Bharti Airtel Share Price Jumps After Starlink Deal

Bharti Airtel Ltd.'s share price advanced over 3% during early trade on Wednesday, after the company announced a partnership with Elon Musk's satellite-based internet provider Starlink to tap unserved rural areas in India.

Airtel will use Starlink's low-earth orbit satellite connectivity, in addition to its existing partnership with 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.

With approximately 40 crore Indians lacking full-fledged internet connections, this partnership presents a significant market opportunity. However, the challenge lies in pricing, as 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.

In India, unlimited mobile/broadband plans are available for less than $3/$5 per month.

Given these pricing constraints, the potential market for this service may be limited to niche segments, such as ultra-high-net-worth individuals, defence, and enterprise customers. The partnership is sentimentally positive for Airtel, reducing the risk of competitive intensity, but its earnings impact is expected to be nil.

Analysts said the partnership will complement Airtel's existing services, and expand rural coverage, but the main aspect to focus on is pricing. JPMorgan expects pricing likely to be positioned as a premium service, complementary to fixed wireless access and Airtel Fibre services, largely for small business users.