Having just suffered a humiliating loss in the battle with Elon Musk over how India’s satellite spectrum is awarded, Asia’s wealthiest man Mukesh Ambani could encounter a far bigger challenge if Musk’s Starlink launches services in India and starts a price war with his company. Indian government said on Tuesday it will allot spectrum for satellite broadband administratively and not through auction, just hours after Musk criticized the auction route being demanded by rival billionaire Ambani as “unprecedented”.

Musk’s Starlink, a division of SpaceX which has 6,400 active satellites orbiting earth to offer low-latency broadband to 4 million customers, has openly expressed interest in launching services in India, but its plans bumped into repeated regulatory roadblocks. Ambani, who runs India’s biggest telco, Reliance Jio, had been trying persistently since last year to seek a “balanced competitive landscape” and desired to keep Musk at bay, as experts say far more investment would have been required in case of spectrum auction and that would have deterred foreign players.

Reliance, which has ruled India’s telecom sector for years, is now worried that after spending $19 billion in airwave auctions it risks losing broadband customers to Musk’s Starlink, and potentially even data and voice clients later on as technology advances, a person with direct knowledge stated on Thursday.

The Indian government says its policy to allocate spectrum administratively to whoever applies for it is very much in line with global trends. GOI has not set a timeframe for when the process will begin but Starlink has already applied for required permits. Starlink’s entry into the Indian market would prepare a new battleground between the two billionaires: pricing.

Starlink has thousands of operational satellites, while Reliance has partnered with Luxembourg-based SES Astra, which according to non-profit CelesTrak has 38 satellites that Reliance plans to employ. “Starlink can price aggressively because it doesn’t need to add more satellites,” said Tim Farrar (a satellite industry analyst at U.S.-based TMF Associates). Ambani once offered data for free on his mobile plans, but Musk is no stranger to such strategies which can unsettle local players. In Kenya, Musk priced Starlink at $10 per month, while in United States at $120.

INDIA POTENTIAL

India is the world’s second-largest telecom market after China, with 42 million wired broadband internet users and 904 million telecom users on networks like 4G and 5G. Internet penetration in India stood at not very respectable 52.4% as of early 2024, according to DataReportal and there are still 25,000 villages that lack internet. And even in urban cities, many expanses don’t have fibre-based fast internet offerings. Musk opined last year Starlink “can be incredibly helpful” in far-flung Indian villages or places that lack high-speed services.