Recently it was reported that the DoT has made reference to the TRAI for recommending the modalities for auctioning satellite spectrum. These include airwaves in both Ka and Ku bands. The purpose of this note is to evaluate the valuation challenges that the TRAI will face while making its recommendations and what solutions it can propose to overcome them.
Satellite Revenues
In order to understand the valuation problems, we need to first lay out a model for predicting the cash flows emanating from the satellite services in India. One such model is reproduced in the figure below.
