• Purushothaman KG, Partner |
3 min read

As India sets its sights on becoming a digitally empowered nation and the third-largest economy in the world, satellite communication will be a vital cog in helping it achieve this milestone. Satellite communication (satcom) plays a crucial role in providing essential services and fostering technological advancements, and India should draw on the best practices from countries that have successfully leveraged this technology to fast forward its growth.

India has significant potential for space-based solutions that can be leveraged to meet the growing demand for WFH, OTT, mobile banking, online education, and other services.  The Indian satellite communication market was valued at USD 2.23 billion in 2023 and is projected to grow manifold to USD 25 billion by 2028.  Satcom, along with 5G and semiconductor manufacturing, is projected to contribute 1.6% to the country’s GDP by FY2028. Satellite communication can also provide broadband services to underserved regions, reaching remote villages across various parts of the country.

Globally, countries like the US have deployed satcom for military, government, commercial and consumer applications. Countries like China are rapidly expanding their satcom infrastructure and applications with its ambitious space program and demand for rural connectivity, while the European Union member states are a significant market for mobile broadband, broadcast and emergency response.

India can learn from these global examples to enhance its capabilities in satcom and address the challenges it faces. A favorable policy environment that encourages greater private sector participation and entrepreneurship will foster innovation and bring more dynamism into the industry that is currently dominated by government agencies and a select few private players. Higher government investment in space, academic collaboration for R&D and access to finance through grants and sovereign funds will also be crucial to ensure long-term success and sustain the sector’s momentum.

Several countries have successfully implemented public-private partnerships (PPPs) to enhance their satellite communication capabilities, and collaborations between government agencies and private enterprises have proven to be effective in driving innovation, reducing costs, and accelerating the deployment of new technologies. India can explore similar partnerships and encourage collaboration between the Indian Space Research Organisation (ISRO) and private entities.

The country’s vibrant startup ecosystem can also be an important constituent of the Satcom sector. Data shows Indian startups have shown keen interest in this segment with the number of space-focused startups going up from just one in 2012 to 101 in 2022. Greater participation through support for pilot projects, financing at the ideation stage as well as creating a robust platform for collaboration between business and academia can jumpstart the sector.

Incentivisation through tax breaks and tax holidays will be especially crucial in the early stages of attracting talent, as will legal frameworks to protect IP and robust safeguards to ensure the security of data. Liberalisation of regulations to attract FDI and simplifying technology transfer norms will remove some of other bottlenecks that are impeding the growth of Satcom.

Satcom currently enables 5 billion ATM transactions a year, plays an integral role in connecting the equity market, support for cellular backhaul, enterprise networking, and in-flight, rail, and maritime communications.  However, with initiatives like the Digital India programme and by taking cues from the global successes of countries in satcom, India has the potential to emerge as a significant market and leader in space production and technology in the near future.

A version of this article was published on Feb 21, 2024  by EconomicTimes Telecom.