Jio Platforms Limited (JPL), the parent of India’s largest telecom operator Reliance Jio, said satellite broadband services were unlikely to gain significant scale in India’s connected and affordable market, even as it flagged the emergence of more competitive satellite broadband services as a potential disruptor in digital connectivity and one of the key risks to its business.
JPL said it was developing satellite constellation-based connectivity solutions, would seek satellite spectrum under the administrative allocation framework and may enter into strategic partnerships for the same, according to its red herring prospectus (RHP) filed with the Securities and Exchange Board of India (Sebi) on Thursday.
“We are evaluating the development of indigenous satellite constellation network and ground station infrastructure to provide satellite connectivity especially for remote areas. We are also evaluating partnerships with leading global constellation providers to accelerate service availability,” it said.
JPL said satellite-based connectivity was unlikely to scale significantly in India’s current connectivity landscape because of the rapid expansion of fixed wireless access (FWA), which offers fibre-like performance with relatively low installation and usage costs for consumers.
It said satellite services were also unlikely to compete effectively on pricing.
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“Satellite technology is not likely to be able to compete with FWA on pricing (especially with UBR-based FWA which is even cheaper than 5G FWA). For example, Starlink’s entry level fixed broadband plans in the USA are priced at ~₹4800 (~US55) per month, and in most African countries are priced at Rs 2500 - Rs 4500 (US28-50) per month. However, satellites could remain relevant for specialised use cases in remote or hard-to-reach locations where terrestrial roll-out is challenging,” it added.
JPL’s planned satellite broadband service, with a 1,600-strong low-earth orbit (LEO) satellite constellation, will be separate from Jio Satellite Communications Ltd, which has a joint venture with global satellite provider SES for medium-earth orbit satellite services and has already secured permissions.
Elon Musk’s Starlink and Bharti Group-backed Eutelsat OneWeb have also applied for permissions to begin commercial services in India. All three are awaiting security clearances from the government.
JPL cautioned that spectrum used for satellite services is being allocated administratively in India, unlike terrestrial spectrum, which is auctioned and locked to individual operators.
It said this could lower entry barriers into the Indian market and create direct competition with Jio’s fibre broadband, fixed wireless access and AirFiber services, particularly in enterprise and government connectivity and in rural and underserved areas where mobile connectivity is capital-intensive or difficult to deploy.
“This administrative allocation framework may lower entry economics for satellite-based broadband service providers, including operators of low earth orbit (LEO) and non-geostationary satellite orbit (NGSO) constellations, when compared to existing digital connectivity players, which are required to acquire spectrum through auctions,” the company said in the RHP.
Satellite spectrum, the company added, is generally a shared resource managed internationally by the International Telecommunication Union and is therefore not completely owned by any company.
“Accordingly, there can be no assurance that the competitive advantages our JioFiber, JioAirFiber, and UBR-based fixed wireless access services currently enjoy vis-à-vis this technology will continue in the future. If satellite solutions scale faster than expected, become more cost effective, or are adopted by competitors to address coverage gaps and enterprise or government use cases, our current offerings may become less competitive and require additional investments and increased costs,” the company cautioned.
While JPL said it was building its own satellite broadband constellation network, it also cautioned that there was no certainty over the timing or success of deployment.
The company said it “cannot assure you whether we would be able to deploy our satellite-based connectivity solutions in a timely manner, or at all, or in a manner which is competitive with alternative offerings in the market, or procure necessary regulatory approvals in time, or at all.”