Nearly four years ago, Bharti-backed Eutelsat OneWeb secured India's first satellite internet licence. Jio-SES and Elon Musk's Starlink followed. All three have licences. None has launched a commercial service. As LiveMint reported, the rollout of commercial satellite broadband in India remains stuck — more than a year after the telecom regulator recommended a spectrum allocation framework — because the government has not finalised operating terms, spectrum pricing, or security clearances.
The delay is not a technicality. It is a policy choice with compounding costs.
What Is Actually Holding Things Up
Two separate blockages have fused into one paralysis. The first is commercial: the Department of Telecommunications (DoT) and the Telecom Regulatory Authority of India (TRAI) disagree on spectrum pricing. In May 2025, TRAI recommended satellite communication companies pay 4% of their adjusted gross revenue or ₹3,500 per MHz — whichever is higher. DoT wanted a 5% AGR charge, with a 1% discount for operators serving hard-to-reach areas such as borders, hills, and islands. Neither side has moved. TRAI also recommended an additional annual fee of ₹500 per urban fixed-service subscriber, designed to deter satellite operators from competing with terrestrial networks in cities where fibre already reaches.
The second blockage is security. Government officials have expressed concern about inter-satellite link (ISL) technology — the optical laser links that allow satellites in low-earth orbit to communicate directly with each other. The worry is that ISL-enabled operators could route Indian internet traffic through gateways in other countries, bypassing Indian interception infrastructure entirely. The Ministry of Home Affairs has held up security clearances while these concerns remain unresolved.
Both concerns are legitimate. Neither justifies four years of inaction. The spectrum pricing gap between TRAI and DoT is a single percentage point of AGR — a negotiable figure, not a philosophical divide. The ISL security question, while technically complex, is not unique to India: other major jurisdictions have developed lawful-intercept compliance frameworks for LEO constellations without shutting down the sector while they considered it.
The Commercial War Beneath the Regulatory Fog
The pricing dispute is not purely administrative. It maps almost exactly onto a competitive contest between Reliance Jio — which has lobbied DoT for spectrum auctions — and the foreign-backed satellite operators who prefer administrative allocation. Auction-based pricing tends to push up entry costs and advantage incumbents who already control terrestrial spectrum. Administrative allocation, consistent with the approach most countries use for satellite broadband, reduces barriers for new entrants like Starlink and OneWeb.
Analysts working on telecom policy have argued that India's insistence on auction-style methodology for satellite spectrum protects terrestrial telco revenue rather than serving consumer interest. This commercial lobbying is a primary driver of the deadlock. India's terrestrial telcos, particularly Jio, built their dominance on a distribution model that satellite internet would disrupt in rural and semi-urban markets. When a regulator's independence is tested by well-capitalised incumbent pressure, the outcome is often delay dressed as due diligence.
The irony is that Jio itself — through its joint venture Jio-SES — holds a satellite internet licence. It is simultaneously lobbying against the spectrum terms that would allow its own satellite venture to launch. That contradiction captures something essential about India's platform-economy regulation problem: incumbents operate across multiple competitive layers and can use regulatory levers in one layer to protect positions in another.
The Security Argument Needs Updating, Not Defending
India's security concerns about satellite internet are real, but the regulatory framework being applied to them was designed for a different era. Legacy clearance logic, built for geostationary satellite television, does not translate cleanly onto LEO broadband constellations that operate at dynamic orbital altitudes, use mesh ISL routing, and serve individual consumers rather than broadcast receivers.
Technology policy researchers have noted that India's delay in satellite internet licensing creates a governance vacuum that could push users in border areas — the very zones the Ministry of Home Affairs is most concerned about — toward unregulated foreign satellite services. That is precisely the security outcome the clearance hold is supposed to prevent. Delay does not reduce risk; it displaces it. Border communities with limited connectivity will find ways to connect. The question is whether those connections run through licensed, lawful-intercept-compliant Indian systems, or through grey-market terminals that no regulator can touch.
The structural fix requires decoupling spectrum pricing from security clearance processing. The two questions are independent: whether Starlink pays 4% or 5% of AGR has no bearing on whether its inter-satellite links can be brought into compliance with India's lawful-intercept standards. Security compliance requirements can be defined, tested, and enforced on their own track, tied to technical certification rather than commercial agreement. Holding both questions hostage to each other means neither gets resolved.
What the Impasse Costs India
India has over 850 million people without reliable broadband access. Satellite broadband is the most viable last-mile solution for the rural and remote populations that fibre cannot economically reach — the hill districts of the Northeast, Ladakh's border villages, the island territories of the Andaman and Nicobar chain. These are also the areas of highest strategic sensitivity. Connecting them via licensed, compliant satellite services is a security interest, not a risk to one.
Beyond connectivity, the impasse carries a signal cost. India has spent years building a narrative as a preferred technology investment destination — a stable, scalable alternative to China for global capital allocating to emerging-market digital infrastructure. That narrative depends on regulatory predictability. When companies arrive with licences and wait four years for operating terms, the narrative frays. The question global investors ask is not whether India's market is large — it clearly is — but whether India's regulatory process is legible enough to justify the capital commitment. Prolonged silence from DoT answers that question badly.
India's own space economy ambitions compound the stakes. NewSpace India Limited and private operators building on ISRO's commercial momentum need clear spectrum rules as much as Starlink does. The framework that finally emerges for satellite internet will set precedents for how India governs its broader commercial space sector. A framework built around incumbent protection and security maximalism will constrain domestic players as surely as it constrains foreign ones.
The Framework India Needs
The government's sovereign interest in this sector is legitimate: all satellite internet operators must meet India's data localisation and lawful-intercept standards as a non-negotiable condition of licence activation. That is a reasonable requirement, and the major operators have indicated willingness to comply. What the government has not done is define those requirements with enough technical specificity to allow operators to demonstrate compliance and receive clearance.
India's regulatory architecture for satellite communications was built for a different technological era — one of geostationary broadcast, not low-orbit mesh broadband. Updating that architecture requires institutional investment: updated technical standards from DoT, a revised security compliance framework from MHA that accounts for LEO constellation architecture, and a time-bound TRAI-DoT mechanism to settle the spectrum pricing question. These are the preconditions for a functioning market.
The cost of continued delay falls heaviest on the farmer in Meghalaya who cannot access agricultural price data, the school in Lakshadweep that cannot run a video class, and the border post in Arunachal that relies on slow VSAT for communication. For India to reach its digital ambitions by 2047, the regulatory machinery that enables connectivity must work faster than the commercial interests that slow it down. The satellite internet impasse is a test of whether that machinery can move. So far, it is failing.
