NEW DELHI, Oct 17 (Reuters) - After losing a key battle with Elon Musk over how India's satellite spectrum is allocated, Asia's richest man Mukesh Ambani could face an even larger challenge if Musk's Starlink enters the Indian market, setting up a potential price war between the two titans.
On Tuesday, the Indian government announced that it will allocate spectrum for satellite broadband through an administrative process rather than an auction. This decision followed criticism from Musk, who opposed the auction method sought by Ambani, calling it "unprecedented."
Musk's Starlink, a subsidiary of SpaceX, has already expressed interest in launching services in India, although regulatory hurdles have slowed its progress. Starlink operates 6,400 satellites providing low-latency broadband to 4 million customers globally.
Ambani, who heads Reliance Jio, India’s largest telecom company, had pushed for a spectrum auction, arguing it would create a "balanced competitive landscape" that could keep Starlink at bay. Experts say that an auction would have required substantial investment, deterring foreign players like Musk.
Reliance, which has long dominated India’s telecom sector, is concerned about losing broadband customers to Starlink, especially after spending $19 billion on spectrum auctions. A source familiar with the matter noted that as technology evolves, Reliance could even risk losing data and voice customers.
While the Indian government has yet to announce a timeline for the spectrum allocation process, Starlink has already applied for the necessary permits. This move could mark the beginning of a new battle between Ambani and Musk over pricing.
Starlink, which already has thousands of satellites in orbit, can afford to price its services competitively without adding new infrastructure. Tim Farrar, a satellite industry analyst at TMF Associates, believes Starlink can offer aggressive pricing because of its existing satellite network.
Ambani is no stranger to competitive pricing strategies, having offered free mobile data in the past to capture market share. However, Musk has used similar tactics before, offering Starlink services in Kenya at $10 per month, compared to $120 in the U.S., and challenging local telecom operators.
In India, Reliance Jio offers a high-speed fibre-based broadband plan for $10 per month. Starlink plans to introduce unlimited data plans, initially targeting corporate clients, according to industry sources. With 42 million wired broadband users and 904 million telecom users, India is the second-largest telecom market globally. Yet, internet penetration is still at 52.4%, leaving significant potential for growth, particularly in rural areas where internet access is limited.
Musk has said Starlink could play a crucial role in connecting remote Indian villages, and the company has already outlined plans to launch hundreds of satellites to provide "direct to cell" voice and data services globally in the coming years.
Despite concerns from Reliance, some analysts believe that terrestrial networks will remain more cost-effective than satellite services. Gareth Owen, an associate director at Counterpoint, suggests that businesses are unlikely to fully switch to satellite solutions.
Even before the competition begins, the rivalry between Musk and Ambani is heating up. This week, a Reuters report revealed that Ambani is once again lobbying the Indian government to auction satellite spectrum for a "level playing field." When asked on social media if Ambani was afraid of Musk disrupting his telecom empire, Musk humorously responded, "I will call (Ambani) and ask if it would not be too much trouble to allow Starlink to compete to provide internet services to the people of India."