Introduction
Although India's digital communication landscape has rapidly expanded, its rural and remote regions still face significant connectivity gaps. It is estimated that more than one third of India's rural population do not have access to the internet. Satellite communication (SatCom) can bridge this gap by providing high-speed communication services to remote areas where terrestrial networks are unavailable or unreliable. Further, in addition to its significance in sectors such as shipping and aviation, SatCom can be especially valuable in case of disruptions to terrestrial networks, such as during wartime scenarios or extreme weather events.
What is SatCom and how does it work
SatCom essentially refers to the use of satellite transponders to receive, amplify, and re-transmit telecommunication signals. SatCom infrastructure comprises a space segment, and a ground segment. The space segment consists of one or more satellites in space. The ground segment includes ground facilities to track and monitor satellites, earth stations, and user devices such as Very Small Aperture Terminals (VSATs) to enable consumers to connect to the space segment.
The earth station is connected to a terrestrial network. It acts as a gateway between the terrestrial network and the space segment by transmitting (up linking) communications signals, for example voice or data signals from the terrestrial network to the space segment. The space segment in turn processes, amplifies, and re-transmits (downlinks) the signals directly to consumer user terminals (VSATs) or to earth stations connected to terrestrial networks in other locations.
Authorisations and compliances for offering SatCom services in India
There are primarily two authorisations that are necessary for offering SatCom services in India – the Global Mobile Person Communication by Satellite (GMPCS) service authorisation under the Unified License (UL) from the Department of Telecom (DoT), and an authorisation from the Indian National Space Promotion and Authorization Centre (IN-SPACe) for the space segment. Additionally, the requisite radio frequency spectrum for providing SatCom services must be procured from the Wireless Planning and Coordination (WPC) wing of the DoT.
GMPCS license
A GMPCS license will only be granted to a company incorporated in India. It authorises the licensee to provide all types of mobile services including voice and internet services by establishing an earth station in India. The services can be provided using one or more satellite systems provided that a separate earth station gateway switch is established in India for each satellite system. Among others, a GMPCS licensee is obligated to set up and maintain in India, requisite mechanisms for lawful interception and monitoring its communication services. Further, all end user terminals used for availing GMPCS services must be registered with the licensee, and all calls originating from or terminating in end user terminals in India must be routed through an earth station gateway switch in India.
The DoT recently notified certain additional compliances for GMPCS licensees to address certain potential national security concerns due to SatCom. These include - (i) ensuring that data centres used for SatCom services are located within India and storing Indian telecom data only within India, (ii) ensuring accurate geofencing in certain restricted areas and to avoid network spillovers near border areas, (iii) establishing user monitoring zones within 50kms of the international borders including coastal borders; (iv) enabling real time location tracking of end user terminals within India and ensuring that location spoofing devices are not used; (v) implementing mechanisms to restrict SatCom services to certain subscribers or geographical areas if required by the government, and to prevent access to websites that are otherwise blocked in India; (vi) preventing interference with existing satellites including geosynchronous orbit (GSO) satellites operated by the government; (vii) obtaining separate security clearance for voice and data services; and (viii) indigenising at least 20% of the ground segment within 5 years of launching SatCom operations.
IN-SPACe Authorisation
Any satellite / constellation owned by an Indian entity requires an IN-SPACe authorisation for its establishment and operation to provide SatCom services in India or outside India. Further, any non-Indian satellite / constellation also requires an IN-SPACe authorisation through an entity incorporated in India to provide SatCom services in India. In either case, Indian orbital resources or foreign orbital resources can be used for providing SatCom services.
An IN-SPACe authorisation is applicable only for a specific satellite or a constellation, and any change in the configuration of a satellite or replacing a constellation with next generation satellites will require a fresh authorisation. The authorisation remains valid for the earlier of five years or till the expiry of the operational life of the satellite. As per guidance provided by IN-SPACe, an authorisation is ordinarily granted within 75-120 days.
FDI Approval
It is relevant to note that the government recently liberalised rules for Foreign Direct Invention (FDI) in the space sector and has permitted up to 100% FDI under the automatic route, that is, without any government approval, for various activities in the space sector. For instance, 100% FDI under the automatic route is permitted for manufacturing components and systems for the space segment and ground segment, and up to 74% FDI via the automatic route is permitted for establishing and operating satellites, earth stations, satellite tracking systems, etc.
However, despite the foregoing, FDI in India is permitted only via government approval route in case the investee entity is of a country sharing land border with India or where the beneficial owner of FDI belongs to or is a citizen of such country (for example, China or Pakistan). It is extremely difficult to obtain foreign investment approvals in any business sector if the investee entity or its beneficial owner is from these two countries, let alone in more sensitive areas like the space and telecom sector. One has to be particularly concerned with investee entities having its holding entity incorporated in Hong Kong or in case of substantial Chinese shareholding in the parent entity of the investee entity.
Testing and certification of SatCom equipment
Under Indian telecom law, all telecom equipment capable of being connected with any Indian telecom network and intended to be imported to or sold in India, must undergo prior Mandatory Testing and Certification (MTCTE) for conformance with certain essential requirements. The MTCTE regime is being implemented in a phased manner, and the DoT has been notifying from time to time, lists of telecom equipment for which testing and certification would be mandatory.
In this regard, the DoT has recently brought NGSO Integrated Gateways (earth stations) and NGSO end-user terminals under the MTCTE regime. Accordingly, testing and certification of such equipment—whether imported into or sold in India—will be mandatory starting from September 2025. The responsibility to ensure compliance with this requirement lies with the manufacturer or the authorised Indian representative of the manufacturer.
Miscellaneous
Additionally, all SatCom providers will need to comply with the lawful interception and monitoring and cybersecurity rules, and other relevant regulations under the Telecommunication Act 2023 (Act). Compliance with the foregoing is mandatory for all telecom service providers in India including terrestrial communication service providers.
Other miscellaneous compliances include procuring a carrier plan approval from the Network Operations and Control Centre (NOCC) of the DoT, which is a pre-requisite for spectrum assignment; a Standard Advisory Committee on Frequency Allocation (SACFA) clearance from the Wireless Planning and Coordination (WPC) wing of the DoT for establishing wireless communication infrastructure; and an in-principle approval from the Inter-Ministerial Committee – Satellite Network Clearance (IMC-SNC) for establishing/ modifying any satellite-based communication network.
Way Forward
The Indian government's concerted push to advance the SatCom sector has created significant momentum, attracting major global players to the Indian market. As of now, Eutelsat OneWeb and the Jio-SES alliance have already received GMPCS licenses and IN-SPACe authorisations while Starlink has secured its GMPCS license and is awaiting its IN-SPACe authorisation and Amazon's Project Kuiper is awaiting its GMPCS license.
A key regulatory challenge now lies in finalising the spectrum allocation rules and associated charges. Although the Act prescribes administrative allocation of spectrum for Satcom, a few terrestrial communication service providers have expressed concerns about an uneven playing field, arguing that the higher auction-based pricing for the spectrum they procured for providing terrestrial communication puts them at a disadvantage. Further, the Telecom Regulatory Authority of India (TRAI) recently recommended a spectrum allocation charge of 4% of the AGR for SatCom providers. The terrestrial service providers have pushed back on this as well stating that the proposed spectrum charges are unjustifiably low for SatCom relative to terrestrial networks. The TRAI has however maintained that SatCom is a complimentary service to terrestrial communication services and that there is no question of level playing field. The government's final decision on the terms including charges for spectrum allocation for SatCom is hence eagerly awaited.
There are also questions around the eventual pricing of Satcom services, specifically whether it will be affordable for large-scale adoption by the highly cost sensitive Indian market or remain limited to enterprises and niche users due to high infrastructure and service delivery costs. In this context, it is relevant to note that India's telecom sector's Average Revenue per User (ARPU) is estimated to be less than INR 200, which is amongst the lowest in the world.
Nonetheless, as these regulatory and market concerns are addressed, India's broader communications ecosystem is poised to benefit significantly with enhanced connectivity and improved digital inclusion, particularly in underserved regions.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
