• Purushothaman KG, Partner |
3 min read

A strong economic growth momentum, despite the global headwinds, has placed India in a favourable position.  Many sectors are milking this opportunity to make impressive headway in recent times. One such sector is telecommunications, which is valued at Rs 3,000 billion, and expected to grow at a compound annual growth rate (CAGR) of nearly 7-9 per cent by FY24. The country’s focus on development and adoption of cutting-edge technologies across 5G/6G services and Satellite Communication (SatCom) has further accelerated the sector’s progress. Amid the positive momentum in the uptake of 5G services in India, one cannot ignore the importance of satellite communication or SatCom services, as the next big step in further connecting the country.

The potential of the Indian satellite communication landscape has grown exponentially, over the years. Currently, SatCom services support 5 billion ATM transactions annually, through 125,000 Very Small Aperture Terminal (VSAT)-enabled ATMs. Other key areas where they provide support include cellular backhaul, enterprise networking, rural connectivity, as well as in-flight, rail, and maritime communications. These use cases underscore the massive scope for space-based solutions in India, which needs to be aptly harnessed, given the tremendous demand for WFH, OTT, mobile banking, online education, among others.

Satellite communication is not a new phenomenon, but a technology that has been around for decades. While high cost kept it from the reach of the masses, today, India’s ingenious space programme has ushered in a paradigm shift in its usage. While 3D printing and other technologies like lighter solar panels are enabling cost reduction, it would become more affordable as the number of people using it increases, overtime. Additionally, reusable satellites would also help to cut down deployment costs.

A latest report by KPMG in India, has estimated that India’s SatCom sector, which currently stands at US$ 2.3 billion a year, will reach US$ 20 billion by 2028.  At present, the country ranks fourth in terms of investments in the sector, globally. Nearly US$ 2 billion was invested in 110 firms, locally. Placed 5th in terms of private space companies and start-ups ecosystem, the sector was opened to private players in recent months, thereby encouraging competition and innovation.  If the government works closely with the private sector to develop and ramp up satcom technology-based solutions, then it can help overcome one of the greatest barriers. Several stakeholders are of the view that with the technology becoming more affordable and easier to adopt, extending the digital network infrastructure will help connect the remotest and still disconnected parts of the country with the rest of India. 

A supportive policy environment is imperative for fostering the growth of satellite services in India. Besides fuelling private sector investments, the country needs a space law to back the thriving domestic space industry and fulfil India’s vision of expanding participation in the global space economy. To boost appropriate infrastructure and have resources in place, the government could perhaps look at putting a PLI scheme improve output and draw investment to the space industry, like successful policies implemented in the electronics and telecom industries. 

These regulations should aim to foster an environment that supports and empowers entrepreneurs and Small and Medium Enterprises (SMEs) to develop internationally scalable end-to-end products and services. Additionally, there is a need to focus on developing competency in space technologies. Furthermore, the choice between spectrum assignment and auction should be carefully considered while keeping in mind the long-term goal of using spectrum communication to reduce social disparities.

The telecom industry stands to gain tremendously from advancements in India's satellite communication capabilities. As the finance minister recently stated, India has the potential to become a strong market for increased use of satellite applications, with the capacity to attract notable FDI. Poised to become one of the largest markets for space production and technology, it is also emerging as an attractive outsourcing option worldwide, as well as the next space hub. This will further enable local manufacturing, create millions of jobs, and make a substantial contribution to the GDP. If the going goes well, then India could even secure a significant share in the global space ecosystem.

A version of this article was published on Mar 22, 2024  by Communications Today.