Jio, Airtel & Starlink – What’s Cooking?

Mar 13, 2025

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Are Starlink’s deals with Jio & Airtel all hype?
Catching up with the IT sector

Are Starlink’s deals with Jio & Airtel all hype?

Starlink has been all over the news.

The company made two big splashes recently. First, Airtel announced it was partnering with Starlink. A few hours later, just as everyone thought Airtel had pushed ahead of Reliance in this race, Jio made a similar announcement.

If we’re reading things right, within the space of hours, Starlink suddenly has two points of entry into India — India’s two largest telecom titans.

So… what’s happening? Why are we suddenly seeing all this activity out of nowhere? Frankly, we don’t have any real answers. There are very few details out there in the public domain, and we aren’t sure if the few details we’ve seen give us any real clarity. So, instead, we’re just going to lay out everything we know and ask all the questions we have in mind.

Bear with us.

What are we even talking about?

Now, before we get into all these deals and agreements, let us explain what it is that Starlink does.

See, right now, you’re reading this on the internet. That tells us a few things about you. For one, you have internet access. That means someone has invested money into putting up a mobile tower or an optical fibre network somewhere around you. And if that’s the case, you probably aren’t the only customer they’ve made this investment for. You probably live in some reasonably well-populated area with hundreds of other internet users.

Now, imagine that wasn’t the case. You lived in some remote, far-flung part of the country — some small village in the middle of nowhere with no power or connectivity. There was nobody around you, and so, no telecom company thought of trying to get any internet to you — no fiber cables, no cell towers, nothing.

Is there a way you could still get online — and perhaps read your favourite daily newsletter on the markets? Well, there’s one way. You could get a signal straight from space.

This is what Starlink makes possible. It has thousands of small satellites orbiting the Earth, which send super-fast internet straight down to anyone with a dish about the size of a pizza box. You don’t require cables or really, any major infrastructure — if you have a clear view of the sky, you can get an internet connection.

If you aren’t living under a rock, you probably know the brains behind this — Elon Musk.

Now, satellite internet itself is nothing new. But in the past, satellite internet was a bit of a joke. It was slow, expensive, and had delays so bad that you could click a link, get up, walk around, grab a snack, and sit back down before the page loaded. That’s because old satellites orbit way up in ‘geostationary’ orbit, 36,000 kilometers above Earth. They’re so far away that signals take a long time to travel back and forth.

When Starlink arrived, though, it changed the game. It put satellites much closer to the Earth — in low Earth orbit, just 350 to 1,200 kilometers above us. Because it’s so much closer, signals have to travel for a far shorter distance. This makes the internet faster and cuts delays down to almost nothing. It’s not as fast as fiber broadband, but it works well. And more importantly, it works anywhere: deserts, forests, war zones, oceans — places where regular internet doesn’t exist.

Now, there’s, of course, more nuance to this (and we barely know most of it — I mean, this is literally rocket science). But this should help you to get the hang of it. With that, let’s get to Airtel and Jio’s deals with Starlink.

What we know so far (And what we don’t)

We don’t really know much about these deals yet.

From what’s been announced, Airtel and Jio will work with Starlink to distribute its satellite internet services through their networks. This includes making Starlink kits available via their retail outlets, integrating it into business offerings, and exploring infrastructure-sharing possibilities.

Honestly, from the looks of it, nothing concrete has been outlined. The language of the announcements suggests that they aren’t even fully sure what these deals will look like. Both companies have released statements that indicate they’re yet to “explore” how Starlink fits into their service offerings.

Maybe in a few months (or years), more details will emerge. But until then, we have some critical questions that need answering.

SpaceX needs to come in first

Here’s one thing you shouldn’t miss from either announcement. Both say something along the lines of “This agreement… is subject to SpaceX receiving its own authorizations to sell Starlink in India.”

Translation: This agreement only goes ahead if SpaceX gets its own approvals to enter India. Now, back in 2021, this was a big issue. Starlink had started selling pre-orders for its services. But then, our Ministry of Communications ordered SpaceX to stop immediately. The company had to issue refunds, and the Chairman of Starlink India even resigned.

At the moment, SpaceX requires a suite of approvals to actually start operations in India: from an InSPACe authorisation for space operations to an allocation of wireless spectrum. These could take years to come through.

In the meanwhile, if we see a repeat — if the government blocks its entry again — can this entire deal fall apart before it even begins?

The Indian internet landscape: Does Starlink have a market?

To understand where Starlink might fit in, let’s look at some numbers.

India has over 1.17 billion telecom subscribers (as of early 2024). Our teledensity — which measures the number of connections Indians have — is around 85%. Our urban teledensity is roughly 130% (that is, there are 1.3 connections for every urban Indian), while our rural teledensity is around 60%.
India’s internet penetration, too, has increased sharply, with over 900 million internet users.
Fixed-line broadband penetration is low, with only 40 million wired broadband connections nationwide, mostly in cities. Mobile data is the primary way people access the internet. Specifically, a large portion of rural India still lacks reliable broadband connectivity.

So, India does have an unserved market for high-speed connectivity, largely in rural areas. That could be the market segment it goes for. But we wonder if most rural Indians will make the switch from cheap mobile data to Starlink. Which brings us to the biggest issue here.

Who can even afford Starlink?

The biggest issue with these deals? Pricing.

See, Starlink is already operational in other countries — and that gives us a sense of what they might want to charge. The company has an ARPU (Average Revenue Per User) that’s many multiples as high as Indian telecom services. Starlink’s yearly ARPU is around ₹1.5 lakh. Even in Indonesia, one of Starlink’s cheaper markets, monthly bills start at almost ₹4,000 a month. In contrast, Reliance Jio’s monthly ARPU is ~₹200, which adds up to around ₹2,400 per year. So Starlink is around 60x as expensive as a regular Jio connection.

The point behind bringing Starlink to India — at least from the announcements — seems to be to bring the internet to the remotest parts of the country. But if the cost is even nearly this high, can it actually work?

Even in the U.S. — Starlink’s biggest market — the service is used only in the most remote parts of the country, while urban areas are well covered by traditional players. But there are two things here: one, the United States has a lot more remote wilderness than we do, and two, people in the U.S. have the disposable income to afford expensive services, even if they live in a small town.

It’ll be hard to bring the same playbook to India. There’s a good chance that someone living in a rural part of our country may not have enough disposable income to afford Starlink’s dish and subscription — which are extremely expensive by Indian standards.

So, if we do get Starlink here, they’ll probably have to think of a new strategy to pursue.

Wait, but doesn’t Airtel already have a satellite deal?

This is where things get even more interesting. Airtel already has a deal with Eutelsat OneWeb, a competitor to Starlink. Much like Starlink, OneWeb also runs on its own constellation of low-Earth-orbit satellites.

Back in 2022, Airtel signed an agreement with OneWeb (now merged with Eutelsat) to offer satellite broadband in India. The idea was to use OneWeb’s low-Earth orbit satellites to provide internet in remote areas — that’s exactly what Starlink is promising now. Those services aren’t up and running yet — but reports suggest they’ll start by June.

So, what happens now?

Is Airtel just hedging its bets? Maybe they don’t want to rely entirely on OneWeb and are opening the door to Starlink as well.
Is OneWeb struggling? Has OneWeb’s progress in India been underwhelming, forcing Airtel to look at alternatives?

Or does Airtel serve up different rival satellite services through the same network?
And what about Jio? Jio has been working on its own satellite broadband plans with SES. So why would it now sign up with Starlink too?

Frankly, we don’t know the answers to any of these questions.

Wait, But Didn’t Jio Oppose Starlink Before?

Just a year ago, Reliance Jio was actively lobbying against Starlink’s entry into India.

The issue? Spectrum allocation.

Jio wanted satellite spectrum to be auctioned — just like telecom spectrum, where companies bid billions to secure the rights to operate.
SpaceX and other global players argued for "administrative allocation" — meaning, they get the license without an auction, in line with how satellite spectrum is distributed globally.
The Indian government ultimately sided with SpaceX, deciding not to auction the spectrum, making it much easier (and cheaper) for Starlink to enter the market.

This was a major regulatory loss for Jio.

Jio had spent around ₹1.5 lakh crore in telecom spectrum auctions in the past and didn’t want a global player like Starlink to get the spectrum without paying anything comparable. However, after the government ruled in SpaceX’s favor, Jio’s position weakened.

Now, instead of fighting Starlink, Jio is partnering with it.

So, what changed? Again, we don’t know.

Is it just that nobody wants to mess with Trump?

We’re just speculating here, but it’s hard not to wonder. For years, India has stonewalled Starlink and delayed Tesla’s entry into the country. But suddenly, everything is moving at lightning speed. Suddenly, Tesla is setting up showrooms in India, and Starlink has struck deals with both Airtel and Jio.

So, what changed? Maybe it’s just that Trump is back. Maybe, we don’t want to piss off Trump, and by extension, we’re also rolling out the red carpet for Musk.

But once again, we don’t know.

Catching up with the IT sector

Everyone knows stocks are risky. Just glance at any price chart these days, and you’ll see all those squiggly lines point right at hell. A stock swinging 5% in a month? That’s totally normal. That’s just how stock markets work.

But currencies? They're supposed to be calmer. You expect steady, glacial movements as countries’ economies evolve and their comparative advantage shifts — not wild ups and downs. So, when the world reserve currency moves as wildly as stocks, you know something unusual is happening. And that’s exactly what we’ve seen since early January. The US Dollar Index has fallen about as much as the S&P 500—a pretty rare event.

This kind of move has implications everywhere — geopolitics, trade, remittances, you name it. But what caught our eye was its potential impact on India’s IT sector. If you’re ever wondering which sectors could be affected by volatility in the Dollar, the IT sector is a no-brainer. India makes more export money selling IT services to foreigners than anything else, and by a huge margin. In fact, India exported around $205 billion worth of software services in 2023-24. Other things that we export — like petroleum products or precious stones — don’t even come close.

And guess what? More than half of those IT services (53%) went straight to the US.

So, if something major happens to the dollar or the US economy as a whole, there will be ripple effects all across India. But the simplest and most obvious casualty? Our IT sector.

On a totally unrelated and co-incidental note (maaaybe?), We also came across a lot of brokerage house reports giving a bearish sector update on the IT sector. So we need to understand what’s happening.

What’s up with IT?

The IT sector was the market’s darling during the pandemic. Everything digital suddenly looked like gold. Businesses scrambled online, remote work became “the thing”, and consumers switched overnight to digital consumption. It was boom-time for IT companies.

But the good times didn’t last — at least not at the same intensity. Growth that would have otherwise played out over several years had been squeezed into just a couple of quarters between 2020 and 2022. But because trees don’t grow to the sky and stocks can never cost infinity, the growth rates moderated.

Fast forward to today, and the scene doesn’t look all that different. Our markets, overall, have been volatile and shaky since early 2025. But that doesn’t begin to explain the IT sector. Nifty IT has been on its own unique downward journey. Since the start of the year, the IT index is down around 17%, compared to just a 7% drop for the broader Nifty 100.

Clearly, something isn't right with the sector.

So what’s going wrong? Look, there’s no one answer. Hindsight makes it easy (and tempting) to find neat explanations for stock movements, but truthfully, pinning down exact causes for what the market does is a tricky business. With that caveat, here’s our best understanding of what is happening after reading what research houses have to say about it.

It’s bad, but how bad, and why?

Investors, analysts, and brokerage houses have all noticed the carnage in IT stocks. Brokerages, in particular, are sounding cautious alarms. One brokerage house came out with a report titled, rather pessimistically, ‘FY26 unlikely to be better than FY25’ — highlighting that growth could remain sluggish.

ICRA projects a moderate 4-6% expansion in IT revenues, in USD terms, in FY2026. This follows a 4-5% increase estimated for FY2025. So basically, it’s saying, “nahh, there is no improvement in the sector; the bad times are far from over.”

There are many things they’re all pointing to. Here are the most prominent ones:

One: Trump 2.0 and the US economy

The current Trump administration talks about tackling structural issues, primarily the US’s ballooning debt and fiscal deficit. Their strategy, though, involves tariffs, tightening immigration, and pushing their 'DOGE' reforms. Unless they nail those to perfection — a tall order — these could slow down growth, push inflation higher, and keep interest rates elevated.

And that's bad news for India's IT sector. Slower growth in the US could mean less business for Indian IT companies — at least in the near term. The economic data already hints at trouble ahead. Recent estimates by the Atlanta Fed project that US GDP will shrink by 2.8% in Q1 of 2025. That’s not confirmed yet, but if they’re even directionally correct, it definitely signals weak demand ahead.

But there are a few questions that are still unanswered. Will Trump 2.0 stick to these policies even if the stock market tumbles (we have already seen $4 trillion in wealth vanish since he took office), unemployment spikes, or a recession kicks in — especially with the mid-term elections looming in 2026?

Nobody knows for sure. But even if things are eventually hunky-dory, the uncertainty alone is already making global businesses cautious — exactly the kind of scenario that keeps Indian IT execs awake at night.

Two, interest rates staying high for longer

Not too long ago, investors were hopeful. The US economy was expected to slow down gently—just enough to tame inflation but avoid tipping into recession. Markets assumed that interest rates, after peaking at 5.25–5.5%, would gradually fall, boosting confidence and discretionary spending. This was supposed to be the perfect scenario for Indian IT firms to grow beyond their usual North American BFSI (banking, financial services, and insurance) base.

But now, the game has changed.

With inflation stubbornly high and Trump's policies shaking things up, interest rates might remain elevated for longer than previously thought. Just recently, US treasury yields shot up from 3.6% in September to nearly 4.8%. If interest rates stay at these levels, it’ll become more expensive for US businesses — especially in sensitive areas like banking, telecom, housing, and retail — to spend on IT services.

That means fewer big deals, slower growth, and possibly more pain for India's IT sector.

Three, the Tech Cycle is changing again

Historically, growth in Indian IT exports closely tracks US economic growth—but with a twist. Usually, India's IT growth rate multiplies (or shrinks) depending on where we are in the ‘technology cycle’.

Historically, whenever a major tech shift occurs, IT growth temporarily slows as businesses adjust, rethink spending, and recalibrate their strategies. Take the last decade, for example. Between 2010 and 2013, as the world recovered from the financial crisis, IT exports rode the outsourcing wave and grew strongly. But from 2014 to 2017, even though the US economy grew modestly (~3.8%), India's IT exports lagged slightly (3.6%), as businesses took their time shifting gears towards cloud and digital technologies.

Then came 2018-2023—a golden era where cloud adoption and digital transformation surged, supercharged further by COVID-19. During this phase, India’s IT exports grew at roughly 2.4x the pace of US GDP.

But that high-octane period is behind us. Now, with another new tech transition on the horizon — think Generative AI and next-gen cloud services — the sector is facing fresh uncertainties. That’s where we stand today: we're entering another one of these transitional phases. Growth might slow down again before the next big wave of technology-driven demand arrives.

Is there a silver lining?

Now, all of this paints a pretty gloomy picture for the Indian IT sector. But before we go too deep into the doom-and-gloom territory, let’s look at a few reasons why there is still some breathing room for the IT companies.

Could Europe come to the rescue?

Europe has been busy responding to the US's changing policies under Trump 2.0. With the US pushing for reduced reliance and threatening tariffs, European countries are stepping up their game. They're talking about boosting their own manufacturing, increasing defense spending under the new "Rearm Europe Plan," and redirecting demand toward products made locally.

What does that mean for India?

Well, Europe accounts for around 20% of India's IT exports—far less than the US’s hefty 50%. While a stronger European economy could cushion some of the blow, it's probably not enough to fully offset the slowdown in US business. Still, Europe's push to spend more locally could open up some fresh opportunities for some Indian IT firms, helping at least partly offset US weakness.

And what about the domestic economy?

Closer to home, there's another reason for cautious optimism. India recently rolled out a ₹1 lakh crore income tax giveaway in the latest budget, and the RBI has loosened monetary policy, lowered risk weights, and boosted liquidity—all of which should stimulate domestic demand.

If cyclical domestic sectors (think retail, auto, housing) start seeing more activity, it might lead to increased IT spending within India itself. So, even if global markets remain shaky, a resilient domestic economy could provide a much-needed lifeline for Indian IT companies.

What next?

Clearly, the IT sector is in the midst of a downturn. But every downturn brings lessons and opportunities—so what can Indian IT firms learn from this?

Ramamoorthy, former Chairman and Managing Director of Cognizant India, shared some insightful observations on LinkedIn a few months ago. Indian IT has always thrived on an asset-light, labor-arbitrage model. Companies generated tons of cash, then handed around 75% of it straight back to shareholders. But maybe that’s exactly the problem. That playbook worked fine when labor arbitrage was our winning card. But now, that advantage is fading fast. He says it's time we ask some tough questions:

One, why not put all that excess cash to work as “risk capital,” investing directly in promising tech startups, similar to how global giants like Alibaba and Tencent did? This could position Indian IT firms as mentors and investors rather than just service providers.
Two, what if these cash-rich IT giants teamed up to build critical infrastructure—like computing power, AI, cloud, and cyber capabilities—right here in India? Instead of waiting for the next big wave, Indian IT could create it.

These are all, of course, distant pipe-dreams — they’re loose ideas on how to rewrite the old playbook. But they do point to something important. A moment like this is an opportunity for our IT sector to rework its old habits. If we don’t, we risk becoming irrelevant in a world that’s already started moving forward without us.

Tidbits

Reliance JioStar is poised to generate ₹6,000 crore in advertising revenue from the upcoming IPL, marking a 58% increase from last year’s ₹3,900 crore. With 90% of ad inventory already sold, digital platforms will contribute 55% of the total earnings, while linear TV will account for 45%. The surge in ad revenue follows India’s Champions Trophy win, which itself secured ₹750 crore in ad sales. Major advertisers include Campa, Thumbs Up, My 11 Circle, Dream 11, SBI, Amul, and Birla Opus.
TVS Motor has informed the exchanges that its stake in the Indian Foundation for Quality Management (IFQM) has reduced to 18.18%, following the allotment of additional shares to other investors. With this, IFQM is no longer classified as an associate of TVS under the Companies Act, 2013. TVS had originally acquired a 28.57% stake in IFQM for ₹2.5 crore in February 2023, aiming to enhance product quality and boost exports. IFQM, a not-for-profit entity, has prominent industry leaders like Venu Srinivasan, N Chandrasekaran, and Dilip Shanghvi on its board.
Singapore’s Temasek has agreed to a deal to acquire a 10% stake in Haldiram Snacks Food Pvt. Ltd. for ₹8,500 crore, valuing the company at ₹85,000 crore (~$10 billion). The Haldiram family is in discussions to sell an additional 5% stake to either a Blackstone-led consortium or Alphawave Global at the same valuation. The deal follows the merger of the Nagpur and Delhi factions into Haldiram Snacks Foods Pvt. Ltd., where existing shareholders of HSPL and HFIPL hold 56% and 44%, respectively.

- This edition of the newsletter was written by Krishna and Kashish

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