Elon Musk's Starlink To Benefit From India's Telecom Shakeup, Mukesh Ambani's Reliance Jio Faces A Setback

This story was first published on the Benzinga India portal.

The Indian government is shaking up its telecommunications sphere with a new draft bill that proposes a licensing framework for satellite internet spectrum, potentially sidestepping traditional auctions. This move is a key part of a wider initiative aimed at overhauling the country's telecommunications laws, some of which have been in place for over a century.

What Happened: Unveiled in the Indian Parliament on Monday, the draft bill heavily favors international companies such as Elon Musk's Starlink, Amazon's Project Kuiper, and OneWeb, which is backed by the UK government. These firms have consistently pushed for the licensing model, expressing concerns that traditional auctions could inflate costs and discourage investment.

This shift towards licensing is not good news for everyone. Asia's wealthiest individual, Mukesh Ambani, and his telecommunications behemoth, Reliance Jio, are likely to be negatively impacted. Reliance Jio has been a staunch advocate for the auction system, which mirrors the approach used for 5G spectrum distribution in India.

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The company argues that auctions ensure an equal playing field. This is particularly critical as foreign satellite service providers are set to offer voice and data services that directly compete with traditional telecom operators in India.

Consultancy firm Deloitte predicts a strong upward trajectory for India's satellite broadband service market. The market is projected to grow annually by 36%, reaching a value of $1.9 billion by 2030.

Additional clauses in the draft bill empower the Indian government to suspend or prohibit the use of telecom equipment from specific countries due to national security concerns. This underlines the increasing focus on protecting telecommunications infrastructure amid global security issues.

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