Starlink and Rivals Gear Up for Satellite Internet Battle in India

A new era of satellite internet competition is unfolding in India, as Elon Musk‘s Starlink and Jeff Bezos‘s Project Kuiper prepare to launch. These players aim to provide high-speed internet across the country, particularly in areas where traditional networks are limited. This could reshape the digital landscape and challenge existing telecom giants.

Regulatory Approvals and Market Entry

Starlink has cleared a key regulatory hurdle and is closer to commencing operations in India, having agreed to all conditions in its authorization letter. The company previously secured a letter of intent from the Department of Telecommunications (DoT). This step is significant for its satellite internet services launch.

These licenses enable Starlink to set up ground stations and begin commercial services once spectrum and operational clearances are finalized. Compliance with India’s regulatory framework is mandatory for satellite players, ensuring adherence to national security, licensing, and user identification norms.

The license, however, does not provide any spectrum use rights, which necessitates a separate frequency assignment from the Wireless Planning and Coordination (WPC) Wing of DoT.

Cost Considerations and Market Dynamics

The affordability of Starlink services is a key factor, given India’s price-sensitive market. Residential plans in Bhutan cost around ₹3,000 per month for 100 Mbps speeds. That’s a premium compared to existing mobile broadband rates.

“Starlink is not at all a competition for mainstream mobile networks, partly due to pricing. With typical Indian consumers paying around ₹300 per month for fibre broadband, Starlink’s monthly charge of ₹3,000 is unaffordable for the mass market.”

—An industry expert, Anonymous

Moreover, the upfront cost of user terminals, including a satellite dish, represents a substantial expense for Indian consumers. Sid Tipnis, a partner at Deloitte India, highlighted affordability concerns, especially with the device’s upfront costs.

In contrast, the Tamil Nadu government plans to offer 100 Mbps internet for ₹200 per month by the end of 2025. According to a recent report, the average cost of mobile data in India is among the lowest globally, at approximately $0.13 per gigabyte (Cable.co.uk 2024).

Competition and Collaboration

India’s 4G and expanding 5G networks already offer extensive coverage, including rural areas, with Reliance Jio having over 494.47 million subscribers. Starlink will need tailored strategies to compete with these well-established terrestrial networks.

An essential challenge is the absence of a formalised satellite spectrum policy, which may delay commercial rollout. Starlink’s arrival in India involves an unexpected alliance with Reliance Jio and Bharti Airtel, the nation’s leading telecom providers. This collaboration enables Starlink to leverage their retail and distribution infrastructure without significant upfront investment.

Spectrum and Regulatory Landscape

The Indian government’s approach to satellite spectrum allocation will be critical for the success of internet providers. The Telecom Regulatory Authority of India (TRAI) initially supported a spectrum auction model, which would ensure fairness with terrestrial network providers.

However, the Telecommunications Act of 2023 permits administrative allocation of satellite spectrum, allowing Starlink swift market entry by utilizing telecom giants’ sales networks. The final spectrum pricing and licensing terms are pending, with ongoing consultations influencing the regulatory environment. The decision on spectrum allocation could influence satellite internet policies worldwide.

“Ideally, it should be a level playing field. All service providers, terrestrial or satellite, should meet the same obligations,”

—An industry expert, Anonymous

Tipnis also noted concerns from telcos who paid for spectrum through auctions, expecting long-term exclusivity, while satellite players may receive allocation without auctions.

Addressing the Digital Divide

Satellite connectivity could uniquely fill India’s rural internet access gaps. About 70% of rural households lack reliable internet access. The National Broadband Mission aims to provide affordable broadband across the country.

Bharti Enterprises already operates hundreds of satellites and offers services in multiple countries. Its satellite internet aims to deliver high-speed connectivity in underserved areas. However, it awaits government approval for satellite spectrum allocation.

Furthermore, Fixed Wireless Access (FWA) services using 5G, like JioAirFiber and Airtel Xstream, are expanding rapidly, offering fibre-like speeds without cable costs, and are competing with satellite internet in semi-urban and rural markets.

Starlink’s long-term success could rely on direct-to-cell services, currently in beta elsewhere. These services would enable communication directly with mobile phones, contingent on regulatory approvals, ground station setups, and collaborations with local telecom operators.