Entry of Starlink and Kuiper could churn India’s telecom sector

The possible entry of Elon Musk’s Starlink and Amazon’s Project Kuiper in India’s telecom sector, through an administrative allocation of satellite spectrum, could lead to an overhaul of the telecom industry in the country.

Leading players of India’s telecom industry, including Reliance Jio Infocomm, Bharti Airtel and Vodafone Idea, are insisting on the auction route to spectrum allocation, which, they insist, is a better way to realise prices.

However, telecom minister Jyotiraditya Scindia last month said the government would follow the global trend of allocating spectrum administratively.

A final decision on how spectrum will be allocated would depend on the suggestions made by Telecom Regulatory Authority of India (Trai).

Reliance, the most vocal advocate of spectrum auction, continues to press telecom sector regulator Trai to reconsider the plan for random allocation of spectrum through administrative means, insisting that it could be the most discriminative way of sharing a precious national resource.

Musk’s Starlink, like Amazon’s Kuiper, is interested in expanding ther respective networks to cover the entire globe, after its successful launch in Africa. 

Local players will now have to content with what little is being offered than purchase what they actually require, they point out.

On the other hand, representative of Starlink insist that the auction mechanism is exclusionary, which could leave out efficient players and that the better option is to share satellite spectrum.

Consumers are mostly worried about the service options these players offer and the prices they would have to pay for these. Some consumers also worry that without new entrants, they will be stuck with 

services that are either not available or are unreliable or too expensive.

Obviously, foreign investors who are interested in making the most out of the least investments won’t like India to auction spectrum.

Either way, consumers should not expect telecom tariffs to come down now. It will continue to rise, although service providers may come up with new services to satisfy consumer tastes.