India is poised to see a disruptive entry in its broadband landscape as satellite internet providers—including Elon Musk’s Starlink—gear up to offer unlimited data plans under $10 per month (roughly Rs 840), according to The Economic Times.

This introductory pricing strategy aims to quickly attract a significant number of users, with projections indicating potential reach of up to 10 million subscribers over the medium to long term. The strategy hinges on leveraging scale to absorb hefty spectrum-related expenditures.

High Fees Not a Deterrent for Deep-Pocketed Players

Despite the Telecom Regulatory Authority of India (TRAI) recommending a monthly user charge of Rs 500 for urban areas, which renders satellite spectrum more costly than traditional terrestrial networks, experts suggest that companies like Starlink are unlikely to be dissuaded by the financial demands. These operators are anticipated to focus on volume-driven models, with the belief that economies of scale will compensate for high upfront costs.

“Despite the high spectrum charges and license fees, satcom companies are expected to launch at low price point in India — likely sub-$10 — so as to achieve good take up and amortise their fixed costs (upfront capex incurred) over a larger customer base," said Ashwinder Sethi, partner at consulting firm Analysys Mason.

The regulatory framework Trai has proposed includes a 4 per cent levy on adjusted gross revenue (AGR) and a minimum annual payment of Rs 3,500 per MHz for spectrum use. Additionally, operators must pay an 8 per cent licence fee to offer commercial satellite broadband. These proposals are pending final approval from the government.

Limited Capacity May Curb Rapid Growth

While the introductory price points appear appealing, analysts caution that the limited bandwidth of current satellite constellations may hinder growth. IIFL Research notes that Starlink, with around 7,000 satellites in operation, supports 4 million users globally. Even with an expanded fleet of 18,000 satellites by FY30, the capacity to serve Indian users may not exceed 1.5 million due to coverage 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,” IIFL Research stated. The firm also pointed out that Starlink has halted new subscriptions in parts of the US and Africa when network capacity reached its limit.

Moreover, IIFL’s projections indicate that only 0.7 per cent to 0.8 per cent of Starlink’s satellite capacity would be available to cover India at any given time, roughly matching India’s geographic share of global land mass.

In its current form, satellite broadband is significantly more expensive than standard home internet services in India. According to JM Financial, satellite internet costs range from seven to 18 times higher than traditional broadband offerings, suggesting that affordability may still be an issue for widespread adoption.

Awaiting Final Regulatory Clearance

Although Starlink has secured initial approval from the Department of Telecommunications, the company is still waiting for final clearance from IN-SPACe—the Indian National Space Promotion and Authorisation Centre. Competitors like Eutelsat OneWeb and Jio Satellite Communications, who obtained their licences in 2021 and 2022, respectively, experienced delays of nearly two years before receiving IN-SPACe's green light.

IN-SPACe, a body under the Department of Space formed in June 2020, serves as a single-window agency to facilitate the participation of private players in India’s space sector. Its responsibilities include regulatory oversight, promoting non-governmental space activities, and coordinating infrastructure usage.