The unbundling of satellite network provisioning from service provisioning through 'SCN-as-a-Service' marks a structural shift in India's telecom regulation. Examine its implications for competition and rural connectivity.

In November 2026, TRAI recommended a new SCN Provider Authorisation under Section 3(1)(b), Telecommunications Act, 2023. SCN providers build satellite capacity and sell it to service providers as SCNaaS, but cannot serve end users [1]. Separating the network from the service opens the market to more players, though several bottlenecks remain.

Satellite capacity → SCN provider → (SCNaaS) → Authorised service provider → End user

Fig: Unbundled satellite value chain

Implications for competition

• Lower entry barrier: access providers can buy capacity without owning constellations. The 8% AGR fee has no minimum [1].
• Regulatory parity: SCNaaS charges are deductible from ApGR. This avoids double levy and treats integrated and unbundled models alike [1].
• Cost asymmetry: mobile operators pay auction prices. Satellite spectrum is an administrative exception [2], with a minimum charge of Rs 3,500/MHz/year [1]. DoT itself sought a level playing field with terrestrial services [3].
• Gatekeeping risk: IMT-based Direct-to-Device (D2D) needs consent from IMT channel holders in all 22 LSAs. A rival can therefore block a competitor's entry [1].
• Pricing uncertainty: the government accepted only some of TRAI's satellite spectrum recommendations, and some spectrum was assigned provisionally [4]. This weakens investment certainty.

Implications for rural connectivity

• Last-mile reach: D2D links ordinary handsets to satellites in remote, hilly and island areas [1].
• Disaster resilience: satellite links keep working when terrestrial networks fail [1].
• Two D2D routes: MSS-based (L/S bands) and IMT-based. Under ITU Radio Regulations Art. 4.4, the IMT route need not wait for WRC-27 [1].
• Handset gap: phones need MSS-band modules, and the government will only "encourage" makers to add them [1].
• Weak protection: IMT-based D2D runs on a non-interference, non-protection basis. It also needs an NFAP 2025 amendment before it can start [1].

SCNaaS can widen competition and extend coverage to unserved areas, but only if pricing, consent rules and handset readiness keep pace. DoT should settle the pending satellite spectrum terms and publish how the spectrum floor was calculated. It should also amend NFAP on a fixed timeline and incentivise MSS-ready handsets. Done well, unbundling can advance SDG 9.c (universal, affordable internet) and Digital India's goal of inclusive connectivity.