Satellite communication providers such as Starlink are likely to launch their services in India at a promotional price point of less than USD 10 (approximately Rs 840) per month for unlimited data plans. The move is aimed at rapidly scaling the user base to as much as 10 million subscribers over the medium to long term, allowing providers to offset high capital and spectrum costs through economies of scale, ET reported, citing analysts.
Also Read: TRAI Says Satcom Services Complement and Do Not Compete With Terrestrial Networks
TRAI's Regulations for Satcom Services
Despite the Telecom Regulatory Authority of India (TRAI) recommending an additional Rs 500 per month charge per urban user, analysts believe deep-pocketed players like Starlink will not be deterred, the analysts noted, according to the report. The regulator has also proposed a 4 percent adjusted gross revenue (AGR) charge with a minimum annual spectrum fee of Rs 3,500 per MHz block, alongside an 8 percent licence fee for commercial satcom services. These recommendations await government approval.
Balancing High Costs with Economies of Scale
"Despite the high spectrum charges and licence fees, satcom companies are expected to launch at low price points—likely sub-USD10—so as to achieve good takeup and amortise their fixed costs (upfront capex incurred) over a larger customer base," Ashwinder Sethi, partner at global consulting firm Analysys Mason, was quoted as saying in the report.
Analysts caution, however, that satellite capacity constraints could pose a major challenge to Starlink's market expansion in India, the world’s second-largest telecom market. With a current satellite capacity of 7,000, Starlink has about 4 million subscribers globally. Assuming it reaches a capacity of 18,000 satellites, it would be able to serve only 1.5 million subscribers in India by FY30, IIFL Research reportedly said.
Also Read: Starlink Secures LoI for GMPCS Licence, Nears India Entry
Capacity Constraints May Limit Market Penetration
This is based on the assumption that just 0.7–0.8 percent of the global satellite fleet would cover Indian territory at any given time. The firm also pointed out that Starlink had suspended new user additions in certain regions of the US and Africa from time to time due to capacity limitations.
"Capacity constraints could prove to be a challenge in terms of subscriber ramp-up and blunt the effectiveness of low pricing as a tool for subscriber acquisition," said IIFL Research in the report.
JM Financial noted that at, current pricing levels, satellite broadband remains 7 to 18 times more expensive than traditional home broadband services, according to the report.
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