INDIA: Billionaires Elon Musk and Mukesh Ambani are both in a battle over India’s satellite internet. Satellite broadband provides internet access anywhere within the satellite’s coverage which makes it a good option for remote areas.
India announced recently that satellite spectrum for broadband would be given administratively rather than through auction. India said that this is in keeping with international norms.
According to a BBC report, satellite internet subscribers in India are expected to reach two million by 2025. Ambani’s Reliance Jio currently dominates the market and they have partnered with Luxembourg-based SES Astra, a leading satellite operator.
Musk’s Starlink, on the other hand, has 6,419 satellites in orbit and four million subscribers in 100 countries. Musk has been trying to launch these services in India since 2021.
Technology analyst at Counterpoint Research, Gareth Owen says that administrative allocation would ensure satellite spectrum is fairly distributed among qualified players, giving Starlink a chance to participate in the race.
However, Ambani says that an auction would result in fair competition, especially since there are no clear legal provisions in India on how satellite broadband services can be offered directly to people.
Musk posted on X that the spectrum “was long designated by the ITU as a shared spectrum for satellites“.
Elon Musk’s win on India satellite spectrum raises prospect of price war with Ambani https://t.co/e1Jjn8lsdI
— The Globe and Mail (@globeandmail) October 17, 2024
Reuters reported on Oct 14 that Mukesh Ambani was lobbying the government to reconsider its position to which Musk responded on X, stating, “I will call [Mr Ambani] and ask if it would not be too much trouble to allow Starlink to compete to provide internet services to the people of India.”
Owen suggests that the reason Ambani may be resisting the administrative pricing method is because he may want to outbid Musk in an auction to potentially exclude Starlink from the Indian market.
The chairman of Bharti Airtel, Sunil Mittal, is also supporting the auction route.
Mobile data in India is currently the cheapest globally at 12 cents per gigabyte.
Technology analyst Prasanto K. Roy says, “A price war [with Indian operators] is inevitable. Musk has deep pockets. There’s no reason why he cannot offer a year of free services in [some] places to gain a foothold in the domestic market.”.
However, it may not be easy as Starlink costs almost 10 times more than major Indian broadband providers.
Owen says that Musk could have a first-mover advantage, but “satellite markets are notoriously slow to develop.”
”Businesses will never switch completely to satellite unless there is no terrestrial option. Terrestrial networks will always be less expensive than satellite, except in thinly populated regions,” added Owen.