Satellites For Rural Internet Connectivity Boost And An Opportunity For Telcos

India’s satellite communication sector is poised for significant growth, driven by emerging collaborations between satellite operators and local telecom companies. With a largely untapped broadband market of over 290 million households, particularly in rural areas, satellite broadband providers see enormous potential, according to a recent Morgan Stanley report.

India, with only 3% broadband penetration, remains one of the largest untapped broadband markets in the Asia Pacific, second only to Indonesia and the Philippines in the Asia-Pacific region,​ highlighting the vast opportunities for satellite internet providers.

Satellite operators collaborating with global telcos could unlock over 500 million untapped households, creating an $80-billion annual market opportunity, particularly in regions like India, Indonesia, Brazil, and Mexico.

The report highlights Low Earth Orbit satellites as key to bridging the digital divide, offering faster speeds and lower latency. As LEO technology expands, India could see enhanced rural connectivity, transforming sectors like education, healthcare, and e-commerce.

With over 298 million households in India and only 3% broadband penetration in rural areas, the country's digital landscape is characterised by a vast underserved population.

The potential market is staggering, with an estimated 290.4 million households that could be connected through satellite internet, unlocking a potential revenue of over $19.4 billion per year. This opportunity is driven by the growing demand for internet connectivity across India's rural and semi-urban areas, where traditional fibre and mobile broadband networks are either limited or non-existent.

With support from global players like SpaceX's Starlink, Bharti Enterprises' OneWeb, and Jio Satellite, alongside favourable government policies, India is poised to lead in satellite-powered internet connectivity, creating a more connected and inclusive future for millions.

LEO satellites from companies like Starlink, OneWeb, and Jio Satellite have emerged as key solutions to India's connectivity challenges. Operating at lower altitudes than traditional satellites, LEO satellites reduce latency and enhance internet quality, making them ideal for rural areas where fibre-optic infrastructure is costly.

Global players like Starlink and OneWeb are driving satellite internet expansion in India, with OneWeb already securing a Global Mobile Personal Communication by Satellite license.

Jio Satellite has also received a GMPCS license and is pursuing a trial spectrum to advance satellite-based broadband services across the country.

One of the primary challenges of satellite broadband services in India is affordability. The high cost of user terminals and services is a barrier to adoption, especially in price-sensitive rural markets.

However, companies like Starlink have made significant progress in reducing production costs. Starlink's user terminal cost has dropped by 80%, from $3,000 in 2020 to $600 in 2023, making the service more accessible. Moreover, partnerships between satellite providers and local telecom operators are critical for the success of these services.