Telecom Meets Space: Navigating India’s New Legal Architecture For Satellite Communications

India’s telecom and satellite communication landscape has undergone rapid transformation in the past three to four years, demolishing old statutory frameworks and pivoting to the Government’s vision of a Digital India.

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India’s telecom and satellite communication landscape has undergone rapid transformation in the past three to four years, demolishing old statutory frameworks and pivoting to the Government’s vision of a Digital India. Various reforms aimed at ease of doing business in India have been brought in – in the form of the Telecommunications Act, 2023 (“Telecom Act”)1, liberalization of foreign direct investment (“FDI”) in the space sector2, and paving way for single window clearances for authorizations3. This shift has ushered in a new era of modern regime as the telecom and space sector see an acceleration in private sector participation and heightened efforts towards a coherent, predictable, contemporary and unified regulatory framework.

While the sector continues to evolve, there is a subtle shift in the role played by the traditional bodies governing telecommunication services with the rise of new regulatory authorities to govern the space based communication services. While India must continue on the current path to redefine satellite communications in India, it is pertinent to be cautious of the development of overlapping regulatory authorities in a domain which is still evolving.

Once Upon a Line: India’s Telecom Transformation

The Indian telecom sector has been historically shaped by the twin regulations - Indian Telegraph Act, 1885 (“Telegraph Act”), and Indian Wireless Telegraphy Act, 1933 (“Wireless Telegraphy Act”). Set in the colonial era, the Indian Telegraph Act was the foundational statute that was put in place by the British government, vesting the Government with exclusive privilege to establish and operate telegraph systems and placing telecom lines across public and private property. The early 20th century saw the advent of wireless telegraphy systems with long-distance radio transmission. With increasing use of such radio equipment for communication, the Government bridged the regulatory gap by introducing the Wireless Telegraphy Act. This wireline and wireless regulatory framework formed the bedrock of India’s telecom regulation even post-independence and continues to play a prominent role today for traditional telecom services.

The Telegraph Act has given a broad ambit to the term “telegraph” which includes instruments capable of transmitting connections and electromagnetic waves like radio waves. The legal framework grants exclusive privilege to the Government to not only establish, maintain and use telegraphs but also exercise discretion over the grant of license for any such purpose and determine the rates, conditions and restrictions based on which such license can be granted. However, the Government is still vested with the power to take possession of licensed telegraphs in case of public emergency, national interest, order interception of communication, and issue blocking orders.

The legal framework in India saw major changes in the 1980s, with increased budgets allocated for the telecom sector. However, given the extensive regulatory burden, the framework did not invite significant public sector participation in the traditional communication services.

Authorised to Evolve: The Telecom Act’s New Era Begins

The 1990s saw the entry of private entities in the telecom sector, as the Government coped with the growing demand for telecom connections and lack of sufficient investments. Given the wide ambit of powers that the Government had under the Telegraph Act and the Wireless Telegraphy Act, the Government started issuing various licenses, after determining the financial terms and conditions and rules for granting spectrum. In 2012 National Telecom Policy finally introduced the Unified Licensing (“UL”) regime to achieve the aim of “One Nation - One License” across service and service areas. The introduction of the UL regime was a major step towards streamlining a fragmented legal framework that was plagued with overlapping obligations and inconsistent entry conditions.

However, further technological developments, as with the Telegraph Act and the Wireless Telegraphy Act, exposed the loopholes in this decade-old framework. UL’s service specific authorisations are now less aligned with next-generation communication technologies such as satellite-based services. Therefore, India is looking to adopt a more technology-neutral and modular authorisation regime, by way of the Telecom Act.

The Telecom Act expands the scope of existing definitions, properly encompassing current communication standards and technologies. This is evident from the replacing underlying terminologies, such as “telegraph” to “telecommunication”. Similarly, while the overall structure of the draft authorisation rules released by the Government draw heavily from the UL, various aspects which were outside the UL have been included. This includes Internet Exchange Points, Cloud-Hosted Telecom Network Providers, In-flight and Maritime Connectivity, etc. Notably absent, however, is a separate authorisation for “space-based communication” – which takes us to this final frontier of communication (as yet known) and its regulatory evolution in India.

Cracking GEO: India’s Satellite Evolution

In 2022, as the Government saw an increased global activity around space-based communication services and the entry of such providers in India, it unveiled certain policy reforms to ease procedures and streamline clearance processes for such services. The aim of the SatComm Reforms was to reduce the total timeline for clearances from relevant departments and ministries involved in satellite network clearances to 6 weeks. This includes approvals and clearances from the Department of Space / IN-SPACe for space segment, assignment of frequency and related clearances, and other operational and frequency related clearances. It proposed the constitution of the Inter-Ministerial Committee for Satellite Network Clearance to provide a single platform to co-ordinate and enable issuance of in-principle clearance in a timely and effective manner.

The SatComm Reforms also aimed at removing several redundant charges such as the space segment monitoring charges and testing charges for satellite antennas. With such reforms, the Government was looking forward to seeing more investment in the sector and expansion of satellite based services in India, specifically in difficult terrain areas, as the process to roll out their services were simplified. As intended, this had a significant impact on telecom service providers, especially satellite operators.

IN-SPACe’s Guidelines

In 2023, the Government released the Indian Space Policy (“Policy”) which earmarked different space activities that non-Government entities (“NGEs”) will be allowed to undertake. Specifically, the Policy permitted NGEs to undertake end-to-end space activities through the establishment and operation of space objects, ground-based assets, and related services including space-based communication, navigation and remote sensing. The Policy empowered the new regulatory authority, the Indian National Space Promotion and Authorization Centre (“IN-SPACe”) to act as a single window agency for authorization of space activities not only by these NGEs but also government entities. They were granted the discretion to issue guidelines and procedures in line with the policy and to create a “stable and predictable regulatory framework to provide a level playing field to Non-Government Entities in the Space sector”4.

The IN-SPACe true to its role, issued the Norms, Guidelines and Procedures for Implementation of Indian Space Policy - 2023 in respect of Authorization of Space Activities (“NGP”) in just over a year. The NGP aimed to deal with the entire spectrum of space based activities from prescribing authorizations to Indian entities for establishment and / or operation to provide space-based communication services over India or outside India to addressing third-party liability arising out of potential damages due to the space activities undertaken by Indian entities.

The NGP plugged the gap that evidently persisted within the UL regime specifically in relation to space based activities. As applicants who intended to provide space based activities sought authorization from the IN-SPACe, the regulatory body assesses the technical aspects related to radio frequency interference, contractual relationship of the service provider with the satellite operator, foreign direction investment and management and control in the entity, and the operational, infrastructural and technical capabilities of the entity to actually carry out the space activities.

The NGP struck the right cord for various entities as it envisaged a timeline of 75 to 120 days to process applications and to accommodate for the time taken for inter-ministerial consultations, advised the entities to submit their applications 6 months in advance. Given the existing architecture for obtaining approvals and authorisations, such specific timelines provided much needed regulatory stability and assurances, specifically to foreign entities who were expanding their operations in India.

The NGP though may not have gone significantly beyond what the existing regulations already provided for or addressed all of the industry needs. Entities providing space based services, specifically communication services, are now subject to parallel regulatory frameworks - the UL and the NGP. While the Policy clearly prescribes that the telecom services will be governed by the rules, regulations and policies of the DoT and the IN-SPACe will authorise the use of space objects for communication / broadcast services, entities are now required to navigate two separate authorization processes. This makes the process complex and time-consuming and has the potential to slow down market entry significantly. In fact foreign companies looking to expand their satellite-based communication services in India have faced significant hurdles and delays in securing the necessary approvals.

Draft Authorisation Rules under the Telecom Act and Space-based Communication Services

As noted above, a separate authorisation for satellite-based services is absent from the draft authorisation rules. Private players still navigating the telecom legal framework in India to launch their satellite-based communication services may not agree with placing satellite communication services in the same category as other telecom services - including mobile and internet services. Predominantly, such consolidation inevitably imposes high financial burdens and complex regulatory compliances on satellite-based service providers, creating market barriers.

The final look of these authorisations is much awaited, especially since the Government has suspended the acceptance of new applications for issuing any authorisations till the authorisation framework is notified.5

Liberalizing FDI Policy

The Government has also brought in sweeping reforms in the FDI domain. While the FDI policy earlier permitted establishment and operation of satellites through the Government approval route only, the Government eased the FDI policy in the space sector by prescribing liberalized FDI thresholds for certain sectors / activities. The new FDI policy allowed 100% FDI for manufacturing and supply of components and systems for satellites, ground segment and user segment. However, activities such as end-to-end manufacturing and supply of satellite, satellite data products, supplying user ground terminals for communicating with a satellite, supplying satellite control centre, tracking and command station, etc. allow only 74% of FDI through the automatic route.

For satellite communication services, however, which operate at the cusp of both telecommunication services and the space sector, there is potential for two divergent views. The issue of whether such services are a better fit within the scope of “telecommunication services” which allows 100% FDI through the automatic route or one of the more narrowly defined components of the space sector FDI regime is yet to be settled.

The Road Ahead

India’s telecom and satellite communication legal framework is undergoing foundational change. While the way in which the regulatory framework is developing is aligned with the Policy, the Government has uphill tasks before it as it sets out to formulate the new authorisation and spectrum assignment rules and regulations.

There is a continued need to engage in a dialogue with the private domestic and international players, industry experts, and legal practitioners to ensure that the new framework does not suffer from the same vices as the Indian Telegraph Act and the Wireless Telegraphy Act did, and ensures that India is still in the league of global competition.

The evolution of the authorisation framework under the Telecom Act will determine how effectively India integrates satellite communication into mainstream telecom service delivery. In any case, the Government’s hope would be unveiling a fresh set of legal frameworks that would be able to navigate challenges that any new-gen disruptive technology brings for the foreseeable future (preferably a century like its predecessors). At the same time, while the industry would undoubtedly want regulatory certainty, it would also be hoping that the new framework comes with a healthy dose of flexibility which allows for continuous innovation – onwards and upwards.

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