India's debate on Open Skies

(The Economic Times (India) via NewsEdge) The failed launch on July 11 of India's Geosynchronous Satellite Launch Vehicle (GSLV) from the Sriharikota Space Research Centre carrying the Insat 4C satellite - which was intended to provide fresh Indian-owned capacity for DTH and other services - has renewed calls for the Indian government to adopt an "Open Skies" policy that makes it easier for service providers to lease foreign-owned transponder capacity.

In the following passages, former TRAI member D P S Seth makes the case for liberalizing India's space sector, while former ISRO chair U R Rao maintains that the existing policy is better for the Department of Space and India's satellite customers.

Space sector should face competition

D P S Seth: The key issues to be considered are adequacy of supply to meet demand, reasonable and competitive pricing, access to technological advances to ensure ever better quality of service and lastly the implications of the policy on the economic and social fabric. Even under the prevalent situation of suppressed demand created by restrictive policies, which do not permit market to determine the costs, the demand outstrips the expected supplies ignoring the recent launch failure (which is a temporary setback).

There is a lack of competition in transponder space. We have seen what a salutary effect liberalization and competition have had in the telecom sector. In its recommendations on broadband services, TRAI in April 2004 had noted the claim of the VSAT services operators that VSAT services can save over 35% per kbps if foreign satellites are used. Even if we regard the source of information as biased, there can be no denying the fact that economies in service provisioning is the obvious fall out of competition.

Currently used technologies require larger receiving dishes compared to what is possible with several foreign satellites, for both VSAT and DTH services, and directly affect the consumer in terms of the cost and quality. Using smaller dishes can cause greater interference but this can be taken care of during the mandatory SACFA clearance.

The greatest gain in going in for a liberal transponder policy comes to the remote rural sector where other means such as optic fiber and copper cables are not feasible. Lowered costs under conditions of competitive supplies would help popularize internet in these areas besides help making available broadband services.

Various pilots have established that rural demand is less voice centric and more data centric - a situation where VSATs become a good choice. Adding entertainment will further the business case in these areas.

Security concerns are a factor one cannot lose sight of. However, if the hub station is located on our soil this concern can be adequately met. The space sector has earned enough laurels to move forward and face competition with confidence.

Current policy benefits both DoS and users

U R Rao: Currently, private service providers dealing with fixed satellite, broadcasting and internet services are required to apply to the Department of Space (DoS) for their requirement of space transponders, which is met from INSAT capacity. Where INSAT capacity is inadequate, DoS leases transponders from other satellites to meet the demand of all such users, till it is able to augment the indigenous satellite capacity.


Such an approach, in addition to enabling DoS to plan augmentation of INSAT capacity for optimal use of our space assets also ensures that foreign vendors do not manipulate space communication market to the detriment of the common man, the ultimate beneficiary.

In the wake of the recent failure of GSLV and the consequent non-availability of transponders to meet the immediate requirement of DTH and other service providers, several users are demanding that they be allowed to directly lease transponders from foreign satellites as a part of the open sky policy, instead of going through DoS, under the impression that it will be cheaper to do so.

Past experience shows that bulk lease of transponders by DoS by combining requirements of all service providers has a decided price advantage. In fact, the lower lease charge of DoS for its transponders was responsible for the reduction of lease charges by foreign vendors in the past.

Most importantly the present system ensures that space technology which has been built in the country with great care and sacrifice will continue to benefit the country and will not be subject the pushes and pulls of a non-level playing global space market. Even the most advanced countries have carefully protected their internal space market.

So long as DoS can meet the requirements of user community, on a competitive basis, both in terms of cost and quality, there is no valid reason for abandoning the present arrangement. The strategic importance of space technology, which is vital for the nation, requires that the indigenous capability is fully utilized to ensure healthy growth of our national space program.

c 2006 The Economic Times of India, Coleman & Co Ltd

c 2006 Dialog, a Thomson business. All rights reserved