The race for satellite broadband in India: What are the opportunities and challenges?

By Aarthi Raghavan | November 16, 2021, 4.00pm SGT

India is today the world’s fastest growing digital economy and yet 70% of the country’s rural population does not have access to the internet. Since the launch of the Digital India initiative, nearly 178,000 villages have been connected with optical fiber. There are 250,000 more villages to be connected.[1] As of 2020, internet penetration in India stands at 50%.[2]

The Government of India launched the BharatNet project in 2011 which aimed to provide broadband internet to every village in India. The project was to be implemented in three phases. In the first phase 100,000-gram panchayats (village offices) were to be connected through underground optic fiber cable by December 2017. Phase two would see 250,000 village offices being connected using an optimal mix of underground fiber, fiber over power lines, radio and satellite media. While it was expected to be completed by March 2019, it has been delayed. The government ensured that states can also participate in this process to ensure better implementation. Wi-Fi hotspots were also planned in village offices as part of this phase to deliver last mile connectivity. And finally, in the last phase, extending between 2019 to 2023, fiber network between districts and blocks will be developed to provide a future-proof network.[3]

Given the current gap and the government’s ongoing efforts, the race for satellite broadband has really caught the eye of some trendsetters. Elon Musk’s Starlink, a subsidiary of his rocket company SpaceX, and OneWeb, a joint venture between Bharti Airtel and the British Government, are the leading contenders in the race to launch commercial satellite broadband services in India. Resource-wise, Starlink, which has deployed 1,700 satellites in the low-earth orbit, is well-poised to provide low-latency broadband internet services around the world, especially in remote areas where it is hard for broadband cables to reach. The company has recently registered a fully owned subsidiary in India and has already secured orders.[4]

However, cost is a major challenge here. Starlink may cost INR 7,300 per month (USD 99) and the Starlink kit will cost INR 37,000 (USD 499), both of which are not affordable for rural consumers. Moreover, satellite broadband is also affected by cloudy sky, which can interrupt services. In light of these challenges, Starlink is seeking collaboration with Indian telecom companies like Reliance Jio and Vodafone Idea and public sector projects like BharatNet and RailTel. It has also proposed to start with giving away 100 free devices to schools in Delhi and nearby rural areas as part of a pilot project and sought government approval for the same.[5] Hence, it seems like the company has clear ambitions and plans to launch the next generation of internet connectivity in India – especially targeting the largely untapped rural population.

Bharti Group’s OneWeb on the other hand has recently sealed a pact with the commercial arm of the Indian Space Research Organisation (ISRO) to launch satellites from the country starting 2022 and start offering commercial satellite internet services in the second half of 2022. So far, the company has successfully launched 322 satellites and aims to place 648 LEO satellites in the low earth orbit.[6] Other leading players in the race are Amazon and Reliance, and most of them have already held consultations with the Ministry of Telecommunications and the Department of Space.[7]

However, regulatory environment for satellite broadband remains unclear, especially with respect to the mode of spectrum and the licensing framework. The government is reportedly in the final stages of approving a new spacecom policy which will outline the role of Low Earth Orbit satellite systems in increasing internet coverage. This is likely to push satellite broadband as a viable alternative for connecting rural India to internet.[8] Recently, the Department of Telecommunications (DoT), the key implementation body for telecom infrastructure, has sought recommendations from the Telecom Regulatory Authority of India (TRAI), the government-funded advisory body, regarding the allocation of spectrum for space communications.[9] This indicates that companies like Starlink, OneWeb and others can expect to be allocated spectrum during the upcoming auction in 2022.[10]

However, the industry has disagreements with respect to how this spectrum should be allocated to players. For instance, while the Broadband India Forum (BIF), an association that represents Google, Hughes, etc., and Bharti Airtel have opposed conducting auctions, telecom firms like Reliance Jio and Vodafone Idea have supported them. The alternative would be that spectrum waves might be allocated administratively, which major satellite broadband service providers agree with.[11]

Lastly, it remains to be seen how a rural Indian citizen will afford the satellite broadband service, given the lack of awareness in many cases, high cost, and the lack of perceived need for it. Comparing the service with mobile internet penetration trends can be useful in this case. India has the cheapest mobile internet, highest per-person usage, and the second-largest number of internet users in the world. As a result, it is important to note that in 2019, the number of rural internet users crossed urban users for the first time.[12] This indicates that cost is a determining factor for the average rural citizen in making the choice for access. However, for satellite broadband to overcome this barrier, it is important that government policies encourage ongoing efforts of companies like Starlink and OneWeb, along with other innovative approaches by industry players aimed at reducing upfront costs. For now, the more the merrier seems to be playing out well for initial launch of the service early next year, and hopefully it will reach every household soon.

[1] BharatNet crosses halfway mark, links 1.2 lakh panchayats – The Economic Times (indiatimes.com)

[2] Forecast: India to reach 1bn Internet users by 2025 | (advanced-television.com)

[3] Bharat Net — Vikaspedia

[4] Elon Musk led SpaceX gets big broadband boost in India; set for face-off with Reliance Jio, Airtel, Vodafone Idea (hindustantimes.com)

[5] Starlink and OneWeb: Can satellite broadband bridge India’s digital divide? | Business Standard News (business-standard.com)

[6] Bharti Group’s OneWeb ties up with Isro to kick off India chapter | Business Standard News (business-standard.com)

[7] Elon Musk, Jeff Bezos set to offer broadband in India | India Business News – Times of India (indiatimes.com)

[8] Spacecom Policy Going to Make Satcom Sector Dynamic: Shivaji Chatterjee (telecomtalk.info)

[9] Satellite broadband: DoT seeks Trai recommendations on spectrum allocation (msn.com)

[10] Auction For 5G Spectrum Likely In April-May 2022: Ashwini Vaishnaw (moneycontrol.com)

[11] Satellite broadband: DoT seeks Trai recommendations on spectrum allocation (msn.com)

[12] Internet users in India: For the first time, India has more rural net users than urban | India Business News – Times of India (indiatimes.com)