Satellite-based technology can transform connectivity. GoI needs to enable it

GoI last week put out an advisory cautioning people that the pre-selling pitch of Starlink Internet Services to offer satellite-based internet services in India is not licensed. Since then, the company has reportedly applied for one. Starlink’s a division of SpaceX, a private American aerospace company, that’s among a group of businesses on the threshold of disrupting connectivity through satellites. The development showcases the policy challenges for GoI as it tries to balance many interests without holding back new technology.

5G is expected to transform connectivity. Current technological advances here span overlaying existing 4G networks with non-standalone 5G, among others. The frontier technology, however, is the use of satellites to bypass hurdles associated with terrestrial networks. One data point explains the economics underpinning it. Between 1970 and 2000, the average cost of launching an object into orbit was around $18,500 per kilogram. Since then, it’s fallen to about $2,720 per kg, and will keep going down. In this backdrop, the disruption is coming through Low Earth Orbit satellite (Leo) which is below 10 kgs and orbits the planet many times a day at a distance of 500-1,500 kms. From China to traditional private satellite companies and now new players, including representatives of Big Tech, constellations of Leo are being launched. The thousands of satellites planned can shake up connectivity.

GoI has been looking for ways to adapt policy to emerging trends. In November 2020, telecom regulator Trai was asked to recommend a licensing framework for satellite-based connectivity. In August, Trai made its suggestions. The welcome feature of it was the regulator wants policy to be agnostic to models, types of satellites or spectrum bands. Moreover, it feels that the prevailing telecom policy for universal licenses, which was introduced in 2013, can be tweaked to remove any constraints that may hold back licensed firms from tapping new technologies. In short, policy shouldn’t try to pick the winner.

Technology underpinning connectivity has changed rapidly in the last two decades. To the creative destruction inherent in it, poor policy choices in India have added a layer of unwarranted value depletion. The takeaway is that policy has to be tweaked to account for two features. Technological evolution is breaking down barriers and leading to convergence across sectors. And no regulator can anticipate the future. Policy tweaks, therefore, have to account for unforeseeable changes and provide a pathway for incumbents to adapt and others to enter. India’s success in a digital world depends on getting policy adjustments right.

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