The spectrum battle is once again heating up as the telecom sector continues to witness a rather eventful year. However, there are no easy players this time as Asia’s richest person, Mukesh Ambani, takes on the world’s wealthiest, Elon Musk.
The race for spectrum allocation might witness a battle of billionaires as the tussle over auction vs administrative allocation has yet again caught attention, especially now with Reliance pulling in all ropes
The spectrum battle is once again heating up as the telecom sector continues to witness a rather eventful year. However, there are no easy players this time as Asia’s richest person, Mukesh Ambani, takes on the world’s wealthiest, Elon Musk.
In a recent letter to the telecom regulator, the Reliance chairman contended that the decision to allocate home satellite broadband spectrum instead of auctioning it off was 'incorrectly concluded,' as per a report by Reuters.
While Ambani is clearly seen advocating for the auction process, other global peers in the telecom space like Amazon's Project Kuiper are raising their thumbs for administrative allocation. This is largely because administrative allocation is believed to enable multiple operators to share the spectrum. This will eventually result in a more efficient use of the same, alongside providing better competition. On the consumer end, this type of allocation might also help in lowering costs for end users.
The ongoing disagreement continues to create tensions in the space but the major bone of contention is coming from how the law (spectrum allocation which took place last year) is being interpreted by industry players. There seems to be a lot of ambiguity in the regulations which has given rise to confusion playing out in the telecom space.
Reliance has said that there are no rules in place for providing satellite broadband services specifically for individual or home users.
All this tussle over the regulatory play comes at a time when the telecom sector is witnessing one of its best in-demand years. While the topic of the allocation process has always been a controversial one, the total value of India's telecom industry has made the tussle even more worth watching.
According to Deloitte, the telecom market is projected to grow by nearly 36 per cent on yearly basis, reaching $1.9 billion by the end of this decade.
Reports reveal that Reliance is actively lobbying India’s telecom minister over satellite spectrum amid its latest clash with Elon Musk. While the telecom regulator, TRAI (Telecom Regulatory Authority of India), is currently holding public consultations, Reliance sent a private letter last week, urging a fresh start to the process. The company stated that the telecom regulator has 'pre-emptively interpreted' that spectrum allocation should happen without an auction.
In the letter to India's telecom minister Jyotiraditya Scindia, a senior official at Reliance stated that TRAI has reached the decision over administrative allocation without any solid evidence. "TRAI seems to have concluded, without any basis, that spectrum assignment should be administrative," Kapoor Singh Guliani, Reliance's senior regulatory affairs official said in a letter to the telecom minister, Reuters reported.
Last week, the regulator stated that everything is being done by the book and Reliance is more than welcome to give feedback during the ongoing consultation period. As for the final call over the whole spectrum debate, government will be using TRAI's recommendations to make the final call.
Meanwhile, the Tesla-owner, Elon Musk, is eager to launch Starlink in India, but the issue of how the spectrum will be allocated still remains in the air.
Starlink believes that giving out licenses without an auction is in line with global trends. However, Reliance argues that an auction is necessary to ensure fairness in the industry by building a common level playing field.
As for now, a lot seems uncertain in India's telecom space. While Reliance continues to hold the crown in the industry, it would be interesting to watch out how the world's richest tries to make his way through India's opportunity-filled telecom space.