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Battle of Billionaires: Elon Musk’s Starlink Set to Transform India’s Internet Landscape

by Srijita Ghosh
June 22, 2023
in News
Reading Time: 3 mins read
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Battle of Billionaires: Elon Musk’s Starlink Set to Transform India’s Internet Landscape
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The race for satellite broadband supremacy in India has intensified as Elon Musk’s Starlink and Mukesh Ambani’s Reliance Jio lock horns in a high-stakes battle. Elon Musk, the visionary billionaire behind SpaceX and Tesla, is determined to bring his Starlink satellite broadband to the Indian market, while Mukesh Ambani, Asia’s wealthiest man and the driving force behind Reliance Jio, stands firm in his resistance. This clash of titans has the potential to reshape India’s digital landscape and revolutionize internet connectivity across the country.

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Elon Musk’s enthusiasm for launching Starlink in India became evident following a meeting with Indian Prime Minister Narendra Modi in the United States. Musk expressed his eagerness to introduce Starlink’s groundbreaking technology to India, highlighting its immense potential in bridging the digital divide and providing reliable high-speed internet to remote villages and areas with limited connectivity. Starlink firmly believes that the spectrum allocation should involve the assignment of licenses rather than an auction, aligning with the global trend of sharing this valuable natural resource among companies. In a public submission to the Indian government, Starlink emphasized that an auction-based approach could impose geographical restrictions and raise costs, hindering the objective of widespread access to affordable broadband services.

However, Reliance Jio holds a contrasting viewpoint and has called for an auction in its own public submission to the government. Reliance argues that an auction would create a level playing field, allowing foreign satellite service providers to offer voice and data services while competing with traditional telecom players. This difference in perspective has sparked a deepening rivalry between the two telecom giants, with Reliance relentlessly urging the Indian government to proceed with the auctioning of satellite spectrum.

The stakes are undeniably high for Elon Musk and Starlink. In 2021, Starlink faced regulatory hurdles in India due to unauthorized bookings, highlighting the challenges and complexities of entering the Indian market. Simultaneously, Musk is engaged in discussions with Indian authorities regarding the establishment of a Tesla factory, underscoring the broader strategic significance of India for his ventures. On the other hand, for Mukesh Ambani, thwarting foreign competition in the satellite broadband sector would be a significant boost. Reliance Jio already boasts an enormous user base of 439 million telecom users and commands a 25% market share in wired broadband connections. Maintaining control over the satellite spectrum would solidify Reliance Jio’s dominance and safeguard the interests of traditional telecom players.

Starlink finds support in its stance on licensing from other global players, including Amazon’s satellite internet initiative, Project Kuiper, and the British government-backed OneWeb. This alignment of views underscores the importance of sharing spectrum resources among companies to maximize the reach and affordability of satellite broadband services. However, Amazon declined to comment on the matter, while responses from the Telecom Regulatory Authority of India, OneWeb, and Starlink’s parent company, SpaceX, remain pending.

India’s public consultation on satellite spectrum allocation revealed a diverse range of opinions. Of the 64 responses received from companies, industry groups, and other stakeholders, 48 favored licensing, while 12 advocated for an auction-based model. The remaining respondents remained neutral, reflecting the complexity of reaching a consensus on the best approach for spectrum allocation. Reliance Jio’s support for auctions stems from concerns about creating an uneven playing field and the potential for runaway success by foreign players, akin to the growth of Amazon. They argue that such a scenario could negatively impact Indian firms. Conversely, proponents of licensing, including Starlink, contend that auctions could increase costs and limit access to satellite broadband services.

Deloitte’s projections indicate robust growth in India’s satellite broadband service market, with an estimated annual increase of 36%, reaching a value of $1.9 billion by 2030. This promising market potential further fuels the competition between Starlink and Reliance Jio, as they vie for a significant share of this burgeoning sector. Starlink, with its already authorized operations in 84 administrations worldwide and a user base of 1.5 million for its low-latency broadband services, seeks clarity on India’s spectrum allocation before finalizing its commercial strategy. Amazon, too, has ambitious plans to launch its first set of satellites in 2024, highlighting the intense competition in the global satellite internet race.

Foreign satellite internet companies express concerns that an auction-based approach by India could set a precedent, leading other nations to follow suit. This, in turn, may escalate costs and investments, impacting the growth prospects of these companies. OneWeb, in particular, anticipates challenges in conducting business in India if an auction is enforced. Tim Farrar, an analyst at TMF Associates, warns that imposing substantial auction fees on Starlink could discourage further investment in India, considering the relatively low-cost licenses obtained by the company in various other countries. He suggests that Starlink may opt to make high-profile free offers elsewhere to showcase the potential benefits that India could miss out on.

 

The battle between Elon Musk’s Starlink and Mukesh Ambani’s Reliance Jio for dominance in India’s satellite broadband sector has reached a critical juncture. The differing perspectives on licensing versus auctions, the potential market impact, and the geopolitical implications make this rivalry an intriguing saga to follow. The ultimate outcome will determine the trajectory of internet connectivity in India, shaping the digital future of the nation. As the battle rages on, all eyes are on the Indian government as it navigates the complexities and implications of spectrum allocation, aiming to strike a delicate balance between fostering competition and ensuring widespread access to affordable broadband services.

Tags: Auctionbroadband services.CompetitionConnectivitydigital dividedigital futureElon MuskIndiaInternet connectivitylicensingMarket ShareMukesh AmbaniReliance Jiosatellite broadbandspectrum allocationStarlinktechnologytelecommunications
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Srijita Ghosh

I am a skilled content writer with a year+ of experience. My passion for writing, coupled with a degree in English Literature, allows me to create compelling articles, social media content, and product descriptions. I have a keen eye for detail, meet deadlines, and stay updated with the latest trends in the industry.

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