Non-exclusive. This is the word that forms the basis of Reliance-owned Jio Platforms and Bharti Airtel's recently announced deals with Elon Musk's Starlink. The Sunil Bharti Mittal and Mukesh Ambani companies have said that they will use Starlink satellites to extend their nationwide coverage and connect areas that previously had limited access.
"For the telecom industry, the addition of satellite technology should be no different from bringing new technologies to its customers," Sunil Bharti Mittal, chairman of Bharti Enterprises, said in a statement. "Just like 4G, 5G, and 6G in the future, we will now have one more technology in our mix, that is SAT-G."
The pacts follow Prime Minister Narendra Modi's February meeting with Elon Musk in Washington, where they discussed issues including space, mobility, technology and innovation.
The Deal With The Deals
Airtel will use Starlink's low-earth orbit satellite connectivity, in addition to its existing partnership with Starlink competitor Eutelsat OneWeb, to extend its nationwide coverage and connect areas that previously had limited access.
The final clearances and license authorisations for both alliances are in the works and Airtel will pitch for administrative allocation of satellite spectrum, people in the know told NDTV Profit on the condition of anonymity.
Jio, too, has a similar deal with SpaceX, where it will offer broadband services across India, including rural and remote regions. This will be on top of the firm's 2022 announcement of a joint venture company with Luxembourg-based SES for offering satellite-based broadband.
The Reliance-owned telecom company expects Starlink to complement JioAirFiber and JioFiber, by enhancing its speed and covering more challenging locations in a quick and affordable manner.
Both Jio and Airtel will offer Starlink equipment via their retail stores. "Jio and SpaceX are also evaluating other complementary areas of cooperation to leverage their respective infrastructure," a statement from Jio Platforms added.
Today, in India, approximately 40 crore people lack full-fledged internet connections. Added to this, the country's rock-bottom average revenue per user makes it difficult to justify the high costs of Starlink's services, which start at $50 per month in the US.
What's The Opportunity?
While the financials of the deals have not been disclosed, industry experts said that the quantum will depend on which market segment the partnerships target and pricings will be at a premium to Jio and Airtel's terrestrial services.
"We view the service as complementary to Bharti’s existing offerings, which should lift concerns of LEO satellite services presenting a major competitive threat to incumbent telcos," Analysts at Citi Research said in a note on Wednesday.
Starlink partners with telecom companies to offer direct to device connectivity and business communication on a reseller basis. The deals it has finalised with the Indian majors hints at expectations of a favourable outcome on the government front.
Musk's firm has been waiting for nearly three years to get approvals in India.
Through the deals with Airtel and Jio, Starlink will have a low-cost entry into India's retail stores, which will enable it to expand quickly once necessary approvals are in place, the abovementioned industry experts said.
Sector watchers also say that Vodafone Idea might look at a similar partnership in the near future to solidify their presence in the Sat-G space.
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