Spectrum Sprint: Musk-led Starlink starts groundwork in India

Starlink, the world’s largest satellite broadband company, has started the groundwork for building terrestrial infrastructure in India, and is in advanced talks with data centre operators and telcos, among others, as it prepares to launch services in a potentially high-growth market.

The Elon Musk-owned company is holding advanced discussions with data centre operators such as Sify Technologies, STT, Equinix and CtrlS Datacenters, internet exchange providers (IXP) like DE-CIX and Extreme, fibre infrastructure players including Microscan, and telecom companies Bharti Airtel, Reliance Jio and Tata Communications, people aware of the matter said.

These partnerships will help the US company build the terrestrial ecosystem needed to anchor satellite connectivity at scale. Analysts estimate the initial estimated capital expenditure at Rs 500 crore.

Letters of intent are expected to be sent to partners this month, the people said. The US company has secured all necessary clearances from Indian authorities and has also been given trial bandwidth, they said.

The companies named didn’t respond to queries.

Starlink will be vying with the likes of Bharti-backed Eutelsat OneWeb and Reliance Jio-SES JV for a piece of the commercial broadband market for space services in India, expected to grow rapidly in the coming years.

Preparing for Scale

Other companies such as Jeff Bezos-led Amazon Kuiper and Apple’s satcom partner Globalstar have also applied for permits to enter the market.

The country’s space economy is reckoned to have a potential to touch $44 billion by 2033, boosting its global share to 8% from 2% currently, according to regulator Indian National Space Promotion and Authorisation Centre (IN-SPACe).

Musk’s company has finalised 17 locations across the country for ground stations, necessary for enabling direct-to-cell satellite connectivity. These stations will connect Starlink’s low-earth orbit (LEO) satellites with terrestrial fibre and data networks to deliver high-speed broadband services.

“Even as LEO satellites beam connectivity directly to user terminals, Indian regulations mandate that all downlink traffic be stored and routed locally,” one person aware of the discussions told ET. “This makes ground stations, data centres, and internet exchanges central to the satcom ecosystem. Starlink’s early tie-ups with fibre and data centre providers show it is gearing for scale.”

The person said the terrestrial and satcom services ecosystem in India will be a partnership-led model as global and local companies compete aggressively for the same set of customers. For instance, the conversations with Airtel and Jio are moving beyond just distribution.

Besides the initial marketing pacts with Airtel and Jio, Starlink has already started signing other agreements to support its launch in India.

Last week, DE-CIX, which operates interconnection points, said it has partnered with Starlink.

“The integration will be crucial for maintaining high-speed throughputs especially for latency-sensitive applications like streaming, video conferencing, and online gaming,” said Sudhir Kunder, chief business officer, DE-CIX India, which operates 36 points of presence (PoPs) in five cities, handling data throughput of 11Tbps.

Extreme IXP confirmed that Starlink is already connected to its port in Mumbai.

A study by market research firm JM Financial showed that providing satellite internet pan-India will require a capital expenditure of Rs 8,000 crore to launch 700-750 LEO satellites for coverage with seven-eight years of useful life.

Excluding satellite launches, Rs 500 crore will be required for setting up 20 ground stations and an annual operating expenditure of Rs 350 crore to run a pan-India network, the brokerage house estimated.

The operating expenditure includes Rs 25 crore for the maintenance of ground stations, Rs 8 crore for recurring bandwidth and spectrum costs, Rs 5 crore for replenishment and Rs 25 crore for subsidising customer premise equipment (CPE) over five years.

The report also estimated that the current CPE cost of $400 can reduce by up to 50% if it is manufactured in India.

Another study by Jefferies estimated that Starlink could grow its global subscriber base from 4.6 million currently to 5.7 million by 2030. The company plans to expand its satellite constellation more than threefold to 22,000 from 7,000 in the same period.

“While this is meaningful for Starlink, it’s fairly small when compared to the size of the Indian fixed-line broadband market (which is 46 million at present and can grow to 90-100 million over the next few years),” Jefferies said in a report.