Two of the world’s richest men — Elon Musk and Mukesh Ambani — are locking horns over providing satellite internet services in India, as the world’s most populous nation courts greater investment from the SpaceX and Tesla chief.
Musk said on Tuesday he was eager to bring his Starlink satellite broadband to India, following a meeting with Indian Prime Minister Narendra Modi in the US.
What he didn’t talk about is how Starlink is at odds with Mukesh Ambani, Asia’s wealthiest man, who runs Indian telecom giant Reliance Jio.
The two billionaires have been locked in battle over the Indian government’s distribution of satellite broadband spectrum.
While Starlink is lobbying India to not auction the spectrum but just assign licences in line with a global trend, Reliance has called for an auction in a public submission to the government.
Starlink has argued that the spectrum is a natural resource that should be shared by companies. An auction may impose geographical restrictions that will raise costs, the company said in letters made public by the Indian government this month.
Meanwhile, Reliance says foreign satellite service providers could offer voice and data services and compete with traditional telecom players, and so there must be an auction to achieve a level playing field.
The Ambani-backed group will continue nudging the Indian government to auction satellite spectrum, and not agree to the demands of foreign companies, an industry source said.
Keeping foreign competition at bay in satellite broadband will be another shot in the arm for Ambani, whose Reliance Jio is already a market leader with 439 million telecom users. The company also accounts for 8 million wired broadband connections in the country, making up a 25% market share.
The stakes are high for Musk too. His push comes after a 2021 attempt to launch Starlink in India ran afoul of local regulators for taking bookings without a licence, and just as he is in talks with India to set up a Tesla factory.
In India’s public consultation on satellite spectrum, 48 out of 64 responses from companies, industry groups and others favoured licensing, while only 12 voted for an auction, according to policy research and advocacy firm Koan Advisory. The rest remained neutral.
Starlink’s view on auctions is shared by Amazon’s satellite internet initiative, Project Kuiper, and the British government-backed OneWeb.
If India decides on holding an auction, OneWeb will find it difficult to do business in the country, said an industry source.
Starlink is waiting for clarity on India’s spectrum allocation before firming up its commercial strategy, another source said.
Foreign satellite internet firms are concerned an auction by India will raise the likelihood of other nations following suit. That will increase costs and investments, said one of the sources, an Indian adviser to a foreign company.
Level playing field
Tim Farrar, an analyst at US-based consultancy TMF Associates, said it would set a “bad precedent” for Starlink to pay a substantial auction amount in India. The company has received low-cost licences in many other countries.
“I’d expect Starlink to make high-profile free offers elsewhere in order to try and demonstrate what India could be missing out on,” he said.
Meanwhile, a source said, Reliance believes opening the floodgates to established foreign players like Starlink without an auction will allow them “runaway success” just like Amazon, which will hurt Indian firms and create an uneven playing field.
Ambani’s Reliance Retail has locked horns with Amazon, but lags the US rival in market share in the e-commerce space.
Deloitte says India’s satellite broadband service market will grow 36% a year to reach $1.9 billion by 2030.
Starlink says it is already authorised in 84 administrations around the world. The company also has 1.5 million active users of its low-latency broadband services. Amazon plans to launch its first set of satellites in 2024.
- Reuters, with additional editing by Vishakha Saxena