High Speed Internet Battle: The telecom sector is in focus with Jio Platform gearing up to intensify competition in high-speed internet. Right after rival Airtel announced its agreement to offer Starlink’s internet, Jio Platforms on March 12, announced a similar deal with the SpaceX-backed high-speed, low-latency internet. In simple words, both Jio and Airtel are going to offer Elon Musk’s Starlink internet in India.

Jio-Starlink Deal:

On March 12, Jio joined hands with SpaceX to offer Starlink’s broadband internet services to its customers in India. The agreement offers SpaceX its own authorizations to sell Starlink in India, while it enables Jio and Elon Musk-backed company to explore how Starlink can extend Jio’s offerings and how Jio can complement SpaceX’s direct offerings to consumers and businesses.

Jio will make Starlink solutions available through its retail outlets as well as through its online storefronts, as per the statement.

Under the agreement, the parties will leverage Jio’s position as the world’s largest mobile operator in terms of data traffic and Starlink’s position as the world’s leading low Earth orbit satellite constellation operator to deliver reliable broadband services across the country, including the most rural and remote regions of India.

Starlink is an added perk to Jio’s network, as it compliments JioAirFiber and JioFiber by extending high-speed internet to the most challenging of locations in a quick and affordable manner.

Mathew Oommen, Group CEO, Reliance Jio. “Our collaboration with SpaceX to bring Starlink to India strengthens our commitment and marks a transformative step toward seamless broadband connectivity for all. By integrating Starlink into Jio’s broadband ecosystem, we are expanding our reach and enhancing the reliability and accessibility of highspeed broadband in this AI-driven era, empowering communities and businesses across the country.”

Gwynne Shotwell, President and Chief Operating Officer of SpaceX. “We are looking forward to working with Jio and receiving authorization from the Government of India to provide more people, organizations and businesses with access to Starlink’s high speed internet services.”

The deal not only enables Jio to offer Starlink equipment in its retail outlets, but to also establish a mechanism to support customer service installation and activation.

Airtel – Starlink Deal:

On March 11, Airtel signed an agreement with SpaceX to bring Starlink’s high-speed internet services as well.

Gopal Vittal, Managing Director and Vice Chairman, Bharti Airtel Ltd. “This collaboration enhances our ability to bring world-class high-speed broadband to even the most remote parts of India, ensuring that every individual, business, and community has reliable internet. Starlink will complement and enhance Airtel’s suite of products to ensure reliable and affordable broadband for our Indian customers – wherever they live and work.”

Vittal added, “Technology is always evolving and we’re committed to staying at the forefront of innovation so that we can continue to bring the best connectivity experience for our customers. This includes collaborating with global leaders like SpaceX to extend our reach and add new coverage to customers throughout all of India.”

On the tie-up with Airtel, Shotwell said, “The team at Airtel has played a pivotal role in India’s telecom story, so working with them to complement our direct offering makes great sense for our business.”

Airtel’s deal with SpaceX is similar to the deal between Jio and SpaceX.

Under the agreement, Airtel and SpaceX will explore offering Starlink equipment in Airtel’s retail stores, Starlink services via Airtel to business customers, and opportunities to connect communities, schools, and health centres, among many others, in even the most rural parts of India. Airtel and SpaceX will also explore how Starlink could help expand and enhance the Airtel network, as well as SpaceX’s ability to utilize and benefit from Airtel’s ground network infrastructure and other capabilities in India.

Jio Vs Airtel Outlook:

Last month, in its telecom report, brokerage JM Financial said, “We continue to expect telcos’ ARPU to grow at 11-12% CAGR in the next 3-4 years given the consolidated industry structure, and Jio’s need for higher ARPU to justify its significant 5G capex and also given its potential listing plans. Hence, we expect the industry to achieve an ARPU of INR 280-310 in the next 3-4 years (via tariff hikes, MBB upgrades, post-paid additions and data monetisation) for a pre-tax RoCE of 12-15%.”

Further, the brokerage added, “both Bharti and Jio’s managements have reiterated that capex hit a peak in FY24 and is likely to moderate from FY25 with the pan-India rollout of 5G already done. Thus, we estimate Bharti’s India business FCF to rise to ~INR 281bn/ INR 361bn in FY25/FY26 and Jio’s FCF to rise to ~INR 234bn/ INR 369bn in FY25/FY26; Bharti/BHL/Jio are likely to get to net cash position by FY29-30.”