Starlink’s entry into India: What it means for the telecom landscape

Starlink’s partnership with Jio and Airtel could be a profitable opportunity for investors.

Elon Musk’s satellite communications company, Starlink, is finally making an entry into India, after eyeing the Indian market for years, and after months of behind-the-scenes struggles. However, Starlink isn’t breaking in alone. Instead, it's joining forces with India’s telecom giants, Reliance Jio and Bharti Airtel, two companies once seen as Starlink’s biggest obstacles.

Both Jio and Airtel have announced partnerships with Starlink to expand satellite-based internet services across India, pending government approval.

Here’s a comprehensive breakdown of what this means, the technology behind it, and the broader impact on the market.

Sudden change in the plot

For months, Starlink faced resistance from India's top telecom players, Reliance Jio and Bharti Airtel. Both companies dominate India's internet market and had appeared united in their efforts to block Starlink's entry. However, last week marked a significant shift when both giants announced partnerships with Starlink. Moreover, SpaceX and Starlink are expected to secure faster approvals from India's telecom department and Indian National Space Promotion and Authorization (IN-SPACe) following their partnerships with Jio Platforms and Bharti Airtel and this development could also ease the path for Amazon’s Kuiper to obtain similar clearances in India.

Reliance Jio announced on Tuesday that it would work with Starlink "to deliver reliable broadband services across the country, including in the most remote and rural regions." Hours earlier, Airtel made a similar announcement, celebrating a partnership with Starlink.

Gwynne Shotwell, President of SpaceX, expressed optimism about the collaboration, stating, "We look forward to receiving authorisation from the government of India to provide more people, organisations, and businesses with access to Starlink’s high-speed internet services."

Airtel's statement mirrored this optimism but added a note of caution, stressing that its partnership would remain "subject to SpaceX receiving its own authorisations." By aligning with India's largest telecom players, Starlink's odds of gaining regulatory approval have significantly improved.

Why is Starlink different?

Unlike traditional broadband services that rely on fibre-optic cables, DSL lines, or cellular towers, Starlink operates using low Earth orbit (LEO) satellites. These satellites are positioned much closer to Earth, typically between 200 km to 2,000 km, compared to traditional satellites that orbit at 35,000 km.

This low-altitude design has several key benefits:

• Lower Latency: Internet signals travel faster, improving response times.
• Improved Reliability: Signals are less prone to delays and interruptions.
• Broader Reach: Since LEO satellites don’t rely on physical infrastructure, they can deliver connectivity to remote areas that fibre or towers can’t reach.

What’s in it for India?

For India’s underserved regions, Starlink could be a game-changer. By teaming up with Jio and Airtel, Starlink could provide internet access to rural communities, remote villages, and mountainous regions — places where traditional telecom networks have struggled to reach.

"This partnership will deliver reliable broadband services across the country, including in the most remote and rural regions," Jio stated in its announcement.

Digital connectivity is a crucial driver of economic growth, and improved access could unlock new opportunities for education, healthcare, and businesses in these regions.

But there’s a catch…

While Starlink’s arrival looks promising, it's not without drawbacks:

• High Costs: Starlink’s satellite network is expensive to build and maintain, and those costs are often passed on to consumers. This could make its services less accessible to budget-conscious users.
• Weather Sensitivity: Heavy rain, storms, or obstructions can interfere with satellite signals, impacting reliability.
• Urban Limitations: In densely populated cities, where fibre networks are well-established, Starlink may struggle to compete on speed, stability, and cost.

Starlink’s original plan to enter India independently sparked concerns that it could challenge local telecom leaders. But by partnering with Jio and Airtel, Musk has turned potential rivals into allies.

This strategic move now puts pressure on Vodafone Idea and BSNL, which risk being left behind unless they quickly adapt or forge their own partnerships.

Data security and geopolitical concerns

Beyond business implications, some reports warn that Starlink’s presence raises security concerns. Since the network collects vast amounts of user data, critics worry about potential privacy risks.

Moreover, Musk’s recent decision to consider cutting Starlink services in Ukraine, where the network was vital for military communications, has amplified concerns about geopolitical influence. Should diplomatic tensions arise, some fear Starlink’s services in India could face similar disruption.

The investor's perspective

Starlink’s partnership with Jio and Airtel could be a profitable opportunity for investors. By expanding broadband access in rural India, both telecom giants can tap into new customer bases and boost their revenues. This could also improve their average revenue per user (ARPU) — an important financial measure in the telecom sector.

However, analysts warn that Starlink’s high pricing may limit its appeal. According to Bernstein Private Wealth Management, Starlink’s services are 9-175 percent more expensive than local broadband providers in Asia. On top of that, the upfront cost of equipment exceeds $180 (Rs 15,700), making it less suitable for average consumers and better suited for businesses and SMEs in remote areas.

Bank of America (BoFA) also cautions that Starlink’s limited satellite capacity may restrict its reach in India, where 5G and Fixed Wireless Access (FWA) networks are already well established.

Despite these concerns, Jio and Airtel’s partnerships with Starlink aim to improve connectivity in remote regions. Jio has positioned Starlink as a complementary service to its JioAirFiber and JioFiber offerings. Meanwhile, Citi Research believes these partnerships will expand B2B (business-to-business) and enterprise services in areas lacking fiber or FWA networks.

In Southeast Asia, Starlink’s plans range from $45-$100 (Rs 4,000-Rs 8,700), significantly higher than traditional broadband, reinforcing its role as a premium service rather than a mass-market solution.

Axis Capital believes Starlink’s high costs and pricey equipment make it unlikely to become a mainstream option in India, especially since FWA already addresses many connectivity challenges.