Starlink's internet services in India could cost less than ₹850/month
What's the story
Leading satellite communication providers, including Elon Musk's Starlink, are looking to launch their services in India.
These services will be offered at a competitive price of under $10 (roughly ₹850) per month for unlimited data plans, The Economic Times reported.
The move comes as part of their promotional campaign to lure as many as 10 million users in the mid-to-long term.
The idea is to offset high spectrum costs through economies of scale.
Regulatory changes
TRAI's additional charge for satellite communication providers
The Telecom Regulatory Authority of India (TRAI) proposed an additional urban user charge of ₹500/month, making satellite communication spectrum costlier than terrestrial services.
However, analysts believe this won't stop financially robust companies like Starlink from competing in India's urban centers.
Despite high spectrum charges and license fees, these companies are expected to launch at low price points in India.
Spectrum fees
Recommendations for satellite communication companies
TRAI has recommended satellite communication companies to pay 4% of their adjusted gross revenue (AGR) with a minimum annual charge of ₹3,500 per MHz spectrum block.
These companies will also have to pay an 8% license fee for commercial services.
However, these recommendations are yet to be approved by the government.
Market challenges
Capacity constraints may hinder Starlink's growth in India
Analysts have noted that the capacity constraints of satellite constellations could be an obstacle for Starlink's goal to capture market share in India.
Currently, with a satellite capacity of 7,000, Starlink has approximately four million global subscribers.
However, IIFL Research estimates that with increased capacity of 18,000 satellites, it would only be able to cater to 1.5 million subscribers in India by FY30.
Cost analysis
Pricing remains a hurdle for Starlink in India
Satellite communication broadband currently costs 7-18 times more than home broadband in India.
Globally, Starlink and other satellite communication providers offer satellite internet plans at $10-500 per month (excluding one-time hardware costs of $250-380).
This is way higher than Indian telecom companies' home broadband plans starting at $5-7/month, extending to $47, for speeds up to 1Gbps.