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Elon Musk’s Starlink targets India as Reliance Jio resists
https://www.whatjobs.com/news/business-news/elon-musks-starlink-targets-india-as-mukesh-ambani-resists
By Nithya Bose in Business News, posted June 23, 2023
Elon Musk wants to bring his satellite broadband service, Starlink, to India but faces strong resistance from Mukesh Ambani, who owns telecom giant Reliance Jio.
During a meeting with Indian Prime Minister Narendra Modi in the US, Musk said the potential benefits of Starlink in providing internet access to remote villages and areas with limited connectivity.
However, he did not address the ongoing conflict between Starlink and Reliance over the distribution of satellite broadband spectrum in India.
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This disagreement sets the stage for a battle between two heavyweights to control satellite services in the world's most populous nation.
Starlink urges the Indian government not to hold an auction for the spectrum but instead to assign licenses, following a global trend.
The company argues satellite broadband spectrum is a natural resource that should be shared among companies, and an auction could impose geographical restrictions and raise costs.
On the other hand, Reliance insists on an auction, stating foreign satellite service providers should compete with traditional telecom players and achieve a level playing field.
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In a sign of escalating rivalry, a source with direct knowledge revealed Reliance will continue to push for a spectrum auction, disregarding the demands of foreign companies.
This development poses high stakes for Musk, as his previous attempt to launch Starlink in India encountered regulatory hurdles in 2021.
Musk is currently in talks with the Indian government to establish a Tesla factory in India.
For Mukesh Ambani, thwarting foreign competition in the satellite broadband sector would further strengthen Reliance Jio's position.
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Reliance Jio already boasts 439 million telecom users, making it the market leader.
It also has eight million wired broadband connections, capturing a 25 percent market share.
Starlink's perspective on spectrum auctions aligns with other initiatives such as Amazon's Project Kuiper and the British government-backed OneWeb.
However, both Amazon and OneWeb declined to comment on the matter.
According to India's Koan Advisory, out of the 64 responses received during India's public consultation on satellite spectrum, 48 favored licensing, while 12 supported an auction, with the remaining responses being neutral.
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Reliance believes that allowing established foreign players like Starlink to enter the market without an auction would create an uneven playing field.
It says that it potentially harms Indian firms, similar to what has been observed in the e-commerce space, where Reliance Retail has competed with Amazon.
Foreign satellite internet companies are concerned that if India holds an auction, other countries may follow suit, leading to increased costs and investments.
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