Starlink vs. Jio: The Struggle for Satellite Broadband in India

Elon Musk is keen on introducing his Starlink satellite internet service in India, however, he is encountering significant opposition from Mukesh Ambani, the wealthiest person in Asia, who operates the Indian telecommunications behemoth Reliance Jio.

After a meeting with Indian Prime Minister Narendra Modi in the US on Tuesday, Musk said he was interested in launching Starlink in India, which “could be incredibly useful” in remote villages without internet or high-speed services.

He didn’t talk about how Starlink conflicts with Ambani’s reliance on sharing government satellite broadband spectrum, setting the stage for a battle between the world’s two richest men over satellite services in the world’s most populous country.

Starlink is lobbying India not to auction the spectrum but only to issue licenses in line with the global trend, saying it is a natural resource that companies should share. The auction could impose geographic restrictions that would raise costs, the Indian government said in letters released this month.

Reliance disagrees and has called for an auction in a public submission to the government, saying that foreign satellite service providers could offer voice and data services and compete with traditional telecom operators, so an auction must be held to achieve a level playing field.

In a sign of intensifying competition, an industry source with direct knowledge said Reliance will continue to encourage the Indian government to auction satellite spectrum and will not accede to demands from foreign companies.

For Musk, the stakes are high. His push comes after an attempt to launch Starlink in India in 2021 ran afoul of local regulators for taking bookings without a license, and just as he is negotiating with India to set up a Tesla factory.

For Ambani, keeping foreign competition at bay in satellite broadband is a new opportunity — his Reliance Jio already has 439 million telecom users, making it the market leader, and 8 million wired broadband connections, a 25 percent market share.

Starlink’s take on the auctions shares Amazon’s satellite internet initiative with Project Kuiper and British government-backed OneWeb.

Amazon declined to comment. India’s telecom regulator, OneWeb and Starlink parent SpaceX did not respond.

Reached for comment, Reliance referred Reuters to its own comments and those made by the Starlink board.

AUCTIONING VS LICENSING

According to India’s Koan Advisory, of the 64 responses from companies, industry groups and others to India’s public consultation on satellite spectrum, 48 were in favor of licensing, 12 voted in favor of an auction and the rest were neutral.

Another industry source said Reliance believes that opening the floodgates to foreign incumbents like Starlink without an auction will allow them to have “hardened success” like Amazon, hurting Indian companies and creating an uneven playing field.

Ambanis Reliance Retail has locked horns with Amazon, but lags the US rival in terms of market share in the e-commerce space.

According to Deloitte, India’s satellite broadband service market will grow by 36 percent annually and reach a value of $1.9 billion by 2030.

Starlink says it is already authorized in 84 administrations around the world and has 1.5 million active users of its low-latency broadband services. Amazon plans to launch its first set of satellites in 2024.

Foreign satellite Internet companies are concerned that India’s auction will increase the likelihood that other countries will follow, increasing costs and investment, said one of the sources, an Indian adviser to a foreign company.

If India decides to hold an auction, it will be difficult for OneWeb to do business in the country, said an industry source. Starlink is awaiting clarity on spectrum allocation in India before firming up its commercial strategy, another source said.

Tim Farrar, an analyst at US-based consultancy TMF Associates, said it would set a “bad precedent” for Starlink to pay a substantial auction sum in India when it is acquiring cheap licenses in many other countries.

“I expect Starlink to do high-profile freebies elsewhere to try to show where India could be missing out,” he said.