Starlink, star bright first satcom tonight?

Airtel's deal with Starlink to sell its gear in India and incorporate services by Elon Musk's satellite communications company to expand its network coverage is a smart bet. Airtel partners Eutelsat OneWeb for satellite broadband, but the European competitor to Starlink uses a different satellite constellation that makes its services more expensive. Both services are way more expensive than terrestrial broadband services Airtel and competitor Reliance Jio offer in dense urban clusters. Yet, around 40% of Indians don't have internet access. The trick will be to pull down costs of satcom in the countryside.

One way out would be to allocate spectrum to satcom players instead of auctioning it, as is done for terrestrial networks. GoI has indicated its preference for this course, which Musk has pointed out is the global norm. But this has run into opposition from Jio that wants a level playing field between the alternative technologies. Starlink's profits are in question if the cost of placing its constellation of satellites is factored in. A price-sensitive market eager to bridge the digital divide, India will need some market intervention in satcom to make it domestically viable. Competition among satcom players is not yet intense enough to drive down prices. Jeff Bezos isn't pushing Kuiper, a rival service to Starlink, over delayed delivery of satellites.

Starlink's acceptability has improved after it disclosed to GoI it has no shareholders in India's neighbouring countries. Starlink's association with a local partner could enhance this as it is a good way to spread internet coverage in India. There is a market for satcom in remote areas among enterprises, institutions and administration. The Airtel connect could tap into this segment as soon as Starlink is cleared for providing services in the country. The former could leverage its urban networks to market satcom to consumers where terrestrial networks expansion is slow. Alongside, regulations being drawn up for satcom should settle the matter of spectrum allocation.