DoT Rejects TRAI’s ₹500 Satcom Levy Proposal, Seeks Review Amid Rural Rollout Push

The Department of Telecommunications (DoT) has turned down the Telecom Regulatory Authority of India’s (TRAI) proposal to impose a ₹500 annual levy on urban satellite broadband users, aimed at subsidising rural connectivity. The move was intended to accelerate the rollout of satellite communication (satcom) services in India, but DoT officials reportedly found the levy impractical and ineffective in bridging the urban-rural digital divide.

TRAI’s ₹500 Levy for Rural Satellite Internet Dismissed
According to reports, DoT has asked TRAI to reconsider its recommendation, questioning how a nominal charge of ₹500 per urban user would meaningfully boost rural satellite internet adoption. The regulator had also suggested utilising the Digital Bharat Nidhi (DBN) — earlier known as the USO fund — to subsidise satellite terminals in underserved areas, a proposal that has now been rejected.

While dismissing the levy, DoT has accepted TRAI’s pricing model for satellite spectrum allocation. However, it has asked for a clearer rationale behind TRAI’s suggested figures and policies. The department will reportedly return the recommendations for further review.

Stricter Security Rules for Satcom Operators
In parallel, the government has introduced stringent security regulations for satcom companies such as Starlink (Elon Musk’s SpaceX), OneWeb (backed by Bharti Group and Eutelsat), and Jio SES.

Key requirements include:

• Mandatory legal interception of satellite services.
• Ban on routing user data or linking connections through facilities located outside India.
• At least 20% indigenisation of ground infrastructure within five years.
• Gateway and hub locations requiring security clearances.
• Blocking of websites restricted in India, similar to telecom operators.

The satellite spectrum allocation rules are now the final step before Starlink India launch, OneWeb satellite internet rollout, and Jio satellite broadband services. Government officials suggest the new framework will be finalised by September 2025, clearing the path for global satellite players to enter India’s internet market.

TRAI has recommended administrative allocation of satcom spectrum, avoiding auctions. It suggested a five-year spectrum validity with possible extensions of up to two years, depending on market conditions. This has been a point of contention, with Reliance Jio and Bharti Airtel initially pushing for auctions to ensure fair competition.

India’s Rural Digital Future
India, with nearly 65% of its population living in rural areas, faces a major digital inclusion challenge. While 5G rollout continues in metros and Tier-1 cities, satellite broadband is seen as a critical solution for connecting remote and underserved regions. The debate between TRAI and DoT reflects the urgency of balancing affordable internet access with sustainable business models for satellite operators.