Understanding the economic stimulus for space activities: Opening the floodgates for greater innovation, investment and connectivity
There is some ‘breaking news’ that slipped past almost unnoticed this month while we were glued to our screens for news on the coronavirus and lockdown. While the public is well aware that the country’s space agency, the Indian Space Research Organisation (ISRO), has done the nation proud with incredible accomplishments, it needs to appreciate that great leaps in the area of commercial satellite communications are now in the offing to accelerate the progress towards the national goals of Digital India and Broadband for All.
On May 16, finance minister Nirmala Sitharaman announced that, as part of the stimulus package, the government would welcome involvement of private sector players in space activities. This brilliant and historic announcement will help fast-track national space activities, including the all-important commercial satellite communications programme. This is a most impressive step forward, and the minister and the government need to be lauded for kick-starting this great odyssey.
A few years ago, the erstwhile chairman of ISRO had pointed out that the then capacity of 34 working commercial communications satellites was barely half of what the country needed. This laid severe constraints to meeting the ever-increasing broadband demands from all sections, including the government, the private sector and millions of consumers. He urged the domestic industry to come forward and help augment the manufacture and launch of satellites. And now, this partnership between ISRO and the private sector will propel India’s future to greater heights. In the interregnum since then, the satcom gap between India and the rest of the world has not reduced but rather widened.
The finance minister’s announcement is clearly aimed at addressing the above gap and also powerfully attracting foreign investments into the country—an estimated FDI worth $3-5 billion or more. Manufacturing of ancillaries and terminals could further boost Make in India and employment.
There are three chief ways to offer connectivity—the two terrestrial technologies of wireless and wired, and both these need to have much backhaul and backbone of optic fibre cable (OFC), or the third possible technology of satellite-based communications. The last becomes eminently viable and attractive for difficult-to-access and remote areas, of which India has a plenty. Satcom is also most reliable backup or redundancy for regular locations as well as for coping with disasters. Here, we must leverage the power of private enterprise to support and supplement government/ISRO’s efforts in the strategic area.
Other countries also employ this model. While the US does depend on the national space agency (NASA for defence and strategic needs), all commercial communication satellites are built by private players such as Hughes Echostar, Viasat and Intelsat. This is in spite having only one-fourth the population India does and one of the highest fibre connectivity throughout the country, and the world.
The US relies heavily on satellite broadband to connect rural areas, with over 4.7 million subscribers connected on satellite broadband. It continues to connect additional approximately 1 million customers via satellite every year. The EU and even most countries in Asia are way ahead of India in terms of connectivity. In stark contrast, India has barely 0.3 million subscribers connected to narrowband connections. It’s time for change.
The accompanying table compares satellite broadband connectivity for the US, the EU and Asian countries versus India. It can be seen that even disregarding the aspect of broadband versus narrowband and the aspect of supporting terrestrial connectivity, while the average satellite connectivity for the other three regions considered is 0.001856 million connections per million population, in India it is about nine times lower, at 0.000231 million connections per million population.
If one considers other aspects also, then India’s satcom potential is further enhanced. The importance of commercial satellite communications applications is also shown by the accompanying graphic, which indicates the total number of satellites available globally and the percentage of satellites dedicated towards commercial communications.
With one-seventh of the world’s population and vast regions with inaccessible terrain, rural, and remote and unconnected villages, by all reasonable reckoning India should have a proportional share of the global satellite market. In 2015, the market was valued at $323 billion. Of a total of 1,381 satellites, 37% (518) comprise of commercial communication satellites.
The total number of communication satellites in orbit has grown since then, but India continues to have only a handful of these, a mere 41, all of which are government-owned and controlled. To reach the Broadband for All and Digital India goals, we should be having at least 80-90 communication satellites today. Empowering the private sector would help India bridge the gap quicker, and be in the public interest of inclusivity and provide a much-desired boost to GDP.
What lies before India is a tremendous opportunity that can be realised through the announcement of May 16. These reforms will attract huge FDI, lead to employment generation, and offer local players a competitive boost in Indian and global markets by promoting Make in India. This sector will always be open to healthy competition, and a vibrant market as a result is likely to witness huge customer benefits besides manifold increase in government revenues. We believe this is a landmark announcement and marks a watershed moment in the country’s space sector.
The demand for satcom is further accentuated by the exploding data demand due to IoT, 5G, Industry 4.0, Digital India, smart cities, etc. Additionally, with the Covid-19 pandemic, there has been a significant shift in working patterns. With a large number of the active workforce working from home, the demand for quality internet connectivity in rural areas has skyrocketed.
The government alone cannot cope without the active involvement and cooperation of the private sector. It is clear the government now expects private sector players to jump in and do their duty to help realise Digital India through the important role of satcom. We hope ISRO and the government capitalise on the momentum gained by the May 16 announcement.
The sky is not the limit for Indian satcom. This can be an example of atmanirbharta par excellence.
The author is HonFIET (London), and president, Broadband India Forum. Views are personal (Research inputs by Debashish Bhattacharya and Chandana Bala.)