Direct-to-cell satcom tech unlikely to disrupt telco business: JM Financial

The brokerage included that direct-to-cell technology delivers “inferior efficiency” compared to standard cordless connectivity services, which is why, it will not harm Indian telcos’ wireless service that contributes 80-90% of the assessment for Bharti/Jio.

“Globally, satcom business have actually priced satellite web intends varying from $10-to-500 each month (leaving out one-time equipment cost, which is $250-380). By comparison, Indian telcos’ home broadband plans start from $5-7/ month, while the higher-end strategies can cost upto $47/month with speeds of upto 1 Gbps and accessibility to all OTT applications among various other benefits,” stated JM Financial.

Direct-to-cell communications through satellites– being pioneered by Elon Musk’s Starlink– is not likely to interrupt Reliance Jio and Bharti Airtel’s mobile broadband company anytime soon as the satcoms technology is still at an inceptive stage and will certainly likewise be hugely dependent on telcos to access the latter’s suitable 4G airwaves for getting in touch with mobile phones, say analysts at JM Financial.

It included that satellite net companies also give data caps in many plans unlike Jio and Bharti who give unrestricted information in their home broadband strategies. “This can make market penetration testing for satellite web players planning to enter the Indian market, and therefore they will require to sharply lower pricing to be competitive in the price-conscious Indian market.

Analysts likewise stated that satellite net solutions will not position a risk to telcos’ home broadband service since such satellite broadband solutions will be around 7-18 times costlier than Jio and Airtel’s home broadband strategies.

Accordingly, sector professionals claimed satellite web is better for supplying internet access to country and remote locations (where fiber can not reach or is financially unviable) or as a back-up connection. This, it said, is despite advances in satellite modern technology with the development of low-earth orbit (LEO) satellites supplying improved rates and lower latency.

“Direct-to-cell innovation goes to an extremely incipient phase for it to be thought about an alternative to ground-based mobile cordless communications. Better, it needs tie-ups with telcos to get access to their suitable 4G/LTE range to connect with smartphones,” JM Financial stated in a study note seen by ET.

Telecom market professionals claimed satellite internet prices would be much more substantial, taking into consideration that the target users of satellite firms are people residing in remote and rural areas, that are much more price-sensitive than their urban counterparts.

Analysts kept in mind that while Starlink has satellites in space that can straight beam phone signals to smartphones, satcom companies are still in the testing and advancement stage, including the first-mover, Starlink.