Starlink’s India deal: A Trojan Horse for Jio and Airtel or a masterstroke?

After years of trying to enter the Indian market, Elon Musk’s Starlink has managed to get a foot in the door by entering into unexpected partnerships with two competing telecom giants, Reliance Jio and Bharti Airtel, which could eventually reshape the country’s digital landscape.

But analysts say that the catalyst behind the latest alliance is India's Telecom Policy 2023 (The Telecommunications Act, 2023), which abandoned spectrum auctions in favour of administrative spectrum allocation for satellite services.

Also read: Airtel partners with SpaceX to provide Starlink's high-speed internet in India

Alliance aimed at high-speed internet

Here are the contours of the alliance with each partner: With Reliance Jio, the Starlink tie-up involves a distribution and integration partnership. The extensive retail network of Reliance Jio will distribute Starlink’s equipment and services, allowing Indian consumers to access Starlink’s satellite internet. Jio intends to merge Starlink’s satellite technology into its current broadband offerings to expand coverage in regions where traditional network infrastructure remains inadequate.

With Airtel, it has formed a partnership to distribute and provide complementary services alongside Starlink. Airtel will distribute Starlink’s equipment and services to both consumer and enterprise segments while focusing on rural and underserved regions. While Jio seeks to merge Starlink into its broadband framework, Airtel plans to use it as an additional service supporting its broadband system.

Both the collaborations aim to provide high-speed internet access to rural and remote areas through satellite technology yet each partnership displays distinct implementation methods and strategic frameworks.

Existing investments, partnerships

Airtel maintains a substantial investment position in Eutelsat OneWeb which functions as a competing satellite internet service provider. Airtel’s investment in Eutelsat OneWeb could shape how they implement Starlink services in their operations by targeting varying market segments or specific applications.

Through its partnership with SES Jio established its satellite internet service called JioSpaceFiber. Jio may need to modify Starlink's role within its satellite internet strategy due to this development.

Airtel could market Starlink as a high-end service or target enterprise customers because it already provides business-focused services.

The utilisation of Starlink by Jio could strengthen its ability to deliver internet services to rural regions while supporting its intensive campaign to advance digital access throughout India.

Their expansive retail networks will serve as distribution channels for Starlink equipment yet each company will adapt its retail approach according to its unique brand positioning and customer demographics.

May lead to future competition

But here is the catch: Starlink retains the option to establish its own operations in India, which could lead to future competition with Airtel and Jio.

According to news reports, the partnerships are said to have been formalised following a crucial February 2025 meeting between Prime Minister Narendra Modi and Elon Musk, with Donald Trump’s return to the White House apparently helping to accelerate the approval process.

But much before the meeting, the Government of India managed to tweak the contours of the spectrum allocation. In late 2023, the government adopted an administrative-based approach for satellite spectrum allocation rather than competitive auctions, aligning with standards set by the International Telecommunications Union (ITU). “Every country has to follow the ITU, which is very clear that spectrum in space should be assigned and not auctioned,” said Telecom Minister Jyotiraditya Scindia. This policy decision, supported by India’s new Telecom Act, fundamentally altered the competitive landscape, effectively undermining the earlier opposition from Jio and Airtel.

The government spokesperson pointed out that administrative allocation lowers entry barriers because it avoids the costly and competitive auction system, which would place substantial initial financial responsibilities on these developing businesses. This strategy advances the government’s declared objective to expand India’s global satellite revenue participation from 2 per cent to 10 per cent by 2033.

Also read: After Airtel, Jio joins hands with Musk's SpaceX to offer Starlink services in India

Can’t auction satellite spectrum: Govt

According to the Telecommunications Act of 2023, spectrum distribution can take place via auctions or through administrative allocation based on the intended use case. The initiation of spectrum auctions persisted post-implementation of the Act because of several reasons.

The Telecommunications Act 2023 introduces a Dual Allocation Framework for spectrum distribution. The Act creates two separate pathways for assigning spectrum rights. The Act specifies that the allocation of spectrum for terrestrial mobile services (the regular mobile service powered by towers on the ground rather than satellites in space) will proceed through auctions.

The First Schedule contains specific use cases that can receive spectrum through administrative allocation. These include satellite-based services (e.g., Starlink, OneWeb); national security/defence; disaster management; scientific research and public broadcasting.

The difference between these allocation methods serves as a crucial point because administrative allocation is restricted to the First Schedule entries whereas commercial mobile services are required to go through auctions as per Section 4(4) of the Act. The government has defended its stand stating that satellite spectrum cannot be auctioned because it is shared.

The core conflict

The confusion stems from how the satellite spectrum receives different treatment compared to the terrestrial spectrum.

Reliance Jio advocated for satellite spectrum auctions to create parity between satellite and terrestrial services yet this proposal was dismissed because satellite spectrum operates differently than mobile airwaves. Both Jio and Airtel also argued that the satellite spectrum broadband speeds and capacity rival terrestrial networks.

Cartelisation fears

Now that each of them has entered into separate collaborations with Starlink, either being forced to do so because of the new telecom policy or because of what they believe is strategic, it raises issues of cartelisation. EAS Sarma, former secretary to the Union government, has already raised a red flag about the new arrangement in his letter to Department of Telecom Secretary Neeraj Mittal, claiming that this could risk cartelisation which threatens the survival of other market competitors.

Also read: Vaishnaw welcomes Musk’s Starlink, says it’ll help remote railway projects

“I am surprised that DoT should go out of the way to accommodate Elon Musk's Starlink by allotting it strategic satellite spectrum, in outright violation of the Supreme Court's stipulation that it should be allotted only through a transparent auction,” Sarma wrote in his letter to Mittal. He also pointed out that Starlink is known to work closely with the US defence services, and this partnership will give it an undue strategic advantage in the Indian skies.

At the same time, analysts also argue that Jio and Airtel could have unintentionally created a future competitor by forming alliances with Starlink. Starlink has consistently approached other markets through direct consumer sales, and nothing prevents it from implementing this model in India after obtaining regulatory approvals. Once Starlink builds its distribution network and gains customers, it can abandon partnerships with Jio and Airtel to compete independently as an infrastructure-free company.

According to a telecom expert, the partnership serves as a short-term solution for Jio and Airtel while delivering a long-term strategic advantage for Starlink. “The Indian telecom leaders are giving market access to a company which ultimately doesn’t require their services,” he said.

Costly investment

Telecom operators paid a total of Rs 11,340.78 crore to acquire 141.4 MHz of radio waves across different bands during the terrestrial spectrum auction that closed in June 2024. Bharti Airtel secured the largest share of the spectrum sold at the auction. Reliance Jio, being the market's most extensive subscriber base, secured spectrum valued at Rs 973.62 crore during this auction. The third major telecom company, Vodafone Idea, acquired spectrum assets worth Rs 3,510.4 crore.

The numbers show how much telecom companies have committed financially to obtain spectrum licences. The auction in 2022 brought in Rs 1.5 lakh crore for the government, which marks a new high, surpassing the amounts raised in the latest auction. In 2011, the government raised Rs 67,719 crore from the auction of 15MHz spectrum dedicated to 3G mobile services. The spectrum sale designated for broadband wireless access services raised Rs 38,000 crore, and some operators aimed to use this spectrum for 4G technologies.

Pricing model

The broadband market in India remains largely under the control of Jio and Airtel, with a total market share of 81 per cent. Over recent years, these companies have constructed vast network infrastructures through multi-billion-dollar investments in fibre optics and 5G technology. Starlink presents a distinct approach using low-Earth orbit satellites to provide internet access globally without relying on physical infrastructure.

But what could go wrong for the alliance is that while Starlink offers revolutionary technology, its pricing model is inappropriate for India’s budget-conscious market. Most Indian consumers find the service unaffordable because it requires a hardware fee between ₹25,000 and ₹35,000 alongside monthly payments of ₹5,000 to ₹7,000. The average revenue each broadband user generates in India remains between ₹400 and ₹600.

This raises a key question: Who is Starlink targeting? The potential beneficiaries of satellite internet service in rural areas will struggle to pay the high costs associated with Starlink. People living in cities can access fibre broadband, which costs less and works better. Starlink will remain a niche service instead of becoming a disruptor without region-specific pricing.

How Jio and Airtel plan to set prices for Starlink services offered under their respective brands remains unclear. Both companies might risk damaging their broadband income streams by subsidising Starlink pricing to boost market competitiveness. At the same time, the partnership will not be commercially viable if they transfer high costs to consumers because adoption will stay low.

The partnerships also introduce regulatory complexities. The Indian government has raised concerns about foreign satellite operators delivering Internet services without proper control mechanisms. According to reports, the government requires Starlink to establish a local control centre for security compliance, which includes communication interception capabilities.

International tie-ups

Starlink's worldwide presence has triggered international political concerns. The US government allegedly forced Musk to manipulate Starlink’s access in Ukraine to achieve political goals. The imposition of similar external pressures on India could endanger the nation’s sovereign control.

Existing investments by Jio and Airtel in competing satellite ventures represent an overlooked risk. Airtel has invested significantly in Eutelsat OneWeb, and Jio has developed JioSpaceFiber with SES as its partner. The choice to align with Starlink over their satellite projects demonstrates that Jio and Airtel have lost faith in their satellite internet developments.

Also read: Elon Musk's Starlink 'a wolf in sheep's clothing', says thinktank

A significant market presence by Starlink in India could harm the progress of local satellite initiatives. Should Jio and Airtel be unable to incorporate Starlink into their service offerings successfully, they risk becoming followers of a technology they once rejected.

The structure of these agreements leads to the conclusion that they are unlikely to represent permanent commitments. Representatives from Jio and Airtel define their agreements with Starlink as preliminary arrangements that include possibilities for change. This unclear wording implies that Starlink might drop these partnerships after its requirements change.

Minimal bargaining power

Once Starlink achieves independent access to the market, telecom giants Jio and Airtel will hold minimal bargaining power. Starlink intends to operate independently by directly serving its customers once its user base grows enough to eliminate intermediaries.

Although Starlink’s expensive services limit widespread adoption, telecom companies may be compelled to lower prices to compete, which could weaken their financial outcomes.

The collaboration could evolve into a persistent crisis instead of a game-changing development for India’s telecom duopoly. Jio and Airtel could become competitors to Starlink if Starlink operates as an independent entity. The companies must determine whether they can make necessary adjustments before time runs out.

The upcoming years will reveal if this alliance is a crucial foothold or a strategic failure undermining its competitive edge.