellite internet venture, Starlink, may soon face a spectrum usage charge (SUC) in India, which could lead to higher service costs for consumers. According to sources cited by The Times of India (TOI), the Indian government is considering imposing a 3% SUC on adjusted gross revenue (AGR) for satellite operators, in addition to the existing 8% license fee applicable to all telecom companies.
The Telecom Regulatory Authority of India (TRAI) is currently finalizing key decisions on satellite spectrum pricing, taxation, and tenure, with recommendations expected soon. Once finalized, these recommendations will be reviewed by the Department of Telecommunications (DoT) and later referred to the Digital Communications Commission (DCC) before seeking Cabinet approval.
How the Spectrum Tax Will Impact Starlink and Other Players
Unlike traditional telecom providers such as Reliance Jio, Airtel, and Vodafone Idea, which were exempted from SUC for terrestrial networks in 2022, satellite companies will have to pay the levy since they are receiving spectrum via administrative allocation rather than an auction.
Starlink, Eutelsat OneWeb, and Jio-SES—Reliance Jio’s satellite venture with SES—are all set to be impacted by the proposed spectrum usage charge (SUC) in India. While the tax is currently expected to be 3% of adjusted gross revenue (AGR), discussions are still ongoing, and the final rate could be even higher. This additional financial burden, coupled with the existing 8% license fee applicable to all telecom companies, may lead to an increase in the cost of satellite internet services for Indian consumers. With the SUC being a separate charge from the license fee, satellite operators could face significant cost pressures, potentially affecting their pricing strategies and market competitiveness.
Apart from the financial burden, Starlink has been facing regulatory hurdles in India. The company has been negotiating strict compliance mandates related to internet shutdown policies, surveillance, and national security concerns. The new taxation could further complicate its expansion plans in the country.
With TRAI’s final recommendations expected soon, satellite operators like Starlink, Jio-SES, and Eutelsat OneWeb will be closely watching for any revisions in taxation rates. The DoT and Cabinet’s final decision will determine whether Starlink will pass the increased costs to customers or absorb them to remain competitive in India’s growing internet market.
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