In India’s burgeoning satellite broadband market, two of the world’s wealthiest men, Elon Musk and Mukesh Ambani, are gearing up for fierce competition. This comes on the heels of a pivotal policy shift where the Indian government opted for an administrative allocation of satellite spectrum, bypassing the auction process.
While Ambani’s Reliance Jio and Musk’s Starlink aim to expand satellite internet across the vast Indian market, their approaches to spectrum allocation differ significantly, intensifying the rivalry.
Satellite broadband offers internet access in remote areas where traditional options, like DSL or cable, are limited. With over 500 million Indians still offline—primarily in rural areas—satellite broadband could bridge the digital divide, particularly given India’s fast internet adoption rate.
Reliance Jio, spearheaded by Ambani, dominates the Indian telecom market and has invested billions in spectrum auctions. The company has partnered with Luxembourg-based satellite operator SES Astra, whose medium-Earth orbit (MEO) satellites operate at higher altitudes than Musk’s low-Earth orbit (LEO) Starlink satellites.
MEO satellites can be more cost-effective, although LEO satellites, like those used by Starlink, generally provide faster, more localized service due to their proximity to Earth. Musk’s Starlink currently boasts a constellation of over 6,400 satellites and four million global subscribers, and his focus on LEO technology promises lower latency and higher speeds.
Both Ambani and another industry giant, Bharti Airtel’s Sunil Mittal, argue that auctioning satellite spectrum promotes fair competition and should be mandatory, especially as satellite services are now accessible to urban consumers as well as rural ones.
Starlink, however, supports administrative allocation, emphasizing that the International Telecommunication Union (ITU), a global regulatory body, already classifies satellite spectrum as shared, not exclusive, making administrative allocation the standard in most countries.
Musk’s stance was also fueled by India’s recent policy change, and he publicly questioned Ambani’s opposition on social media platform X (formerly Twitter), further spotlighting the spectrum debate.
Critics argue Ambani’s preference for auctions may be a strategic attempt to outbid Musk, potentially excluding Starlink from India. Technology analyst Gareth Owen from Counterpoint Research suggests that Ambani’s lobbying may have defensive motives, primarily to maintain dominance in India’s telecom market.
The concern is that as satellite technology advances, it could challenge the terrestrial-based services of large telecom providers like Jio and Airtel.
While the government maintains that administrative allocation ensures fairness and supports global norms, Ambani and Mittal argue it could open up the market to foreign players without requiring local investment, thus threatening existing Indian telecom providers.
Additionally, Mahesh Uppal, a telecom expert, notes that Indian operators might be concerned about Starlink’s ability to offer competitive prices or even free services to gain a foothold in the market, potentially triggering a price war.
Given that India’s mobile data costs are among the lowest globally, Starlink’s current higher service cost could make it challenging to gain significant traction without subsidies. EY-Parthenon notes that Starlink’s pricing is nearly ten times higher than the average Indian broadband service, although Musk’s financial leverage might allow for lower introductory rates to entice Indian customers.
Starlink has already experimented with price reductions in markets like Kenya and South Africa, suggesting it may adapt its pricing strategy for India if it enters.
Despite the anticipation surrounding satellite broadband, it could be years before it becomes mainstream. Although Starlink may have a first-mover advantage, satellite market growth is typically slow, partly due to high launch costs and infrastructure requirements, particularly for LEO satellites, which need many satellites for optimal coverage.
Moreover, terrestrial networks will likely remain the primary choice for businesses and urban consumers, as they tend to be cheaper and more reliable than satellite services, except in sparsely populated regions.
With over 40 per cent of India’s population still unconnected, the competition between Musk and Ambani has significant implications. A successful rollout of satellite broadband could substantially contribute to digital inclusion, supporting India’s Internet of Things (IoT) market and enhancing connectivity across underserved regions.
