Starlink Satellite Communications recently partnered with India’s two largest Telecom Service Providers (TSPs) — Reliance Jio and Bharti Airtel — which together control nearly 80 per cent of the mobile broadband subscriber base.
The move caught everyone by surprise, especially since just weeks earlier, both TSPs had strongly opposed Starlink’s entry into the Indian market without a spectrum auction.
While the Telecommunications Act of 2023 had permitted an administrative allocation of satellite spectrum, its pricing was yet to be decided by TRAI which issued a consultation paper: ‘Terms and Conditions for the Assignment of Spectrum for Certain Satellite-Based Commercial Communication Services.’
Both Jio and Airtel favoured spectrum auctions, insisting that satellite operators like Starlink should pay the costs paid by terrestrial providers, for a “level playing field.”
Can fill a gap
This was reinforced publicly in October 2024, at the India Mobile Congress (IMC), by Bharti Airtel’s founder and Chairman Sunil Mittal himself who urged for auctions and equal licensing fees. Satcom services could fill a gap in uncovered hilly terrains, remote areas, protected forest zones, rural communities, and stretches of coastline that remained “dark” or unconnected. But as the lines between satellite and terrestrial services are blurring it necessitates a differential pricing strategy for spectrum that serves mobile customers directly.
Despite these strong representations of the industry, both the administrative allocation and the distribution agreements are being seen as a win for Elon Musk.
In the blink of an eye, one of the world’s largest telecom markets was open for Starlink. Tens of thousands of distributors and online store fronts (built painstakingly over decades by both TSPs), would serve as sales, customer service and fulfilment centres. Without an upfront real estate investment, it would collaborate with its competitors from day one — and cannibalise some of their highly profitable customers.
But will it really be a cakewalk for Starlink?
In 1998, when mobile networks were still in their early days, several satellite service providers launched Low Earth Orbit (LEO) satellites globally. Iridium (backed by Motorola) and GlobalStar were the most prominent. But with high device costs and tariffs, their services could not compete with the rapidly expanding GSM mobile networks offering cheaper tariffs and low-cost devices.
Starlink, launched in 2019, has better prospects. Its biggest advantage being its tight vertical integration with SpaceX (its parent). From satellite and rocket manufacturing to launch sites and ground infrastructure and from service delivery to end-user terminals — it runs a closed ecosystem.
Almost 5 million subscribers use its services. Fifty per cent of them in the North American region covered by 6000+ satellites across the world.
But Starlink will face formidable odds in the Indian market. The mobile broadband networks (4G and 5G) have a robust coverage. According to TRAI’s Performance Indicators report for September 2024, the wireless internet and broadband market is dominated by Reliance Jio, which controls 49.98 per cent of the market with 463.78 million subscribers followed by Bharti Airtel (31.46 per cent market share) with 291.88 million.
Price sensitive
Rural coverage too is growing rapidly. Out of 478.78 million users, Jio has 206.06 million subscribers in rural areas. And of its total of 392.80 million users, Airtel has 186.79 million rural subscribers. The biggest hurdle will be the price sensitive market. Subscribers consume 25 GB of data/month at ₹10/GB.
The nearest reference for Starlink’s prices could be Bhutan, where it launched recently. It offers two types of residential tariffs approved by the Bhutan Information, Communications & Media Authority (BICMA) at fixed land-based locations. 100 Mbps downloads cost 3,000 BTN/month (this is approximately the same in rupee terms — ₹3,000/month). A higher speed plan costs 4,200 BTN/month. Both offer unlimited data. These translate to (approximate) $35/month — whereas Indian mobile broadband tariffs hover around $5 / month. Cost of end-user terminals at fixed locations would also be an issue. The flat dish that connects to its satellites require a one-time investment. In Bhutan it is priced at 17,000 BTN for a mini Starlink kit and 33,000 BTN for a Standard Kit (much higher for premium services).
Fixed location internet in areas with poor connectivity is probably the most imminent market for Starlink. Of the 43.64 million wired internet subscribers, Jio holds a 32.46 per cent market share with 14.16 million subscribers, followed by Airtel with 8.48 million subscribers. Fixed wireless access or FWA services, like JioAirFiber and Airtel Xstream are growing rapidly. Using 5G networks to provide fibre-like speeds without physical cables is cost-effective and profitable. According to Nokia’s latest MBiT report, the average 5G data traffic per user is at 40 GB/month — 25 per cent of this comes from 5G FWA. These users consume 12x more data vs. mobile data users.
There is an expectation that Starlink would launch its direct-to-cell services (that competes with 4G/5G mobiles). But it would have to collaborate with Indian TSPs. This service is under beta testing in the US, Australia and other markets with TSP partners like T-Mobile, Telstra and Optus.
Commercially, Starlink would still be hard-pressed to match Indian tariffs, despite an easy retail entry.
Its path to launch direct-to-mobile services would be trickier than Starlink may anticipate. For one, it would have to set up ground-stations, which is a mandatory requirement for terrestrial networks. Spectrum for uploading signals directly to satellites that act like terrestrial base stations, would have to be priced higher. A separate numbering plan may be required. Interconnect terms will have to be agreed upon with TSPs and law enforcement agencies.
In all likelihood, its initial target will be higher revenue, enterprise users — like maritime, railways, logistics companies with large fleets on highways with sparse coverage. Eventually, though, the market will be the final arbiter.
The writer is a telecom, IT and media industry professional specialising in regulation and policy
Published on April 7, 2025
