Elon Musk’s satellite internet service, Starlink, is trying to launch in India. However, the Starlink’s India entry has raised a set of complex geopolitical, technological, and economic questions for the telecommunications sector in the country. Recently, the Government of India decided to offer spectrum allocation via an administrative pathway instead of opting for an auction.
The decision came after Elon Musk raised objections over the auction format. The government’s decision was met with mixed reactions from local operators, with some expressing displeasure over it. The emergence of Starlink in India may have a transformative impact on connectivity, especially in remote and rural regions. However, there are concerns that it could disrupt the existing telco landscape of the country.
Furthermore, there are speculations that Starlink’s pricing may not be affordable to the majority of consumers. If this is the case, the initiative may be limited to a select group of people who can pay a higher price for internet in India. Currently, high-speed internet with a minimum speed of 100 Mbps is available for only Rs 600 excluding taxes in India. Anything higher may not attract consumers to Starlink unless no other connectivity option is available.
What is Starlink?
Starlink is a satellite internet constellation operated by SpaceX, a company owned by Elon Musk. Starlink is different from conventional broadband, which relies on underground cables and cell towers. Starlink uses low Earth orbit (LEO) satellites to provide high-speed internet directly from space. According to its website, each LEO satellite orbits closer to Earth, offering faster speeds and lower latency than traditional geostationary satellites used in earlier satellite broadband models. Starlink’s technology aims to serve hard-to-reach or underserved areas, potentially providing reliable internet on a remote island, a mountain, or even while travelling at high altitudes.
To access the internet using Starlink, consumers will need to buy a basic kit that includes a satellite dish and router. Once installed, the dish will connect to the Starlink satellite network and distribute the internet through the Wi-Fi router.
Impact on India’s existing internet services
Fundamentally, Starlink’s entry into the Indian telecom sector with its high-speed satellite internet has the potential to reshape the dynamics of internet services in the country. Major telecom providers, including Reliance Jio and Bharti Airtel, have heavily invested in 5G infrastructure and are pushing fixed wireless access (FWA) services across cities and towns. According to Indian telecom companies, satellite internet, which also provides broadband services, should be subject to the same spectrum allocation process as terrestrial broadband.
In the current system in India, terrestrial broadband providers pay substantial amounts in competitive auctions for spectrum rights. The expected cost would be significantly lower if Starlink receives spectrum allocation via an administrative route. Indian telecom sector players have raised concerns that Starlink may acquire spectrum at a lower cost, leading to lower service prices compared to current offerings, thereby raising fears of a non-level playing field.
Examples from African countries like Kenya should be considered in India’s context, where Starlink’s low-cost services pressured local telecom firms, sparking demands for foreign satellite providers to partner with local operators. Indian telecom leaders such as Sunil Mittal of Bharti Airtel and Mukesh Ambani of Reliance Jio have formed a rare alliance on this issue, both advocating for an auction-based approach to satellite spectrum allocation.
Notably, the economic stakes are very high for telecom companies, which have collectively paid over Rs 4.8 trillion for terrestrial spectrum over the past decade. These funds have helped extend 5G services nationwide. These operators contend that Starlink could threaten revenue, particularly in urban markets where Jio and Airtel see growth opportunities through FWA, powered by 5G.
A global satellite spectrum dilemma – Brazil and the ‘administrative’ allocation debate
It should be noted that the administrative allocation approach, particularly for shared spectrum over 7-8 GHz, is largely a standard worldwide practice. Several countries, including the United States, Mexico, and Brazil, have experimented with auctioning satellite spectrum. However, they found it difficult to price and implement an auction model for non-terrestrial allocations. Brazil’s experience sheds light on the risks of regulatory conflict in the satellite internet sector.
In Brazil, Musk’s Starlink project became embroiled in conflict with President Lula da Silva’s government regarding Starlink’s role in providing internet for remote regions within the Amazon, where the service was accused of facilitating illegal mining activities by its users. This controversy highlighted the potential socio-political and environmental consequences of high-reach satellite internet, underscoring the challenges of managing foreign-owned, high-capacity internet providers within national borders.
The competitive landscape – India’s need for Starlink or local innovation?
While it is essential to consider what Starlink has to offer and its potential impact on the Indian telecom industry, the crucial question remains: does India need Starlink, or can local providers bridge the connectivity gap? In recent years, the digital divide has significantly narrowed. Over 96% of India’s villages are already covered by 4G or 5G mobile broadband services, with the remaining unconnected areas targeted for coverage through public funding and state-led initiatives. This achievement reflects the role of India’s Universal Service Obligation (USO) fund and government efforts to bring mobile internet to even the remotest parts of the country.
However, as many industry experts have observed, India’s connectivity issue is no longer a matter of geographical reach but of affordability and digital literacy. While urban India races toward 5G adoption, rural regions lag in device access, digital literacy, and use cases, which arguably pose more significant barriers to internet penetration than coverage alone.
Despite the gaps within the telecom sector, domestic providers in India, led by Jio and Airtel, have already amassed over three million fixed wireless access (FWA) subscribers across nearly 1,700 cities, a number expected to grow to 85-100 million by 2030.
The road ahead – balancing innovation, competition, and sovereignty
The ability of Musk’s Starlink to service the vast and varied geography of India appears advantageous. However, the decision to use an administrative allocation method for spectrum raises broader questions about balancing foreign competition with national interests. India has specific security concerns over data sovereignty and network control, prompting mandates for local data termination and strict KYC regulations for Starlink users. The telecom ministry’s current guidelines stipulate that data from Starlink’s satellites over Indian airspace must terminate in India, not on foreign shores, to prevent potential security risks.
Notably, the Ministry of Home Affairs is vetting the security issues that have delayed the decision to grant in-principle approval for Starlink to start its operations in India. The final licensing decision is expected soon, but it has been in “expecting soon” mode for a couple of years now.
If Starlink is permitted to launch, Musk’s promise of a high-speed satellite network could offer connectivity solutions in under-served regions. However, pricing challenges remain. Historically, Starlink’s monthly subscription costs and equipment fees have been far higher than those of Jio and Airtel. Recent reductions in Starlink’s prices in other countries, such as Kenya, indicate Musk’s awareness of the need for affordability in emerging markets. Attention will be on Starlink’s pricing to see if Musk truly intends to serve the unserved and marginalised, or if the company will target those who can afford to pay a premium for a monthly Starlink subscription.
Conclusion
The potential entry of Starlink into the Indian telecom market could be a pivotal moment in the geopolitics of digital connectivity. On one hand, Indian telecom companies have raised concerns about Starlink’s entry, citing fairness in spectrum allocation. On the other, the government seems to lean towards global norms of administrative allocation, citing shared high-frequency bands as impractical for auction-based pricing.
In the coming months, it will be determined if Elon Musk-owned Starlink will be able to enter India under competitive terms, potentially redefining rural and urban internet landscapes and testing India’s resolve in navigating the geopolitics of tech infrastructure and data sovereignty.
