Low-cost broadband services at under ₹840 per month will be introduced in India by Elon Musk’s Starlink and other satellite internet companies, with the goal of reaching 10 million subscribers. However, restrictions on satellite capacity, costly spectrum prices, and regulatory hurdles could impede expansion. JM Financial claims that even with assurances of affordability, satellite broadband in India is still seven to eighteen times more costly than traditional home fibre internet services.
According to a report by The Economic Times, Elon Musk’s Starlink and other international satellite communication companies intend to launch their services in India with promotional unlimited data plans costing under $10 (about Rs 840). With estimates aiming for up to 10 million consumers in the medium to long term, the move hopes to quickly integrate Indian users as businesses look to exploit economies of scale to offset high spectrum prices.
Deep-Pocketed Players Are Not Dissuaded by High Spectrum Charges
A minimum yearly price of Rs 3,500 per MHz of satellite spectrum, a 4% levy on adjusted gross revenue (AGR), and a Rs 500 monthly urban user charge are all part of the strict regulatory framework that the Telecom Regulatory Authority of India (TRAI) has proposed. Additionally, in order to offer services commercially, satcom providers will have to pay an 8% licence fee.
Analysts predict that these expenses won’t stop well-funded companies like Starlink from having a big impact in the Indian market, even though they make satellite spectrum more expensive than conventional terrestrial offerings.
The Economic Times quoted Ashwinder Sethi, a partner at the international TMT consulting firm Analysys Mason, as saying, “Satcom companies are expected to launch at low price point in India — likely sub-$10 — in order to achieve good take up and amortise their fixed costs (upfront capex incurred) over a larger customer base,” despite the high spectrum charges and licence fees.
Limits on Capacity Could Suppress User Growth
Nevertheless, Starlink’s goals are limited by technology. About 4 million people worldwide are served by its current fleet of 7,000 low-earth orbit (LEO) satellites, according to IIFL Research. The network may only be able to serve approximately 1.5 million Indian consumers by FY2030, even if the constellation grows to 18,000 satellites, because of restrictions on geographic satellite coverage.
IIFL Research cautioned that capacity limitations might make it difficult to scale up subscribers and reduce the impact of reduced price as a subscriber acquisition strategy.
According to the research, India’s share of satellite coverage at any given time would only be between 0.7 and 0.8 percent of the total, which would correspond to the country’s land area fraction worldwide.
Waiting on IN-SPACe Clearance
Notwithstanding the approval of satellite communication services by the Indian Department of Telecommunications (DoT), Starlink’s launch has been put on hold until it receives approval from IN-SPACe, the Indian National Space Promotion and Authorisation Centre. IN-SPACe, which was established in June 2020, is the Department of Space’s primary licensing and facilitation organisation for private space endeavours.
Satellite internet is more expensive than fibre.
According to JM Financial, satellite internet in India is still seven to eighteen times more expensive than traditional residential fibre broadband connections, even with assurances of affordability. The industry’s hope is on expanding operations to gradually lower per-user costs, particularly in rural and isolated areas where the development of terrestrial broadband is slower.
Jyotiraditya Scindia, India’s minister of civil aviation and space, had previously stated that, with the right regulatory backing, the nation is ready to provide the fastest satcom rollout in the world.
Earlier, Jyotiraditya Scindia, India’s minister of civil aviation and space, said that the nation is ready to deliver the fastest satcom rollout in the world, as long as regulatory support is in line.
Even though Starlink’s $10 internet plan could be a game-changer for India’s broadband market, there are still a number of obstacles to overcome. The ideal of ubiquitous high-speed satellite internet may take longer to come true than anticipated due to legislative obstacles and limited satellite bandwidth. However, the foundation being established today has the potential to influence India’s digital destiny in ways that go well beyond terrestrial infrastructure.