Regulation of India’s telecom sector has been in turmoil over the past several years, with ministers in court for corruption over licensing, the controversial rescinding of mobile licenses, retroactive application of taxes on terrestrial and space operators, and heavy-handed treatment of mobile satellite devices. While slow and deliberate regulation of the sector is showing tentative signs of loosening up in some areas, satellite operators will continue to feel hampered by persistent regulatory barriers to access.

The first development is a measure aimed at generating greater foreign investment in the country. In July, the Telecom Commission, part of the Department of Telecommunications (DOT), announced a proposal permitting 100 percent foreign direct investment (FDI) in the telecom sector (up from a cap of 49 or 74 percent with investment board approvals). This followed measures in September 2012 to open the retail and aviation sectors to 100 percent FDI. In August, the Cabinet approved the measure.

One Step Forward, One Step Back
The second development includes the Cabinet’s passage of a preferential market access (PMA) policy (also called “local content” or “forced localization”) last year, and the July announcement by the prime minister’s office that suspends the same policy pending further review. The PMA policy required that a wide range of telecoms equipment with security implications contain a minimum percentage of locally produced content, and would have applied to government and – it was feared – private sector procurement. Because the DOT National Telecom Policy 2012 emphasized security standards, testing, interception, monitoring and manufacturing of critical telecom equipment, operators and manufacturers may see the PMA outline emerge yet again.

Geostationary Motion Isn’t Just for Satellites
While these developments are welcomed by industry, satellite market access restrictions show little sign of being eased. Despite this, operators cannot ignore India’s significant commercial draws: continued growth of the Indian TV broadcasting and mobile backhaul sectors, along with the global increase of maritime and aero mobility services.

The principal access restriction is continued control of satellite capacity by the Indian Space Research Organization (ISRO – part of the Department of Space). Regulations still require satellite capacity to be supplied through ISRO on Indian INSAT satellites. If capacity is not available using the domestic fleet, foreign satellite capacity may be used – but only if bought through ISRO and subject to cost markup.

Although foreign satellite operators do help feed a capacity shortage through ISRO, the organization’s recent launch of India’s own navigational satellites suggest a continued and deepening preference for its national fleet rather than a dependence on others’.

Additionally, signals must also be landed at an Indian hub, regardless of whether they are from fixed or mobile terminals.

Satellite phones (Thuraya and Iridium) are currently prohibited according to the Wireless Telegraphy Act (penned in 1885), and unauthorized terminals are being seized from individuals at customs entry points and removed from ships. The DOT even places a responsibility on Inmarsat (through TCL) to ensure that it guards against “militant outfits gaining access to the use of satellite phones”.

U.S. trade talks with India are aimed at addressing these issues, but have been delayed. EU trade talks appear similarly stalled. Industry members complain that the same issues are on the table in each round. As it remains to be seen how much tentative policy developments will help foreign operators in India, the means to achieve commercial access may simply be to enter the fray and distribute service through local partners – if you can find the rules that govern it.