This week on LEARNING OF THE WEEK, we will cover the satellite telecommunication services in India.
Electronic devices have become a part of our everyday lives, making things easier and more connected. Take televisions, for example—they’ve come a long way from traditional cable TV to modern DTH (Direct-to-Home) satellite connections. Today, most TVs rely on satellites, offering smoother and more advanced viewing experiences. But when it comes to mobile phones, the story is different. Despite being such an important part of our lives, mobile networks still depend on ground-based wired infrastructure for calls and internet. While TVs have embraced the power of satellites, our phones are still stuck on the ground.
Phone connectivity/communications today
Mobile phones, currently operate using terrestrial networks:
Signal Transmission to Towers: When you make a call or use the internet, your phone sends electromagnetic waves to the nearest telecom tower
Data Conversion and Transmission: These towers, connected through fiber-optic cables, convert the electromagnetic waves into electrical signals. The signals then travel at high speed through the fiber network to the destination tower. Fiber-optic cables use light pulses to transmit data, ensuring fast and low-latency communication—essential for technologies like 5G.
Signal Reception at Destination: At the destination tower, the electrical signals are converted back into electromagnetic waves and sent to the receiving device.
Why are we not shifting to satellites?
Building and maintaining terrestrial infrastructure like cell towers and fiber-optic cables is much cheaper and easier compared to launching and operating satellites. This makes traditional networks the more practical choice for now. On top of that, the satellite-to-mobile technology is still developing. Additionally, Integrating satellites with ground-based networks is a challenging task that requires advanced technology and innovation.
However, many efforts are underway to bring mobile networks and other devices closer to the level of satellite connectivity, much like what we’ve already seen with televisions.
The world is gradually adopting increased usage of satellite-based communication, marking the beginning of a new era in connectivity. A name that many of you might recognize in this context is Starlink, the well-known project by Elon Musk’s SpaceX. Starlink has gained fame for its high-speed satellite internet, it serves as a relatable example of how satellite technology is being used to deliver reliable internet connectivity. This shift highlights the growing potential of satellite communication in reshaping how we stay connected.
How Satellite Communication (Satcom) works?
Major Components used in Satcom services:
- Satellite Dish – To transmit and receive signals from the user end (Eg: VSAT)
- Satellite – It acts as a relay station by receiving, amplifying and retransmitting signals between users or devices on Earth. Satellites contain Transponders (processor device), Antennas (to direct signals to specific geographic areas) and Solar Panels.
- Ground stations – Acts as the primary interface between satellites in orbit and terrestrial networks.
Satellite communication networks can be designed based on specific needs using the following topologies.
Understanding STAR and MESH Topologies
Before going through specific topologies, let us understand what a topology means. Simply put, topology is the way things are connected or arranged. For example, if you connect all your friends in a circle to play a game, that’s one type of topology, or If everyone lines up in a straight line to pass a ball, that’s another type. Today, we are talking about two types of topologies in terms of how various devices are connected for Satcom to work.
In Star topology, communication follows three steps:
- Uplink – The user’s device (e.g., computer) connects to the indoor unit of the VSAT terminal. When the user uses the internet, the indoor unit processes the data, which is then sent to the outdoor unit (VSAT dish). A signal is transmitted from the VSAT dish to the satellite in orbit.
- Transponder – A device in a communication satellite that works as a link between the satellite’s receiving and transmitting antennas. Its main job is to amplify the weak signals it gets from Earth (uplink signals) and change their frequency so they can be sent back strongly.
- Downlink – The amplified signal is then retransmitted back to a ground station on Earth. The ground station processes it and sends it to another VSAT.
The process flow is: User → VSAT → Satellite → Ground Station → VSAT → User.
In Mesh topology, users’ VSATs communicate directly with each other via the satellite, eliminating the need for a ground station (VSAT → Satellite → VSAT).
Types of satellite communication (Satcom) services
Now, you might be thinking, why do we need this service in the first place? After all, our internet is working pretty well, especially since the launch of the 5G network.
What challenges does Satcom services overcome?
There are places like mountains, hills, and remote regions where building traditional internet infrastructure, such as underground fiber-optic cables, is extremely difficult or even impossible. Similarly, using terrestrial networks for internet on airplanes is not feasible. In such cases, satellite communication offers a practical and reliable solution. Satellites relay signals over long distances, overcoming challenges posed by tough terrains and remote locations.
This technology enables direct data transfer via satellites, avoiding the high costs and complexities of laying physical networks. With advancements like Low Earth Orbit (LEO) satellites and high-throughput satellites, bandwidth has improved significantly while staying affordable. Satellite communication is quick to set up, highly dependable for critical applications like ATMs and naval systems, and resilient to natural disasters. It also provides enhanced security through encrypted communication between VSAT terminals and satellites, making it harder to intercept or hack.
A quick comparison between internet services from Satcom and terrestrial:
Satcom Regulations in India
The Indian Government has laid the groundwork for the development of this burgeoning technology in India. If a company wants to start Satcom services in India they have to adhere with the following regulations.
Key licenses include
- SESG license: For setting up Earth Station Gateways for advanced satellites
- VSAT license: For providing VSAT services
- IFMC license: For inflight and maritime connectivity
- Other license: based on specific Satcom services like GMPCS (global mobile personal communication by satellites)
These license holders are required to pay one-time application/entry fees, annual license fees, a revenue share based on Adjusted Gross Revenue (AGR), and additional charges for spectrum and space segment usage.
Transponder Leasing Rules
In India, Satcom service providers must lease transponder capacity from Antrix Corporation, ISRO’s commercial arm, which prioritizes domestic satellite capacity. If domestic capacity is insufficient, foreign satellite capacity can be leased under valid agreements with Indian entities like NSIL or Antrix.
New Regulations Effective April 2025
Starting April 1, 2025, non-Indian satellite operators must secure fresh authorization from IN-SPACe (Indian National Space Promotion and Authorization Centre) in coordination with the Department of Telecommunications (DoT) to provide space-based communication services in India. Only IN-SPACe-authorized non-Indian satellites will be permitted to operate, ensuring stricter regulations aligned with India’s space policy objectives. Existing agreements will remain valid until March 31, 2025.
Growth drivers in the Satcom industry
Government Support and Industry Growth – Policies like the 2023 Telecom Act and Indian Space Policy are driving India’s Satcom growth by enabling private participation and simplifying spectrum allocation, aiming to boost India’s share in the global space economy.
Maritime and Aviation Connectivity – Rising demand for high-bandwidth Satcom solutions in maritime and aviation sectors is enhancing navigation, safety, and passenger connectivity.
Connecting Rural and Underserved Areas – Satcom offers a scalable solution to bridge connectivity gaps in remote areas, supporting socio-economic development, financial inclusion, and healthcare access.
Defence and Security Applications – Satcom is crucial for military communication, border surveillance, disaster response, and intelligence gathering in areas with limited infrastructure.
Disaster Recovery – During emergencies, Satcom provides resilient connectivity when terrestrial networks fail, aiding quick communication restoration and coordination.
Critical Business Applications – The need for secure, reliable connectivity in sectors like ATMs, banking, and oil exploration is driving demand for Satcom services.
Emerging satellites – In India, satellite communication has mostly relied on GEO satellites (Geostationary Earth Orbit satellites), which are far from the Earth’s surface. While they’ve been useful, they come with drawbacks like high latency, slower speeds, and limitations for modern applications. However, there’s growing interest in LEO (Low Earth Orbit) and MEO (Medium Earth Orbit) satellites. LEO services are expected to launch by FY25, offering faster speeds and lower latency. On top of that, High Throughput Satellites (HTS) are transforming connectivity in exciting ways.
Satellite communications services hold immense potential to revolutionize today’s networks and communication systems. However, the journey to widespread satellite connectivity comes with its own set of challenges, including complex regulations, licensing hurdles, and the hefty costs of transponders.
Existing Major Players
If you’re excited about the booming and transformative satellite communication industry, there are a couple companies to keep an eye on.
Nelco Ltd. – Nelco Limited, part of the Tata Group since 1940 and based in Navi Mumbai, is a leading provider of VSAT-based satellite communication services in India, catering to government and enterprise customers across industries. The company delivers customized satellite solutions for CUG networks, turnkey communication networks for large organizations (especially in the government and PSU sectors), and high-tech security and surveillance systems. Nelco serves diverse sectors, including banking (ATMs), oil & gas, renewable energy, inflight and maritime connectivity, telemedicine, mining, construction, and rural education, with a strong market presence in oil & gas and banking segments.
Bharti Airtel with Hughes Communications India (HCIPL) – HCIPL, a Satcom leader since 1992, holds 67% of India’s VSAT market and operates 200,000+ VSATs. Bharti Airtel owns a 33.33% stake in HCIPL and partners with it to deliver satellite broadband through LEO satellite services via One Web a world leading UK based satellite company.
New players about to enter
Jio Space Fiber – Reliance Jio’s entry on February 14, 2022, Jio Platforms Limited (JPL) partnered with Luxembourg-based SES to form Jio Space Technology Limited (JPL 51% : SES 49%). This joint venture aims to deliver affordable satellite broadband across India under the “JioSpaceFiber” brand, using SES satellites. With IN-SPACe approval secured and DoT clearance underway, Jio is setting up gateway infrastructure to begin commercial operations soon.
Starlink – Elon Musk’s Starlink has accepted key regulatory conditions set by the Indian government to secure a license for satellite broadband services. The company has agreed to comply with data localization and security requirements, including lawful interception access for intelligence agencies. With these steps, Starlink is moving closer to entering the Indian market.
Amazon’s Kuiper – Unlike Starlink, Amazon’s Kuiper has been slow in its licensing process as it is yet to launch its satellite constellation. While this delays its entry into India, Kuiper and Starlink are expected to disrupt the telecom market in the long term, especially in rural areas lacking traditional broadband infrastructure.
These developments highlight growing competition in India’s Satcom industry, with significant potential for transforming connectivity in underserved regions
Closing Thoughts
Satellite communication (Satcom) is a remarkable technology capable of connecting even the most remote areas where traditional terrestrial networks struggle. It enables communication for planes, submarines, and ships, which have historically faced connectivity challenges. With further advancements, Satcom could unlock new applications.
In India, the government is actively working to develop this sector, supported by increasing interest from private companies, both domestic and international. This growing collaboration could shape the future of satellite communication in the country in exciting ways.
Disclaimer: These insights are based on our observations and interpretations, which might not be complete or accurate. Bastion Research and its associates do not have any stake in companies mentioned. This newsletter is for educational purposes only and is not intended to provide any kind of investment advice. Please conduct your own research and consult your financial advisor before making any investment decisions based on the information shared in this newsletter.
😂Meme of the Week🤣
Follow us
If you are a diligent investor, you would not want to miss checking out our research platform, where we share insightful research on companies regularly. Gain access to our sample research by clicking on the button below.
