Starlink and OneWeb may find it very hard to attract customers in India

Global satellite internet service concept. Image by AlexLMX | Bigstockphoto

Elon Musk’s SpaceX Technologies’ Starlink and Bharti Group-backed OneWeb will find it hard to grab broadband users in India, and their satellite communication services will remain a niche offering. Additionally, satcom players can also face licensing and regulation related challenges which may lead to possible delays.

Both OneWeb and SpaceX Starlink are planning to launch broadband services in India by mid-2022. According to its website, Starlink has already listed several Indian locations where services will be available on a first-come-first-serve basis.

Brokerage firm CLSA, in its analysis note, India has the world’s lowest telco average revenue per user (ARPU) at $2 along with the lowest mobile data rates at $0.1 per GB, which will make it challenging for satellite communication players like OneWeb and SpaceX Starlink to target incremental broadband subscribers in the country.

Satellite-based broadband services are expected to remain significantly more expensive than wireless and wired broadband in India. The country is among the 30-odd countries globally that continue to limit access to satellite services.

However, CLSA said that enterprise could prove to be a solid business case for satellite broadband providers who can offer their services to provide the backbone for networks of IoT devices, smart factories and utilities.

India currently has 63% 4G penetration, which will go up in coming quarters as private telecom operators like Reliance Jio aggressively expands network coverage and rolls out offers for low-end users.

Notably, Bharti Airtel’s chief executive Gopal Vittal in last month’s earnings call, said that satellite technologies will always be a complement to existing wireless and wired technologies “as the spectrum available and backhaul required to deliver through satellite would never ever compare to terrestrial networks”. 

Kunal Vora, senior telecom analyst at BNP Paribas, separately said that satellite-based broadband wouldn’t be a threat for Indian telecom operators since mobile broadband is widely available even in rural markets.

“…and areas that don’t have 4G coverage could have affordability and distribution reach issues, which severely limits the scope of satellite broadband,” he was quoted as saying by the Economic Times separately. He added that the offering would remain “niche” and the biggest demand can be in delivering high-speed connectivity in remote areas that are still not within reach of wireless towers.

India’s telecom regulator, TRAI, recently sought views of the satellite industry stakeholders on ways to make satellite communications affordable and to attract investment into the space, which is seeing interest from SpaceX Technologies and OneWeb.

“Satellite communication can provide coverage to the remotest and inaccessible areas of a geographically widespread country like India. The uniqueness and benefit of satellite technology cannot be underestimated. It can play an important role in enhancing crucial nationwide communication infrastructure,” the regulator said in its consultation paper.

As per the TRAI, the cost of satellite-based services is on the higher side in the country, which is why end-users have not widely adopted it.

India’s Department of Telecommunications (DoT) already said that the DoT’s current licensing framework for satellite-based services has limitations concerning the proposed satellite-based low-bit-rate services.

Seeing possible challenges, SpaceX also wrote to the TRAI seeking changes in existing rules and regulations to allow satellite technology for broadband access in the country’s remote areas.

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