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Ambani Vs Musk: Reliance Takes On SpaceX With Satellite Broadband JV

Ambani Vs Musk: Reliance Takes On SpaceX With Satellite Broadband JV

Jio is the anchor customer of the joint venture worth $100 Mn

The JV will offer SES’s satellite data and connectivity services in India, except for certain international aeronautical and maritime customers who may be served by SES

In May 2021, the government allowed telecom operators such as Jio, Bharti Airtel, Vodafone Idea and MTNL to conduct 5G trials in India

In a major development for the Indian broadband industry, Reliance Jio has teamed up with a global satellite-based content connectivity solution, SES. The joint venture, named Jio Space Technology, aims to deliver scalable and affordable satellite-based broadband services in India.

Jio Platforms will own a 51% equity stake in the JV while SES will hold the remaining 49% shares in the entity, the company said in a statement. Jio, as an anchor customer of the joint venture, has entered into a multi-year capacity purchase agreement, based on certain milestones along with gateways and equipment purchases with a total contract value of approximately $100 Mn.

“The joint venture will use multi-orbit space networks that is a combination of geostationary (GEO) and medium earth orbit (MEO) satellite constellations capable of delivering multi-gigabit links and capacity to enterprises, mobile backhaul and retail customers across the length and breadth of India and neighbouring regions,” Reliance said in a statement.

The JV will offer SES’s satellite data and connectivity services in India, except for certain international aeronautical and maritime customers who may be served by SES. It will have availability of up to 100 Gbps capacity from SES and will leverage Jio’s premiere position and sales reach in India to unlock this market opportunity, the statement added.

Commenting on the same, Akash Ambani, director of Jio, said, “While we continue to expand our fibre-based connectivity and FTTH business and invest in 5G, this new joint venture with SES will further accelerate the growth of multigigabit broadband. With additional coverage and capacity offered by satellite communications services, Jio will be able to connect the remotest towns and villages, enterprises, government establishments, and consumers to the new Digital India.”

In the backdrop of Covid-19 when broadband has become imperative for boosting the digital economy, the JV will act as a catalyst for connecting the unconnected areas within India and the region to the full range of digital services, offering access to remote health, government services, and distance learning opportunities, Reliance said.

The State Of 5G In India

From cloud gaming on 5G to drone applications, telcos are already testing 5G use cases. In May 2021, the government allowed telecom operators such as Jio, Bharti Airtel, Vodafone Idea and MTNL to conduct 5G trials in India.

In her fourth budget since taking the role, Finance Minister Nirmala Sitharaman announced that the telcos will roll out 5G within 2022-23, with the spectrum auction happening this year.

Previously, the 5G spectrum auctions were expected to take place in 2021, but have been delayed. Telecom Secretary K Rajaraman had, in December 2021, confirmed the auction would commence in early-2022.

“A scheme for design-led manufacturing will be launched to build a strong ecosystem for 5G as part of the PLI scheme,” Sitharaman announced at the Union Budget 2022. The PLI is aimed at enabling affordable broadband and mobile communication in rural and remote areas.

That is, the current budget has also announced a renewed focus on enhancing rural connectivity and bridging the digital divide. Thus, the government will complete optical fibre laying, connecting all villages of India, by 2025, under the BharatNet scheme.

Low-Earth Orbit Satellites: A High Stakes Business

Unlike traditional satellites that orbit around 36,000 kilometres above the earth, low earth orbit satellites orbit at between 500 and 2000 kilometres. Due to this proximity to the earth’s surface, LEO satellites can transmit data at much faster rates, facilitating fast internet speeds.

This means that even people living in remote areas can access high-speed internet without investing in expensive fibre-optic infrastructure in the area.

Not only Reliance, but Indian multinational Bharti Enterprises co-owns OneWeb, another satellite internet company, with the UK government and SoftBank.

Starlink, the fabled satellite internet service that is part of Elon Musk’s SpaceX, was also set to debut in India following the appointment of Sanjay Bhargava as the country director for Starlink. After Bhargava’s resignation and SpaceX not having a license or authorisation of any kind to offer internet services in India, the project faced a roadblock.

Amazon’s Jeff Bezos and Virgin’s Richard Branson are joining the competition with Project Kuiper and Virgin Orbit, respectively.