India’s satellite broadband market will be opened up to stiff competition with the entry of Starlink, the global service provider owned by Elon Musk. After a sharp debate, the government has decided that satellite spectrum for broadband will be allocated administratively and not via auction. This is despite Reliance Jio and Airtel arguing that the auction model should be adopted, which is unlike the global practice. There has been a war of words, with advocates on both sides lining up logical arguments, citing precedents and global best practices. Without rehashing that debate, which we have followed in tele.net, let us assume that the decision on administrative allocation is final. Therefore, spectrum pricing would be the next step on the agenda, before commercial satellite internet services are launched. TRAI’s discussion paper on the subject of pricing methodology and terms for allotment without auctions is now open for comments and counter-comments, till early November. ICRA estimates that satellite internet subscribers in India could hit 2 million by 2025, while Starlink, in earlier projections (circa 2021), had said that it was targeting reaching 200,000 subscribers within eight months of launch. Some estimates suggest that by 2030, India’s satellite broadband market could be worth nearly $2 billion, with a CAGR of 36 per cent. Roughly 40 per cent of India’s population is not connected to the Internet, due to a lack of services. There are large geographies where terrestrial services are hard to deliver due to low population densities and challenging terrain. Satellite broadband is the obvious solution to service this latent demand. The market could be competitive, with up to half a dozen players likely to be interested. Market leader Jio has partnered with Luxembourg’s SES Astra, a leading satellite operator, while Airtel’s offering could be presented via OneWeb (Airtel also has a tie up with Hughes). The big players may use different technologies. Starlink uses low Earth orbit satellites positioned between 160 km and 1,000 km from the Earth’s surface for lower latency service. SES operates medium Earth orbit satellites at higher altitudes, offering more cost-effective systems with higher latency. Starlink has 6,419 satellites in orbit and 4 million subscribers across 100 countries. Given the policy thrust towards Digital India, we cannot have 40 per cent of the population unserved. The internet is being leveraged to offer a rich array of digitised services including government and banking/financial services, and this 40 per cent is being left behind. The biggest issue with satellite services is their high cost, given a very price-conscious market. But it is conceivable that satellite pricing will become more competitive as penetration increases and technologies improve. There has even been talk of government subsidies. It could eventually become an alternative to terrestrial services instead of being an option only in places where terrestrial net is unavailable. A price war is also not impossible. In 2016, Jio offered free 4G services for six months, changing the dynamics of the market. Analysts have pointed out that Starlink could adopt a similar model of offering free or highly discounted services for an extended period to crack the satellite broadband market. Starlink has offered discounted services in Kenya and South Africa, for example. The implications of satellite broadband linking up unserved regions extends well beyond telecom. High internet penetration and cheap data have transformed the economic landscape wherever available. If satellite broadband opens up unserved regions, it could provide a huge boost to growth. The sooner services are launched, the better!