Airtel-Starlink Handshake: Pricing Will Be Key, Say JPMorgan, Citi

Bharti Airtel Ltd.'s tie-up with Elon Musk's Starlink will complement the telecom operator's existing services, and expand rural coverage but the main aspect to focus on is pricing, according to analysts who track the telecom space.

Expanding its coverage will enable Bharti Airtel to expand B2B connectivity and related offerings to enterprises and businesses in remote areas that are otherwise lacking in fibre and fixed wireless access (FWA) connectivity, Citi said in a note.

"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 or, by extension, to tower companies like Indus Towers," the note said.

Analysts at JPMorgan believe pricing will be a key in this partnership as this is likely to be positioned as a premium service, complementary to FWA and Airtel Fibre services largely for small business users.

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, license authorisations for both alliances are in the works and Airtel will pitch for administrative allocation of satellite spectrum, sources told NDTV Profit on the condition of anonymity.

Starlink is yet to receive regulatory approvals and spectrum to beam and operate its LEO satellite communication services in India.

In ASEAN markets, Starlink plans are priced at 100-180% premiums to fixed broadband plans at $45-100 for retail users and higher for business users.

"We expect these prices will target very select business or small business users for terrain that is difficult to serve via its terrestrial networks," JP Morgan said in a note.

• JP Morgan: Maintains 'Overweight' with a target price of Rs 1,970.

• Citi: Maintains 'buy' with a target price of Rs 1,920.

Shares of Bharti Airtel closed 1.93% higher at Rs 1,661.2 apiece on Tuesday, compared to a flat benchmark BSE Sensex.