Department of Space continues to play spoilsport
It is ironic that, while the NDA passed a policy to allow private players to build their own satellites way back in 2000, with 74% FDI levels, there has been no single firm that has come in so far despite the huge shortages in capacity. Indeed, as FE reported yesterday, the Department of Space (DoS) is reluctant to fast-track the application of the US-headquartered Hughes Network Systems to invest $500 million to build satellites with data delivery speeds that are 100 times what the conventional ones in use in India provide—the decision to fast-track US investment applications is being dealt with by an inter-ministerial committee, set up in the light of US president Barack Obama’s visit next week. The Hughes proposal, interestingly, was first made in 2010, but there has been no movement on it so far.
If India had enough local satellite capacity, the refusal to clear Hughes proposal would still make sense, but India is woefully short, and nearly 60% of all capacity available today is on foreign satellites—under the current system, all satellite capacity is made available through the DoS which, in turn, leases this from global operators if it does not have enough local capacity. Indeed, according to a CAG report, out of the 9 Ku-band satellites that were planned during the last Plan period, only a fifth of the target could be achieved. According to the Indian Satcom Report of 2014, total demand for regular satellites is projected to rise from 214 transponders in 2013 to 376 by 2023 and for High Throughput Satellites (this is what Hughes wanted to build) from 0.8 Gbps (HTS satellites are measured by the speeds at which they transmit data since their architecture is different from that of regular satellites) to 10.9 Gbps, which is an annual growth of 30%. All the numbers, it has to be added, are subjective and depend upon both capacity available and costs—if greater bandwidth is available and at competitive prices, demand will automatically get created. To put things in perspective, standard TV uses 4 lakh megapixels per frame while this jumps to 2 million for HD TV and to 8 million for 4K TV—so, if a single transponder could cater to 4 standard TV channels, it can only cater to 1 HD channel.
While some part of the problem is DoS’s reluctance to deal with open markets, a part of the problem has been created by the hype over the Antrix-Devas deal where, completely incorrectly, satellite spectrum was equated with telecom spectrum to conjure up extraordinary figures of notional losses due to the deal. While DoS will need to address this issue squarely, it has to be kept in mind that Digital India cannot succeed unless India has a lot more bandwidth available; and unlike optic fibre which takes a lot of time and effort to lay, satellite capacity is easily deployed in even remote villages.