12 hours Ago
While collaborations between Elon Musk ’s SpaceX and Indian telcos Bharti Airtel and Jio concretised Starlink’s entry into the Indian market, analyst reports said the satcom service will struggle to compete with existing broadband providers on pricing. Beyond this regulatory hurdle of getting licenses, Bernstein, in a report, said that Starlink’s pricing may be too steep for a cost-conscious country like India. For example, while Jio and Airtel offer annual corporate internet tariff plans ranging from ₹10,898 to ₹15,146 for 100-200 Mbps, Starlink offers an annual plan of ₹2,15,600 for 50-200 Mbps.
“Based on current expectations, Starlink’s price is almost 10-14 times higher than India’s major broadband providers. The current price is very high for developing countries like India, especially for the target rural market. Unless the Indian government offers subsidies to LEO players, Starlink may struggle to compete with more affordable alternatives already available in the country,” said Bernstein.
In terms of Asian market, Starlink pricing is at a 9-175 per cent premium to local broadband operators, excluding the higher upfront costs for Starlink, said Bernstein. This can lead to scalability issues as the target market is largely the rural population. India particularly reports the lowest data costs in the world.
It may be noted, that when Starlink launched its services in developing countries in Africa, it lowered prices to $10 in Kenya, to $50 in Eswatini on a monthly basis. However, this is still nowhere as low as the monthly plans offered by Airtel/Jio to Indian users starting from $4.6-5.
Meanwhile, BoFA Global Research pointed out that while Starlink can offer speeds up to 200-250 Mbps, over time capacity could be an issue considering the limited number of satellites hovering around India. “This may limit the target home market in near-term. Unless pricing is clear, it is difficult to understand the unit economics for this business.
Currently we consider satellite broadband offering to be niche as we note 5G & FWA penetration is strong in India,” said the report. In February, Starlink entered into a similar partnership with T-Mobile in the US and offered a beta take-off that allows users to experience free satellite-to-mobile connectivity. Other telcos customers like Verizon and AT&T users can also experience the beta service that allows free text-messaging.
Going forward, the testing will include picture messaging, data services and voice calling. Once the service launches in July, it will be available for $20 per month per line, although the service will be included at no extra cost on T-Mobile’s—Go5G Next plan. Customers on other plans can add the service for $15 per month.
Under the partnerships, Airtel and Jio will provide Starlink equipment in their retail outlets and help with marketing and distribution. However, Starlink still has to get licenses from the government on its own to provide the internet access. It also faces other challenges like niche use-cases when entering the Indian market.
While it is not seen as a major threat to local telcos, it could still disrupt specific segments like enterprise connectivity, global roaming, and remote coverage. Overall, Starlink’s Direct-to-Cell service is expected to complement traditional telecom operators in the near term rather than fully replace them. Comments.
