Satcom plans may come in at less than Rs 840 a month

Satellite communication providers such as Elon Musk’s Starlink may debut their services in India at less than $10 (about Rs840) per month for unlimited data plans under promotional schemes, said analysts. They added that these companies would seek to ramp up their user base to up to 10 million in the mid-to-long term to offset high spectrum costs through economies of scale.

The Telecom Regulatory Authority of India (TRAI) has recommended an additional per urban user charge of Rs500 per month, making satcom spectrum pricier than terrestrial services. This is however unlikely to be a deterrent to moneyed Starlink’s ability to compete in India’s urban centres, the analysts noted.

“Despite the high spectrum charges and license fees, satcom companies are expected to launch at low price point in India - likely sub $10 - so as to achieve good takeup and amortise their fixed costs (upfront capex incurred) over a larger customer base,” said Ashwinder Sethi, partner at global TMT consulting firm Analysys Mason.

Starlink and parent SpaceX did not reply to ET’s requests for comment.

The telecom sector regulator has suggested satcom companies pay 4% of their adjusted gross revenue (AGR) with a minimum annual charge of Rs 3,500 per MHz spectrum block. Satcom companies will also have to pay an 8% licence fee for offering commercial services. The recommendations would need government approval.

Analysts meanwhile highlighted that capacity constraints of satellite constellations deployed could pose a challenge to Starlink’s ambition to gain market share in India, the world’s second largest telecom market after China.

With a current satellite capacity of 7,000, Starlink has about 4 million subscribers globally. Assuming it reaches a capacity of 18,000 satellites, it would be able to serve only 1.5 million subscribers in India by FY30, IIFL Research said in a report.

“Capacity constraints could prove to be a challenge in terms of subscriber ramp-up and blunt the effectiveness of low pricing as a tool for subscriber acquisition,” said IIFL Research in a report. It added that Starlink had suspended subscriber additions in certain regions in the US and Africa from time to time due to capacity challenges.

IIFL’s analysis assumes that the number of satellites covering India at a time would be just around 0.7-0.8% of the global satellite count—proportional to India’s area.

“Even if we assume 100,000 satellites for broadband services, only 700-800 satellites would be covering India at a time. This is a significantly lower number than the 800,000 telecom towers and 3 million BTS currently deployed in India,” it said.

Experts therefore say satellite services pose limited threat to terrestrial telecom networks.

At current prices, satcom broadband is 7-18 times pricier than home broadband, noted JM Financial.

Starlink and other satcom operators have globally priced satellite internet plans at $10-500 per month, excluding one-time cost for hardware of $250-380. This is 7-18 times more expensive than Indian telcos’ home broadband plans that start at $5-7 per month, extending to $47, offering up to 1 Gbps speeds, and access to all OTT apps.

“Hence, pricing remains a challenge for Starlink to become competitive in the price-conscious Indian market,” said JM Financial.

Other companies in the fray for India’s nascent satcom market include Bharti Group-backed Eutelsat OneWeb and Reliance Jio-SES, Globalstar. Eutelsat OneWeb and Jio-SES have secured all clearances, while Starlink recently got a letter of intent from the Department of Telecommunications for a satcom permit, and now needs clearance from the space regulator.