By Munsif Vengattil, Aditya Kalra and Aditi Shah

NEW DELHI (Reuters) – Having just lost a battle with Elon Musk over the award of India’s satellite spectrum, Mukesh Ambani, Asia’s richest man, could face a bigger challenge as Musk’s Starlink services roll out in India and the both compete against each other in terms of price.

The Indian government announced on Tuesday that it would allocate spectrum for satellite broadband administratively rather than through an auction, just hours after Musk criticized the auction route sought by rival billionaire Ambani as “unprecedented.”

Musk’s Starlink, a unit of SpaceX that has 6,400 active satellites orbiting the Earth to provide low-latency broadband to 4 million customers, has publicly expressed interest in launching in India, but its plans have repeatedly run into regulatory hurdles.

Ambani, who leads India’s largest telecom company Reliance Jio, had sought to aim for a “balanced competitive landscape” since last year and wanted to keep Musk in check as experts say a spectrum auction would have required much more investment and deterred foreign players.

Reliance, which has dominated India’s telecom sector for years, now fears that after spending $19 billion on wireless auctions it risks losing broadband customers to Musk, and perhaps even data and voice customers later as technology advances, a person with direct knowledge said Thursday.

The Indian government says its decision to administratively allocate spectrum to anyone who applies for it is in line with global trends.

No time frame has been set for the process to begin, but Musk’s Starlink has already applied for the necessary approvals. Starlink’s entry into the Indian market would create a new battleground between the two billionaires: pricing.

Musk has thousands of operational satellites, while Reliance has partnered with Luxembourg-based SES Astra, whose nonprofit CelesTrak says it has 38 satellites that Reliance plans to deploy.

“Starlink can price aggressively because it doesn’t need to add more satellites,” said Tim Farrar, satellite industry analyst at U.S. firm TMF Associates.

Ambani once provided free data on his cell phone plans, but Musk is no stranger to such tactics that can alienate local players.

In Kenya, Musk has set the Starlink price at $10 per month, versus $120 in the US, with rental plans available for higher hardware costs. Kenya’s Safaricom complained to local regulators in July, demanding that players like Starlink be required to work with mobile networks rather than operate independently.

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INDIA POTENTIAL

In India, a fiber-based high-speed broadband plan from Reliance Jio costs $10 per month, with long-term plans including the router for free. It has a 30% market share in the wired broadband market.

Starlink plans to initially offer an unlimited internet data plan in India, targeting corporate customers, a second industry source familiar with the matter said.

Reliance and Starlink did not respond to Reuters queries.

With 42 million wired broadband internet users and 904 million telecom users on networks such as 4G and 5G, India is the second largest telecom market in the world after China.

According to DataReportal, internet penetration in India was 52.4% at the start of 2024 and there are still 25,000 villages without internet. And even in urban cities, many areas don’t have glass-based fast internet options.

Musk said last year that Starlink “can be incredibly helpful” in remote Indian villages or places that lack high-speed service, and his former India chief said in 2022 that Starlink then had 200,000 within eight months of launch Addressed customers.

Starlink has also announced plans to launch a constellation of hundreds of satellites worldwide in the coming years to enable “direct-to-cell” voice and data services.

However, Gareth Owen, deputy director of research firm Counterpoint, said some of the fears about Musk may be overblown as “terrestrial networks will always be cheaper (and) businesses will never fully switch to satellite.”

Even before the actual battle begins on the ground, the rivalry between Musk and Ambani is becoming increasingly clear.

A Reuters report this week that Ambani was putting renewed pressure on New Delhi to auction satellite spectrum for a “level playing field” caught Musk’s attention after a social media user asked whether Ambani was afraid of Musk doing so could destroy the Indian billionaire’s telecommunications empire.

“I’m going to call (Ambani) and ask if it wouldn’t be too much trouble to allow Starlink to compete to provide internet services to the people of India,” Musk joked in a post on X in response.

(Reporting by Aditya Kalra, Munsif Vengattil and Aditi Shah; Editing by Susan Fenton)