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Telecom: Incumbent partnership with Starlink reflects collaborative future


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.
Disclaimer – I ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is acting as a distributor to solicit bond related products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.
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