In June, Starlink received the licence from In-SPACe to launch commercial satellite-based internet services. Starlink is the third such licence-holder, after Eutelsat’s OneWeb and Reliance Jio. A fourth applicant, Amazon’s Kuiper, is awaiting approval.

While this completes the three-year process of filing the paperwork for Elon Musk’s SpaceX, there could still be some delay before the services are rolled out. Moreover, pri­cing will be critical in determining uptake. SpaceX will need to acquire spectrum, set up infrastructure and demonstrate in trials that it complies with security rules.

The spectrum policy was sorted out with the decision that  spectrum would be assigned (at prices set by the government) rather than auctioned. But TRAI has only recently sent recommendations on satellite spectrum pricing, terms and conditions to the government for consideration. These will have to be accepted (or modified) before spectrum can be allocated. However, the trial spectrum required to test and verify systems will be granted to Starlink soon.

Satellite broadband services can work through inclement weather and in difficult terrain where terrestrial services are hard to set up. For example, Starlink operates in the mountainous kingdom of Bhutan. It could potentially cover nearly 40 per cent of India’s land area and the large underserved population that resides in those parts.

Starlink provides high speed, low-latency broadband internet using satellite constellations in low earth orbits (LEO). Its fleet of 7,000 LEO satellites support streaming, gaming and video calls. Other service providers use fewer satellites placed in higher orbits, meaning higher latency.

Despite differences in opinion over spectrum allocation, Starlink has pacts with both Reliance Jio and Bharti Airtel. Bharti Airtel may sell SpaceX’s Starlink services and equipment in India, though Bharti also has a stake in OneWeb.

Along with security clearances, charges could be a sticking point. TRAI has recommended that satellite service providers pay 4 per cent of their adjusted gross revenue as spectrum charges. This is steep, according to COAI. Moreover, satellite-based broadband internet services will have to pay an additional Rs 500 per subscriber every year in urban areas. Starlink will have to figure out viable tariff structures for the famously value-conscious Indians.

Satellite services entail high capital costs, licensing and spectrum charges, etc. In most regions, Starlink levies a one-time charge on users for equipment (user terminal dish, router, etc.) and a pay-as-you-go monthly charge. It offers discounted rates in countries such as Kenya, where it recognises that per capita incomes are low. It may need to do this in India, perhaps offering differentiated tariffs for businesses, institutions and households.

Starlink’s experience offers key insights for policymakers. India needs satellite broadband. It would provide an enormous boost to development by connecting difficult terrain and ensuring all citizens can participate in the Digital India vision. Starlink and other satellite service providers see a big potential market. But that market is low per capita. There will be a price point, or price points, at which the market will clear. The sooner satellite services start operating and the faster they can discover that sweet spot, the better.