Big news! Elon Musk has finally achieved a major goal: Starlink is heading to India. But this isn’t just a simple expansion of his satellite internet service. The deal only became possible because Musk forged crucial partnerships with Mukesh Ambani and Sunil Mittal. These aren’t just any names; they are the titans of India’s telecom industry, the two most influential figures in the sector.

Their companies, Reliance Jio and Airtel, household names in India, are now set to be directly involved in distributing Starlink’s services across the nation. Musk has been pursuing this Indian entry for years, but the game changed after his recent meeting with Prime Minister Narendra Modi in Washington, D.C., just last month.

During their discussion, Musk really emphasized how vital it is to have global internet access, especially in India, which is now the world’s most populous country. Following that meeting, it seems the Indian government gave SpaceX the green light, allowing them to move forward with telecom deals that had previously been stalled and in limbo.

Interestingly, this development is about more than just getting people online. Musk’s growing influence in Washington also seems to be a factor. India and the U.S. have been in ongoing trade negotiations, but progress has been slow. Adding to the complexity, former President Donald Trump recently announced new reciprocal tariffs on India, effective April 2nd, further straining relations. However, the Starlink agreement is a clear signal that even if broader trade talks are stuck, Musk’s business ambitions in India are definitely moving ahead.

For Musk, this deal is a win on many fronts. He’s gaining access to a massive, mobile-first market without having to go head-to-head with powerful local telecom companies. Instead, by partnering with Jio and Airtel, they will essentially handle the rollout, transforming them from potential competitors into key allies. Ambani and Mittal, renowned for their commanding influence over India’s telecom landscape, now effectively hold the reins for how Starlink will grow and spread throughout the country.

India’s telecom giants already had satellite plans

However, there’s a twist in the tale. Jio and Airtel weren’t exactly idle, waiting for Starlink to arrive. Reliance Jio already had an existing partnership with SES, a satellite company based in Luxembourg, aimed at bringing satellite internet to India. Similarly, Airtel had teamed up with Eutelsat OneWeb, another satellite broadband provider. Now that Starlink has entered the picture, the big question is: what will happen to these pre-existing plans? The future for those ventures remains unclear for now.

Starlink’s key strength lies in its ability to deliver high-speed internet to rural and remote areas, places where traditional telecom infrastructure is often weak or non-existent. According to Neil Shah from Counterpoint Research, this partnership is strategically smart, enabling Jio and Airtel to expand their reach into areas their current networks simply don’t cover. Instead of the huge expense of building new terrestrial towers everywhere, they can now offer Starlink’s satellite service to customers in these underserved regions.

“Starlink should provide a great boost … particularly in rural and remote areas of India, where traditional telecom networks don’t do especially well,” said Pravin Krishna, a professor of international economics at Johns Hopkins University.

Yet, this deal also raises some interesting questions. Musk has always been very open about his long-term vision for satellite communication. If Starlink proves to be a hit in India, will Jio and Airtel continue to push forward with their own satellite internet projects that were already in motion? Or will they shift their focus to making Starlink the dominant force in the market? While these partnerships look good for now, the potential for long-term competition is definitely still on the horizon.

Regulatory hurdles and pricing problems

Even with these powerful partnerships secured, Starlink’s official entry isn’t quite a done deal yet. The company still needs to navigate the regulatory landscape and obtain a crucial communications license from the Indian government. The approval process is underway, but Starlink still needs to clear these final regulatory checkpoints. If the government decides to delay approval or impose new requirements, it could make Jio and Airtel rethink just how committed they want to be to this project.

Then there’s the issue of price. Starlink currently costs $110 per month in the U.S. That’s a hefty price tag, especially when you consider that Jio’s most affordable WiFi package costs less than that for an entire year in India. If Starlink aims for widespread adoption in India, these prices will absolutely have to come down significantly.

“While there is an opportunity to connect a lot of people to the internet, pricing will challenge Starlink’s ability to scale,” said Shah.

This is where government incentives and local subsidies might play a crucial role. If the Indian government actively supports broadband expansion, then lower-income areas could potentially receive financial assistance to make the service more accessible and affordable. And of course, Musk’s new billionaire partners could also step in to influence and shape the business model to address pricing concerns.

Technical limitations are another factor to consider. Starlink’s satellite network depends on a clear line-of-sight, which means things like bad weather and dense urban environments could lead to service disruptions. Analysts at Citi suggest that Starlink might be a better fit for rural areas rather than heavily populated cities, where existing telecom networks already have a strong foothold and infrastructure.

“We reckon satellite networks would be more suited for servicing remote rural areas where there are coverage gaps rather than high-density urban areas where satellites may not be able to match terrestrial networks in terms of capacity and coverage,” Citi analysts wrote.

Investors are paying attention, and Amazon is making moves

The venture capital scene in India is booming right now. In 2024, total investments in Indian startups reached a massive $13.7 billion, showing a huge 40% jump from the year before, according to Bain & Company. The number of deals also saw a significant increase, rising 45% to 1,270, compared to 880 in 2023. The consumer tech sector is attracting the lion’s share of investment, but industries like banking and retail are also experiencing impressive growth.

Adding to the dynamism in India, Amazon is also making a significant strategic shift. The e-commerce giant is reportedly in discussions with JPMorgan and Indian investment banks to list its Indian unit on the stock market. If this IPO happens, it could allow Amazon to actually hold inventory within India, rather than just operating as a marketplace connecting sellers and buyers. This capability would allow the company to really ramp up its operations and compete more directly with established Indian e-commerce players.

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Source: cryptopolitan.com