Can satellite internet bridge India's digital divide?

Satellite internet in India is posed for substantial growth, with alliances emerging between satellite operators and local telecom companies.

Satellite internet access is set to improve the lives of Indians living in remote and underdeveloped areas where traditional internet infrastructure like DSL or cable is unavailable, which reduces access to education, healthcare, and e-commerce.

Although mobile internet penetration is high, with around 876 million mobile broadband users, many of these users still experience issues with connectivity and speed.

An estimated 665 million people in India, around 45% of the population, do not access the internet, according to joint study released in February 2024 by the Internet and Mobile Association of India (IAMAI) and Kantar, an analytics firm.

Although more and more Indian are accessing the internet, there is also a substantial digital divide, with connectivity in rural areas limited or non-existent when compared with urban areas.

India has the second-highest number of internet users worldwide.

"Satellite internet will provide quick relief to the unserved and underserved especially in rural pockets of India," said Sunil Parekh, co-founder of TechXchange, an organization supporting Indian innovation and startups.

"While satellite internet costs could be higher and speeds varying depending on the provider, video calls, education, health, and payment services can work well," he told DW.

According to Deloitte, a UK based professional services network, India's satellite broadband service market is expected to increase by 36% annually, reaching $1.9 billion (€ 1.75 billion) in 2030.

The introduction of Low Earth Orbit (LEO) satellites significantly enhances service quality by providing lower latency and higher speeds compared to traditional geostationary satellites.

Competition for the spectrum

Competition is heating up for India's satellite broadband spectrum with around half a dozen key players. 

Indian tycoon Mukesh Ambani's Reliance Jio is partnering with Luxembourg-based SES Astra, a top satellite operator. Other global giants such as Amazon's Kuiper and Elon Musk's Starlink are also vying for a spot.

Starlink has received an in-principle approval from the Indian government, however, it is awaiting final vetting although it has over 6,400 satellites in orbit and millions of subscribers.

The Indian government is considering an administrative approach for spectrum allocation rather than auctions, which could facilitate quicker entry for satellite providers like Starlink.

The exact start date for satellite internet services hinges on obtaining final approvals from regulatory authorities.

"The issue of sharing spectrum based on administrative allocation versus auction remains an issue between US players and Indian telecom giants," said Parekh.

"The government is taking a view to follow international guidelines based on administrative allocation. Overall, satellite internet is a good development in digitizing India in remote areas of the country," he added.

Satellite internet suited for rural India

Satellite networks are less susceptible to damage from natural disasters compared to terrestrial systems and services can be restored quickly even when local infrastructure is compromised.

Shrijay Sheth, founder of Legalwiz.in, a consultancy firm, said that while India already has high internet penetration, both in terms of data consumption and digital commerce, satellite internet advances will result in more adoption and reductions in costs through economies of scale.

"It will widen the reach where currently internet access is limited due to physical infrastructure requirements," Sheth told DW.

"Low earth orbit (LEO) satellite constellations like Starlink and OneWeb are already getting early success, and India's commitment to space tech will be a direct incentive to home-grown innovation within this space," Sheth added.

India's government recently approved over 10 billion rupees ($135 million) to support space tech startups.

The recent approval of 10,000 million rupees (€110 million) for a venture capital fund for Space tech startups has been an impetus.

India government has also opened the door to 100% foreign direct investment in satellite manufacturing components without prior clearance, which has sparked significant investor interest.

"This is a ripe opportunity for the rural populace which will enable them access to vital services like telemedicine and digital education while creating opportunities for new connected industries," added Sheth.

High costs 

High costs remains a hurdle for satellite internet services as a consumer product. Setting up satcom technology is expensive, and competing with the low pricing of terrestrial DSL and mobile broadband services is difficult.

However, experts believe that given the advantages offered by satellite broadband in bridging the digital divide and unlocking the potential of India's underserved regions, operators will keep the costs down.

"What Jio accomplished with broadband in reasonably populated areas of India, satellite broadband promises to do to under-populated and disconnected parts of India," said Yash Shah, of Momentum91, a custom software development company.

"This technology promises to bring along a completely new wave of population to the connected world," Shah added.

"Every business wants to be a part of this revolution. It remains to be seen whether this will be achieved by a global player or a local one," said Shah.

Edited by: Wesley Rahn