- Jio is exploring developing a sovereign satellite infrastructure that will complement its fiber and 5G networks
- It comes at a time when the Indian Government is delaying the final approvals of Starlink and other global players because of security concerns
- Experts believe it is a long-term and strategic initiative and Jio may go for a partnership model to build satellite infrastructure
India’s largest service provider, Reliance Jio, is evaluating the development of a sovereign low Earth orbit (LEO) satellite constellation, which would challenge several global satellite broadband providers, including Starlink, Eutelsat OneWeb and Amazon’s Project LEO, among others.
“Jio is evaluating the development of a sovereign LEO satellite constellation for India. We are also partnering with the leading global constellation providers by leasing satellite capacity, so that we can accelerate service availability while building our own long-term sovereign capability,” Jio Chairman Akash Ambani said at a recent Annual General Meeting of Reliance Industries.
“This dual approach will enable Jio to meet India’s connectivity needs faster, while laying the foundation for the Indian satellite broadband platform of global scale,” he added. He also confirmed that the company is already building ground station infrastructure, which will support its partner constellations and Jio’s future satellites.
Interestingly, Jio has partnered with Starlink to sell its services through its retail channel. It has also partnered with Luxembourg-based SES to provide satellite-based broadband services to enterprises.
As per media reports, Jio will need to invest around $10 billion-$15 billion to deploy a constellation with about 1,650 satellites to provide services in the country. The Indian satellite market is valued at around $3.77 billion and it is likely to grow at a CAGR of 16.04% to touch $7.93 billion by 2031, according to Mordor Intelligence.
"Jio's satellite investment should be viewed as a long-term strategic bet rather than a near-term revenue opportunity," said Siddhant Cally, senior analyst at Counterpoint Research. "By integrating satellite capabilities with its existing 5G, fiber and digital infrastructure, Jio is positioning itself as a provider of end-to-end connectivity across terrestrial and non-terrestrial networks."
The move also comes at a crucial moment for India's satellite broadband market as several international satellite operators, including Starlink, Eutelsat OneWeb and SES, continue to await final approvals to launch commercial services in the country. The Indian government is believed to have delayed final approvals because of security concerns as well as sovereignty and control of critical communications infrastructure.
Against this backdrop, Jio's interest in developing its own satellite capability is a strategic venture and not just about broadband coverage. It also aligns with the focus on self-reliance of the Indian government.
Challenges ahead
However, the venture is not without challenges. To begin with, the return on investment in building the LEO constellation is likely to be long-term. This is mainly because connectivity coverage, whether 4G or 5G, is pretty strong in India and if it continues to further expand, the addressable satellite market, whether for direct-to-consumer or rural segments, may not be big.
Enterprise, backhaul and government services are likely to have better prospects, but these are the segments that will also see significant competition from international players like Starlink and Eutelsat OneWeb, thus impacting margins.
"While the financial returns will take time to materialize, this level of investment is consistent with the scale required to compete in the evolving global connectivity landscape and strengthens Jio's long-term strategic position," said Counterpoint’s Cally.
It is unclear what model Jio will eventually follow to build a satellite network. It is possible that the service provider goes for partnership models, which would potentially bring down the cost. “A significant portion of the satellite capacity could potentially come through partner ecosystems, technology collaborations, or phased deployments rather than a fully self-funded greenfield constellation," said Deepak Kumar, founder analyst at B&M Nxt.
"The more important strategic question is not the eventual capex number but whether Jio intends to create a sovereign satellite layer that complements its terrestrial fiber and 5G infrastructure. If that is the objective, the business case extends beyond consumer broadband into enterprise connectivity, government networks, industrial applications, backhaul, and potentially future direct-to-device services,” Kumar added.
Sovereign LEO ventures remain rare
Most of the satcom providers today have global footprints. Country-specific or sovereign LEO ventures remain rare, and for good reason. The capital requirements are prohibitive, the technology supply chain is concentrated among a few players, and the economics only work at scale, which involves serving multiple markets.
China's Guowang constellation is backed by state capital, and Europe's IRIS initiative is also funded through a consortium of member states and the European Space Agency. Both are among the few examples of government-anchored satellite programs.
In this context, for a private enterprise like Jio to develop a LEO satellite constellation without government funding is rarer still. It remains to be seen which model Jio ultimately adopts.