Satcom firms looks to tap $19 billion unserved broadband market in India – Technology News

As the government works on the guidelines of satellite Internet services including its pricing and spectrum, an analysis by Morgan Stanley suggests that the satellite communication (satcom) companies could have a $19 billion (about Rs 1.6 lakh crore) revenue opportunity per annum from the unserved broadband market.

Companies such as Jio, Bharti-backed Eutelsat OneWeb, Starlink, and Amazon’s Kuiper are in fray to offer satellite Internet services in the country.

According to Morgan Stanley, there are 298.7 million households and the fixed broadband penetration is only at 3% as of 2023. There are 290.4 million households, which are untapped with broadband and that can be a strong market opportunity for satellite operators to tap, according to analysts.

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Average revenue per user (Arpu) from broadband users is estimated at Rs 470 per month. The brokerage said while arriving at the potential revenue opportunity per annum, it took into consideration the potential unserved household market size, using existing broadband penetration rates and the existing price of broadband.

Satellite services are different from telcom services as the former are focussed on Internet broadband services largely in low-lying areas where telecom services are difficult to provide.

In a bid to tap into the rural areas, analysts see satellite operators collaborating with telecom operators to improve services and expand reach. In India too, the launch of satellite services is being held jointly with telcos. For example, Jio will provide the services with Luxembourg-based SES, whereas Eutelsat OneWeb is backed by Bharti group.

“We believe that developing telcos will be able to unlock their growth potential in rural areas through collaboration with LEO (low-earth orbit) satellites. We highlight six developing market telcos where broadband penetration remains relatively low,” Morgan Stanley said.

“However, we are also mindful of risk from increased competition as LEO satellite pricing improves,” the brokerage added.

Lately, the satellite players also urged the government for a provisional satellite spectrum to avoid any delay in launching the services. The government, however, is expected to wait for the recommendations by the Telecom Regulatory Authority of India (Trai) before it decides to go-ahead and allocate spectrum to the satellite companies, administratively, officials in the know said.

Industry executives say there is an opportunity cost attached and the delay in spectrum allotment is affecting the operators.

Notably, Trai is yet to issue a consultation paper on the subject. In August, Trai chairman Anil Lahoti said that it should take about a month’s time to issue the consultation paper.

The Telecom Act has cleared the way for allocation of spectrum for satellite communication services through the administrative route.