Can Mukesh Ambani's Jio withstand Airtel-Starlink's satellite internet challenge?

When Bharti Airtel and Elon Musk’s aerospace firm SpaceX inked the deal to introduce Starlink high-speed satellite internet in India, the focus shifted to the market leader, Reliance Jio. Mukesh Ambani and Sunil Bharti Mittal had previously fought together for the auctioning of satellite communication (satcom) spectrum rather than allocating it administratively, as lobbied by Starlink.

Elon Musk had objected to the auction route and even criticised Ambani’s stance. Along with other global companies like Amazon’s Project Kuiper, Starlink had advocated for the administrative allocation of spectrum, which aligns with global practices.

There is a fear in the industry that Starlink is capable of disrupting the telecom sector, as it operates low-earth orbit (LEO) mega satellite constellations that can rival the broadband speeds and capacity of terrestrial networks.

The telcos wanted satellite operators to be charged existing spectrum fees to avoid "market distortions." Paying high spectrum fees would restrict satellite internet providers from offering low tariffs.

However, the government has already announced that it will follow administrative spectrum allocation. Telecom Minister Jyotiraditya Scindia said, "Satellite spectrum across the world is allocated administratively. So, India is not doing anything different,” he said last year.

Ambani’s Jio urged the government to reconsider its decision, seeking a "level playing field" through auction. Jio argued that satellite spectrum should be allocated through the same competitive bidding process as terrestrial services. Jio also wrote to the Telecom Regulatory Authority of India (TRAI), requesting a re-evaluation of its consultation paper that favours administrative allocation, which, Jio claimed, would disrupt competition, particularly in urban and semi-urban markets.

However, the telcos supported allocating satellite spectrum administratively at lower costs for non-commercial applications like disaster management, mobile backhaul, and defence, as well as maritime and aviation requirements.

Jio had unveiled India's first satellite-based giga-fibre service, JioSpaceFiber, in 2023 in partnership with Luxembourg-based SES. The service for retail customers will be able to launch only after the government allocates the satellite spectrum. On the other hand, Bharti Airtel has been awaiting the government’s approval for spectrum allocation. It has established two ground stations in Gujarat and Tamil Nadu, complemented by a constellation of 635 satellites already operational worldwide.

The telcos were at loggerheads when Ambani’s firm launched its 4G business in 2016. It disrupted the telecom sector massively, leading to the shutdown of several telcos and the merger of Vodafone and Idea. Jio had also written to the Department of Telecommunications and the Telecom Regulatory Authority of India, alleging obstruction from Airtel and others against Jio’s launch. In 2019, Reliance Jio Infocomm opposed any move by the government to provide financial relief to Airtel and Vodafone Idea, which had been ordered to pay $7 billion in past dues.

Jio maintained its leadership in broadband services in December 2024 with 476.58 million subscribers, followed by Bharti Airtel (289.31 million) and Vodafone Idea (126.38 million).

Just when everyone thought Ambani and Mittal were united in their fight against Musk, Airtel’s deal with Starlink was revealed on Tuesday. Gopal Vittal, Managing Director and Vice Chairman of Bharti Airtel Ltd, said in the announcement, “Working with SpaceX to offer Starlink to Airtel customers in India is a significant milestone and further demonstrates our commitment to next-generation satellite connectivity.” Starlink will complement and enhance Airtel’s suite of products to ensure reliable and affordable broadband for Airtel’s Indian customers, he added.

Starlink’s LEO satellite technology will help connect remote areas that lack traditional infrastructure. It has thousands of satellites in operation, which will enhance connectivity for Airtel’s customers in India.