Mukesh Ambani Faces New Challenge as Elon Musk’s Starlink Eyes India’s Broadband Market

Featured & Cover Mukesh Ambani Faces New Challenge as Elon Musk's Starlink Eyes India’s Broadband Market

Asia’s richest man, Mukesh Ambani, recently lost a battle over how India’s satellite spectrum would be awarded. The Indian government decided not to auction the spectrum, which could pose a bigger threat to Ambani’s Reliance Jio if Elon Musk’s Starlink launches in India. As both billionaires prepare for a potential price war, the stakes in India’s broadband market are higher than ever.

On Tuesday, India’s government announced that satellite broadband spectrum would be allocated administratively, rejecting the auction route favored by Ambani. This decision came shortly after Musk criticized the auction idea as “unprecedented.” Musk’s Starlink, a division of SpaceX with 6,400 satellites currently orbiting the Earth, offers low-latency broadband to around four million customers worldwide. The company has been interested in entering India, but regulatory obstacles have delayed its launch.

Ambani, who leads India’s largest telecom provider, Reliance Jio, has been pushing for what he calls a “balanced competitive landscape” since last year. His efforts have been aimed at keeping Musk out of the Indian market, as some industry analysts believe that holding an auction would have forced much larger investments, which might have discouraged foreign competition.

Reliance has spent $19 billion in airwave auctions over the years to maintain its dominance in the Indian telecom market. The company is now worried that Starlink’s entry into the market could result in Reliance losing broadband customers, and eventually even its data and voice customers, as technological advancements evolve. A source with direct knowledge of the situation explained that Reliance is deeply concerned about the risk of customer loss.

The government’s decision to allocate the spectrum without an auction is in line with global practices, officials argue. Although no specific timeline for when the allocation process will begin has been provided, Musk’s Starlink has already applied for the necessary permits to operate in India. Once Starlink enters the market, pricing is expected to become a major battleground between the two business giants.

While Ambani’s Reliance has partnered with SES Astra, a Luxembourg-based satellite company with 38 satellites, Starlink’s advantage lies in the thousands of operational satellites it already has in space. Tim Farrar, an analyst with U.S.-based TMF Associates, said, “Starlink can price aggressively because it doesn’t need to add more satellites.”

Reliance Jio has a history of disrupting the Indian telecom market by offering free data on its mobile plans to attract customers. However, Musk is also known for aggressive pricing strategies. In Kenya, Starlink’s service costs $10 per month, significantly lower than the $120 charged in the United States. This lower price led Kenya’s Safaricom to complain to local regulators, asking that companies like Starlink be required to partner with local mobile networks rather than operate independently.

In India, Reliance Jio offers fibre-based high-speed broadband at the same price point of $10 per month. The plan comes with a free router on long-term subscriptions, and Reliance holds about 30% of the wired broadband market in India. Starlink, meanwhile, is planning to introduce an unlimited internet data plan in India, initially targeting corporate clients, according to a source familiar with the company’s strategy.

Neither Reliance nor Starlink responded to requests for comment from Reuters on the matter.

India represents a massive potential market for both companies. With 42 million wired broadband users and 904 million telecom users across networks like 4G and 5G, it’s the world’s second-largest telecom market, after China. DataReportal estimates that India’s internet penetration was 52.4% as of early 2024, meaning a significant portion of the population remains offline. There are still 25,000 villages in India that do not have internet access, and even in some urban areas, fibre-based fast internet is not widely available.

Musk has previously indicated that Starlink could play an important role in bringing internet to underserved parts of India. Last year, he remarked that Starlink “can be incredibly helpful” in connecting remote Indian villages, and in 2022, Starlink’s former head in India had set a target of 200,000 customers within the first eight months of launching in the country.

In addition to providing broadband services, Starlink has also revealed plans to launch a constellation of hundreds of satellites worldwide, which would enable “direct to cell” voice and data services in the coming years. This could further heighten competition between Starlink and Reliance in the future.

However, some experts believe that the fears surrounding Musk’s potential disruption of the Indian telecom market might be overstated. Gareth Owen, associate director at Counterpoint Research, said that “terrestrial networks will always be less expensive, and businesses will never switch completely to satellite.”

While the competition has not yet materialized on the ground, the rivalry between Musk and Ambani is already becoming more public. This week, a Reuters report revealed that Ambani was once again lobbying the Indian government to auction satellite spectrum, arguing for a “level playing field” in the market. When a social media user questioned whether Ambani was afraid of Musk entering the Indian market, Musk responded with a quip on X (formerly Twitter). “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,” Musk joked.

As Starlink moves closer to launching its services in India, Ambani’s Reliance Jio could face its biggest competitive threat in years. The outcome of this impending showdown between two of the world’s most prominent billionaires will likely reshape the future of India’s broadband and telecom industries.

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