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Telecom: Incumbent partnership with Starlink reflects collaborative future

ICICIdirect Research 13 Mar 2025 DISCLAIMER

Both Airtel and Jio announced an agreement with SpaceX to bring Starlink’s high-speed internet services to their customers in India. We highlight that earlier, both incumbents were opposing administrative allocation of spectrum to Starlink in India

As per the agreements, Jio and Airtel will be offering Starlink equipment in their retail stores, Starlink services via network to business and other customers, in rural parts of India. Airtel will also explore how Starlink could help expand and enhance the Airtel network, as well as SpaceX’s ability to utilize and benefit from Airtel’s ground network infrastructure and other capabilities in India.

We await further details to gauge the scale of benefits to incumbents. In terms of pricing, Starlink has not yet announced its pricing for India. In 2022, the company estimated that the first-year cost (equipment+ services) could be ₹ 1.58 lakh, dropping to ₹ 1.15 lakh from the second year. In Kenya, the service costs $10 per month, while in the US, it is priced at $120 per month. In Bhutan, Starlink's residential plans range from ₹ 3,000 to ₹ 4,200 per month. These pricing, we note are much higher than ₹ 500-1000/ month for broadband in India

We also note that the agreement is subject to SpaceX receiving its own authorizations to sell Starlink in India. Nonetheless, we believe the partnership, if fructified, will enhance incumbents’ broadband expansion especially in the rural areas. Most importantly, this stance reflects that incumbents are focussing it as a collaborative partner rather than competitive risks. 

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