How satellite internet can transform digital connectivity in India

Satellite internet market in India is set for growth and has the potential to generate US$1 billion revenue in the near future.

In brief

• Out of nearly 1.4 billion people in India, close to 40% do not have internet access, with rural areas making up most of these cases.
• Demand for instant communication, increased smartphone penetration and the ability to reach rural and remote areas will boost adoption of satellite broadband services across India.
• Satellite internet providers are driven to reach rural markets ahead of their competitors, which is the primary force driving the industry.

Satellite internet or satellite broadband is a wireless internet connection provided through communication satellites orbiting the earth. It is independent of location and can be accessed from anywhere within the range of satellites, as it provides global coverage.
Satellite internet is emerging as an effective alternative for communication and broadband services in remote and rural areas where other traditional internet mediums like digital subscriber line (DSL) and cable are hard to reach. Thus, satellite internet is gradually gaining popularity in the world and big internet companies are entering this space to offer faster internet network. According to the UN estimates, roughly 63% of the world’s total population has access to internet. This provides enough scope to tap into this area and cover the remaining world population. With a multitude of use cases, satellite internet can prove to be beneficial in many ways to governments, businesses, schools, and individuals.

Emerging trends reshaping the satellite internet space

1. Decreasing production costs
   High production costs for launching satellites and installing ground equipment are ultimately passed on to the end-users. Thus, satellite players are trying to cut production costs by redesigning their terminals.
   
   
2. Industry consolidation
   Satellite and space are fixed and high-cost industries, thus market consolidation or partnerships can ensure financial benefits and constant capital flow.
   
   
3. Possibility of disruption in the telecom market
   The increasing number of satellites in the orbit will help satellite operators grow and gradually expand their service offerings. Some of key satellite provider and telecom major, along with their current offerings, are also said to provide a ‘voice-based telephony’ service, which will enable users to make satellite-based calls.
   
   
4. Potential breakthroughs this decade
   There is ongoing rapid digitization and an increase in innovations in the satellite and space industry. Many governments and companies worldwide have begun investing and experimenting in the satellite networks market. With new and large players entering the competition, a global transformation is likely to be expected in the coming years.
   
   
5. Short-term demand-supply imbalance
   With satellite internet on a growing path, supply may exceed demand for the next few years. This is majorly on account of traditional internet operators offering reliable high-speed internet at lower prices than satellite internet. However, the demand for such service is likely to increase, with various governments trying to reduce the digital divide in rural areas and with technological advancements in other sectors.