India’s current regulatory environment mainly requires providers of Indian domestic services (i.e. India-related with intended coverage of India), such as Direct to Home (“DTH”) and VSAT services for using the Indian national satellite system (INSAT) . India is a reliable mature satellite market with its own satellite operator, the Indian Space Research Organization (“ISRO”), which has been providing geostationary satellite services since 1982. ISRO was established in 1969 and successfully launches satellites like INSAT. Until the early 1990s, INSAT and Intelsat dominated the Indian satellite market, which was then an international contracting organization, one of which was signed by the then governmental government operator of India (“GoI”) Videsh Sanchar Nigam Limited.
Satellite bandwidth is a key component of DTH and VSAT services, while Ku-band is the frequency of choice for all DTH and VSAT operators. In accordance with the current regulatory regime in India, any company wishing to provide subscription-based services to customers in India must originate from Indian territory and must also use either an Indian satellite or a satellite system approved by the Indian Department of Space (“DoS”). Several VSAT operators also very much want to start using Ku-band to reduce the cost of equipment through the use of small dishes. Some independent industry analysts predict that the demand for these two market segments for the Ku-band will outpace the demand for the C-band over the next 2 to 3 years. VSAT operators should also use the INSAT satellite for national communications or a DoS-approved satellite system, although preference is always given to INSAT satellites. Internet service providers also have the right to set up international gateways directly using C and Ku-bands (and options there) transponders on foreign satellites for global communications, i.e. without any intervention from ISRO. Similarly, an international long-distance service provider is allowed to offer all types of bearer services from an integrated platform using foreign satellites to provide international voice, data, fax, video and multimedia teleservices services.
The approval process for use by a non-Indian satellite or a foreign satellite by a DTH service provider includes DoS, wireless planning and the coordination wing of the Department of Telecommunications and the Ministry of Information and Broadcasting. Preference is always given to INSAT satellites, which are operated by ISRO. In cases where INSAT does not have sufficient capacity in orbit available for any particular service, the rental of foreign satellite capacity is carried out through ISRO. Approval when it is granted, usually on a short-term basis, until INSAT can run additional additional capacity. ISRO has now entered into several lease agreements with foreign satellite communications operators to cover shortcomings in transponder capacity, including Thaicom rentals with Thailand for C-bandwidth, as well as with New Skies and SES Americom for Ku-band bandwidth. Telecommunications Regulatory Authority of India constantly recommends for open Sky & Policies for all satellite users. However, this recommendation has not yet been adopted by the GoI, and it is illegal that Goi will be considered in the near future. However, this closed regulatory period seriously limits the ability of foreign satellite operators to offer Ku-band services to customers connecting from India.
Considering the above, and from a regulatory point of view, is currently the only operator capable of providing Ku-band throughput in India for using DTH or VSAT is ISRO / INSAT. Obviously, INSAT does not have enough capacity to meet current and future demand for the Indian market. Although ISRO has received approval to start building additional satellites to provide expansion opportunities, they will not be available for another 2-3 years. According to a report prepared by Loft Communications for GVF and CASBAA, the power of the C-band INSAT is virtually fully lysed, and foreign operators provide the necessary additional capacity. The report says that the total Ku-band capacity is limited to 36 transponders, assuming that the successful launch of the proposed INSAT satellites and its Ku-band offer will be fully implemented at launch without any additional growth opportunities for customers and there will not be enough bandwidth abilities for VSAT clients. With several DTH players in the Indian market, including the state broadcaster Doordarshan, Space TV (Tata Sky), Sun TV, Reliance, Bharti, Essar, Videocon; increased VSAT traffic; extended channel offerings by existing DTH operators, the gap between the available bandwidth and the required bandwidth is growing rapidly. Consequently, without the introduction of Indian satellite systems in India or the introduction of open sky policies in India, potential DTH companies will have no choice but to either reduce their operations or postpone them until there is sufficient bandwidth.
This article is an introduction to a series of articles on the provision of foreign satellite services in India. In my next article on this topic, possible entry strategies for foreign companies and satellite operators in India will be discussed.
Seema jhingan
