Battle Of Billionaires: Mukesh Ambani Opposes Elon Musk’s Plan To Bring Starlink To India
Reliance disagrees and has called for an auction in a public submission to the government, stating that foreign satellite service providers can provide voice and data services and compete with traditional telecom players, and thus an auction should be held to secure a achieve a level playing field
New Delhi: Elon Musk is eager to bring his Starlink satellite broadband to India, but the world’s richest man is meeting strong resistance from Asia’s richest Mukesh Ambani, who heads Indian telecom giant Reliance Jio.
After meeting with Indian Prime Minister Narendra Modi in the US on Tuesday, Musk said he would like to launch Starlink in India, which “could be incredibly useful” in remote villages that lack internet or high-speed services.
What he didn’t talk about is how Starlink is at odds with Ambani’s Reliance (RELI.NS) over government distribution of satellite broadband spectrum, which set the stage for a battle between two of the world’s richest men for satellite service in the world’s most populous nation.
Starlink is lobbying India not to auction the spectrum but only allocate licenses in line with a global trend, saying it is a natural resource that should be shared by companies. An auction may impose geographic restrictions that will increase costs, it said in company letters made public this month by the Indian government.
Reliance disagrees and has called for an auction in a public submission to the government, stating that foreign satellite service providers can provide voice and data services and compete with traditional telecom players, and thus an auction should be held to secure a achieve a level playing field.
In signs of growing rivalry, an industry source with direct knowledge said Reliance will continue to push the Indian government to auction satellite spectrum and will not agree to the demands of foreign companies.
The stakes are high for Musk. His push comes after a 2021 attempt to launch Starlink in India clashed with local regulators for taking unlicensed bookings, and just as he is in talks with India to set up a Tesla factory .
For Ambani, it will be a bull’s eye to keep foreign competition in satellite broadband at bay – its Reliance Jio already has 439 million telecom users, making it the market leader, and 8 million wired broadband connections, a market share of 25%.
Starlink’s view on auctions is shared by Amazon’s satellite internet initiative (AMZN.O), Project Kuiper, and UK government-backed OneWeb.
Amazon declined comment. India’s Telecom Regulatory Authority, OneWeb and Starlink parent company SpaceX did not respond.
When asked for comment, Reliance Reuters referred to its own submissions and those of the Starlink government.
AUCTION VS LICENSE
Of the 64 responses from companies, industry groups and others to India’s public consultation on satellite spectrum, 48 favored licensing, 12 voted for an auction and the rest were neutral, according to India’s Koan Advisory.
A second industry source said Reliance believes opening the floodgates to incumbent foreign players like Starlink without an auction will bring them “runaway success” like Amazon, hurting Indian companies and creating an uneven playing field.
Ambani’s Reliance Retail has locked horns with Amazon, but lags its US rival in market share in the e-commerce space.
Deloitte expects the market for satellite broadband services in India to grow at a 36% annual rate to $1.9 billion by 2030.
Starlink says it is already authorized in 84 administrations around the world and has 1.5 million active users of its low-latency broadband services. Amazon plans to launch its first set of satellites in 2024.
Foreign satellite internet companies are concerned that an auction by India will increase the likelihood that other countries will follow suit, driving up costs and investment, said one of the sources, an Indian adviser to a foreign company.
If India decides to hold an auction, OneWeb will find it difficult to do business in the country, an industry source said. Starlink is waiting for clarity on India’s spectrum allocation before firming up its commercial strategy, another source said.
Tim Farrar, an analyst with US-based consulting firm TMF Associates, said it would set a “bad precedent” for Starlink to pay a significant auction fee in India while acquiring cheap licenses in many other countries.
“I would expect Starlink to make high-profile free offers elsewhere to show what India could be missing,” he said.