BUSINESS
This partnership will allow Jio and Airtel to distribute Starlink’s broadband services to rural and remote areas through their retail networks
Elon Musk’s SpaceX has joined hands with Reliance Jio and Bharti Airtel to bring its satellite internet service, Starlink, to India. This partnership will allow Jio and Airtel to distribute Starlink’s broadband services to rural and remote areas through their retail networks. However, the agreement appears to be limited to distribution, with Jio and Airtel earning a small commission.
Why Starlink might not be a threat to Jio and Airtel
According to JM Financial analysts, Starlink’s entry will not negatively impact Jio and Airtel for several reasons.
1. Higher Cost – Starlink’s satellite internet plans cost $10 to $500 per month, with an additional one-time hardware cost of $250-380. In comparison, Jio and Airtel’s home broadband plans start at just $5-7 per month, with premium plans costing up to $47 per month for 1 Gbps speeds and free OTT access.
2. Limited Speeds & Data Caps – Unlike Jio and Airtel, which offer unlimited data and higher speeds, Starlink has data caps and limited speeds, making it less attractive for cost-conscious Indian consumers.
3. Focus on Rural Areas – Starlink’s main target is remote areas where traditional broadband is not available. This actually supports Jio Fiber and Airtel AirFiber rather than competing with them.
4. No Threat to Mobile Networks – Starlink’s direct-to-cell satellite service currently only supports text messages. Voice, data, and IoT services are expected by 2025, but the technology has limitations and depends on telcos for 4G/LTE connectivity and SIM authentication.
5. Financial Impact is Small – The satellite internet segment contributes only 6-10% of Bharti and Jio’s projected earnings for FY30, meaning it does not pose a serious financial challenge to them.
According to reports, Starlink’s partnership with Jio and Airtel is beneficial but not disruptive. The Indian telecom giants will continue to dominate the broadband and mobile markets, while Starlink will help expand internet access in hard-to-reach locations.
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