The Indian telecom sector is witnessing a flurry of activity with the entry of satellite-based internet services. Amidst this, Vodafone Idea (Vi), a leading telecom service provider in India, has announced a strategic partnership with AST SpaceMobile, a company building a space-based cellular broadband network accessible directly by everyday smartphones. This collaboration arrives at a time when Elon Musk's Starlink has secured its operating license in India, intensifying competition in the sector.
The partnership between Vi and AST SpaceMobile aims to expand mobile connectivity across India's unconnected regions. AST SpaceMobile's technology connects directly to standard mobile phones without requiring specialized hardware or software. This aligns with the Indian government's "Digital India" initiative, which seeks to provide universal mobile access. The "SpaceMobile Satellite System" will integrate AST SpaceMobile's satellites with Vi's terrestrial network, offering 4G and 5G coverage in remote areas where traditional mobile infrastructure is difficult to deploy. The collaboration will focus on developing commercial offerings for various sectors, including consumer, enterprise, and IoT. The company has also placed a video call from space using a standard mobile phone in the past.
Starlink, on the other hand, has received government approval to launch its satellite internet services in India after a three-year wait. Union Minister for Communications Jyotiraditya M. Scindia confirmed that the operating license had been granted to Starlink, enabling SpaceX's official entry into India. The company is expected to offer two main plans: a "Residential Lite" plan for smaller families with minimal data needs and a "Full Residential" package for heavier internet users. The standard kit, including the Starlink satellite dish, is estimated to cost Rs 33,000, with monthly unlimited data access expected to range between Rs 3,000 and Rs 4,200.
The entry of Starlink has spurred existing telecom operators, Reliance Jio and Bharti Airtel, to tie up with the satellite internet service provider to extend coverage beyond land-based networks. After granting the license to Starlink, the Indian government is exploring broader partnerships with the company to strengthen satellite communications and support the Digital India initiative. Minister Scindia met with SpaceX President and COO Gwynne Shotwell to discuss potential collaboration, emphasizing the transformative potential of satellite technologies.
AST SpaceMobile's partnership with Vi and its inclusion in the Russell 1000 Index, signals institutional recognition of its market capitalization and growth potential. The Russell 1000 typically attracts passive index funds, potentially driving inflows of $1–2 billion into ASTS’s shares. This inclusion also reduces liquidity risks for retail investors and positions ASTS as a mainstream investment.
The satellite broadband market in India is projected to reach $1.9 billion by 2030, making it a lucrative opportunity for companies like AST SpaceMobile and Starlink. While Starlink's entry is anticipated to disrupt the digital connectivity landscape, particularly in rural and remote areas, AST SpaceMobile's partnership with Vi could provide a competitive edge by leveraging Vi's existing network infrastructure and customer base. The company completed the first-ever space-based 4G call to an unmodified mobile phone, followed by a 10 Mbps download test and a 5G voice call in September 2023.
The increased activity in the satellite internet sector is expected to benefit consumers by providing more options for high-speed internet access, especially in underserved regions. The government's support for these initiatives is likely to accelerate the rollout of satellite-based broadband services, contributing to the overall growth of the digital economy in India.
