DoT's special secretary N Sivasailam also flagged issues of costs and said ISRO should do more in order to take the charges at par with global experience.
"Here is the paradox, we produce the cheapest satellite but the costliest bandwidth," Mr Sivasailam said, adding that we require more transponders on satellites.
Mr Sivasailam said there is a "problem of domains" between the DoT and the ISRO that has impacted the roll-out of connectivity in the far flung areas for 20 years.
"The problem is of domains. We (DoT) don't want to leave our domain. ISRO doesn't want to leave its domain. It is a domain related problem...I do not see people coming together and negotiating this aspect out," he said.
Admitting that there is "politics" which "makes things difficult", Mr Sivasailam pitched for both the agencies getting over the problems for the benefit of all.
"It is time it stopped because it is hurting business development and ultimately people are not getting (benefited)," he said, speaking at the annual FICCI Frames.
On the critical issue of costs, he said it will cost around Rs 150 to serve one user with the current cost structure in the country whereas in the US, it costs $1 or Rs 65.
"If US is getting it for $1 for the same bandwidth for the life of the satellite, I should be getting it at the same rate. There is no reason why it should not happen in India. That is my refrain," he said.
Conceding that ISRO helps take satellite connectivity to 5,240 far flung locations in the country, including 4,300 in the North East, Mr Sivasailam elaborated that the cost of satellite, bandwidth and spectrum makes "operations unviable".
"If you have the volume of business, we should be able to provide at the rates internationally available and that is a matter of some concern for us. We have been working on it but not necessarily successful on this," he said, stressing that the industry will have to find solutions on this.
He said the DoT and ISRO also need to work together on this issue.
Speaking of self-regulation in OTT services (over the top), he said it cannot substitute regulation. "When you talk of regulator's way of looking at regulation, it lies on consumer side and that s where self-regulation in itself will fail when it comes to the consumer," he said.
Further, he stated that while it is particularly important in the telecom sector with issues of call drop and portability, it may not be applicable too much to the broadcasting sector.
Mr Sivasailam also spoke of the recommendation of Telecom Regulatory Authority of India on in-flight connectivity, which will be taken to the Telecom Commission "sooner than later" and in-flight connectivity "could be a reality sooner".
It can be noted that on January 20, the TRAI allowed airlines to offer in flight connectivity.
He said there are discussions within the department on whether to allow both voice and data on flights or restrict to voice connectivity alone. The new telecom policy will also be out "very soon", he said.