A funding crunch and mandate mismatch stall plans for satellite internet subsidies, leaving rural users and providers to shoulder high terminal costs as India stays focused on core infrastructure.
The Indian government has declined a proposal from the Telecom Regulatory Authority of India (TRAI) to subsidise satellite internet services for rural and remote regions. Officials said the state has limited fiscal space and cannot support additional subsidy schemes at this stage.
The Digital Bharat Nidhi (DBN) fund, which was expected to finance the subsidies, already has commitments of nearly ₹1.73 trillion for existing programmes. These include BharatNet expansion, village-level 4G deployment and other digital infrastructure projects. As a result, only a small portion of the fund remains available for new initiatives.
Officials also noted that DBN is not designed for direct benefit transfers to users. Its framework supports area-based investments, such as capital expenditure for towers, fibre, and equipment, rather than individual device-level subsidies.
Extending DBN to cover satellite terminal support, they said, would fall outside its mandate and could duplicate existing efforts.
The government expressed concern that TRAI’s suggested approach, offering subsidies for satellite user terminals, could lead to inefficient targeting. They warned that it may also create overlap with broader connectivity schemes already funded through DBN.
With subsidies off the table, customers in remote areas may need to purchase satellite terminals themselves. These devices cost around ₹100,000 each. Alternatively, operators such as Starlink, Eutelsat OneWeb, Jio Satellite and Amazon’s Project Kuiper will have to absorb the cost if they want to grow their subscriber base in rural markets.
Instead of device-level subsidies, the government is prioritising the rollout of fibre networks, improved data centre connectivity and stronger cybersecurity measures as part of its digital infrastructure roadmap for 2025.
A revised spectrum usage fee of 5% of adjusted gross revenue will apply to satellite operators, higher than the 4% recommended by TRAI.
Telecom operators argue that subsidising satellite services through DBN would be unfair, as terrestrial players contribute the majority of funds. Industry groups, including the Broadband India Forum, continue to push for support for satellite technologies. However, the government remains firm on its infrastructure-first strategy.
