India's debate on Open Skies

25 Jul 2006

(The Economic Times (India) via NewsEdge) The failed launch on July 11 of India's Geosynchronous Satellite Launch Vehicle (GSLV) from the Sriharikota Space Research Centre carrying the Insat 4C satellite - which was intended to provide fresh Indian-owned capacity for DTH and other services - has renewed calls for the Indian government to adopt an "Open Skies" policy that makes it easier for service providers to lease foreign-owned transponder capacity.

In the following passages, former TRAI member D P S Seth makes the case for liberalizing India's space sector, while former ISRO chair U R Rao maintains that the existing policy is better for the Department of Space and India's satellite customers.

Space sector should face competition

D P S Seth: The key issues to be considered are adequacy of supply to meet demand, reasonable and competitive pricing, access to technological advances to ensure ever better quality of service and lastly the implications of the policy on the economic and social fabric. Even under the prevalent situation of suppressed demand created by restrictive policies, which do not permit market to determine the costs, the demand outstrips the expected supplies ignoring the recent launch failure (which is a temporary setback).

There is a lack of competition in transponder space. We have seen what a salutary effect liberalization and competition have had in the telecom sector. In its recommendations on broadband services, TRAI in April 2004 had noted the claim of the VSAT services operators that VSAT services can save over 35% per kbps if foreign satellites are used. Even if we regard the source of information as biased, there can be no denying the fact that economies in service provisioning is the obvious fall out of competition.

Currently used technologies require larger receiving dishes compared to what is possible with several foreign satellites, for both VSAT and DTH services, and directly affect the consumer in terms of the cost and quality. Using smaller dishes can cause greater interference but this can be taken care of during the mandatory SACFA clearance.

The greatest gain in going in for a liberal transponder policy comes to the remote rural sector where other means such as optic fiber and copper cables are not feasible. Lowered costs under conditions of competitive supplies would help popularize internet in these areas besides help making available broadband services.

Various pilots have established that rural demand is less voice centric and more data centric - a situation where VSATs become a good choice. Adding entertainment will further the business case in these areas.

Security concerns are a factor one cannot lose sight of. However, if the hub station is located on our soil this concern can be adequately met. The space sector has earned enough laurels to move forward and face competition with confidence.

Current policy benefits both DoS and users

U R Rao: Currently, private service providers dealing with fixed satellite, broadcasting and internet services are required to apply to the Department of Space (DoS) for their requirement of space transponders, which is met from INSAT capacity. Where INSAT capacity is inadequate, DoS leases transponders from other satellites to meet the demand of all such users, till it is able to augment the indigenous satellite capacity.

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