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A fierce battle brews in India's satellite broadband arena as Elon Musk clashes with Mukesh Ambani over spectrum allocation methods, igniting a heated controversy.

A controversy is unfolding in India’s rapidly expanding satellite broadband market, with SpaceX chief Elon Musk reacting sharply to lobbying efforts by Reliance Industries, led by Mukesh Ambani. At the heart of the debate is India’s strategy for allocating satellite broadband spectrum, pitting Musk's Starlink and Ambani’s Reliance against each other over whether spectrum should be auctioned or administratively allotted.

A Battle Between Two Billionaires

Musk’s criticism came in response to a Reuters report suggesting that Ambani’s Reliance is lobbying for a change in India's regulatory approach to satellite spectrum. Reliance is pushing for an auction model, arguing that this would ensure fair competition, especially since foreign firms like Starlink could offer services that compete directly with traditional telecom companies. In contrast, Musk supports administrative allotment, which would align with global practices under the guidelines of the International Telecommunication Union (ITU).

On Monday, Musk posted on X (formerly Twitter) that any move to auction satellite spectrum would be "unprecedented." He pointed out that the ITU designates this spectrum as shared, meaning it should not be auctioned off. Musk’s Starlink, along with other satellite players such as Amazon’s Project Kuiper, backs a model where spectrum is allocated based on need rather than auctioned off.

Regulatory Debate Intensifies

Reliance, which dominates India’s telecom sector through its Jio network, contends that the Telecom Regulatory Authority of India (TRAI) must auction spectrum to ensure a level playing field. It argues that skipping an auction would unfairly favor new entrants, potentially allowing them to bypass traditional telecom rules. Ambani’s camp further claims that the TRAI’s previous conclusion to allocate spectrum without industry-wide consultations was flawed and should be revisited.

The Indian government, however, has indicated that it is following due process. A government source told Reuters that the TRAI is actively consulting stakeholders before making a final decision on how to assign spectrum for satellite services.

Market Potential and Stakes

India’s satellite broadband market is projected to grow by 36% annually, reaching $1.9 billion by 2030. Starlink is keen to establish a foothold in this market, having faced delays previously. Musk favors the allocation route, where the government assigns spectrum without competitive bidding, arguing that satellite spectrum is a limited natural resource that should be shared across companies to drive growth and innovation.

A Global Precedent or an Auction Stand-Off?

Musk’s remarks highlight the divide between India’s current telecom industry players and new entrants eyeing the country’s satellite broadband segment. While countries like the U.S. and several EU nations adopt administrative allocation for satellite spectrum, India’s telecom giants insist on auctions to prevent market distortions. Ambani’s Reliance has warned that if satellite providers are given spectrum without auctions, they could disrupt the telecom industry by offering competitive voice and data services.

The tension has cast a spotlight on the broader question of how spectrum, a valuable public resource, should be distributed. Advocates for administrative allocation argue it promotes efficient use of spectrum, ensuring equitable access. Auction proponents believe competitive bidding ensures transparency and fair market entry, preventing dominant players from cornering resources.

With the stakes high for both Starlink and Reliance, India’s decision on spectrum allocation will set a critical precedent. If the auction route is chosen, it could slow down new entrants like Starlink, while an administrative allocation could trigger backlash from existing telecom operators. As the regulatory debate unfolds, Musk's critique adds further pressure on Indian policymakers to strike a balance between innovation, competition, and fairness in the allocation of satellite broadband spectrum.