OneWeb sets sights on defence, governance for satellite broadband expansion

One Web can leverage on the fact that it has already rolled out services in parts of Europe, US and Africa and is in talks with at least 2 airline companies in Europe to offer the service inflight

Sunil Mittal-led One Web is aiming at three segments in broadband satellite broadcasting -- all in the B2B space.

Defence, governance (panchayat connectivity, health care, and education) and enterprises in remote areas will be its key markets to begin with.

The reason is simple. A senior executive of Airtel, which will distribute One Web broadband service in the country, said: “While 90-95 per cent of the population of the country is covered by mobile service, the geographical coverage of terrestrial is only 75-78 per cent. So there is a large market for us to tap.”

The satellite company hopes to commercially launch its service by next year and ahead of its competitors. It has the GMPCS (global mobile personal communication satellite) licence to operate the service, the authorisation required from the Department of Space, and two landing stations being built in Mehsana (Gujarat) and Chennai. All it needs is point-to-point spectrum, which, under the newly cleared Bill, will be offered at an administrative price.

Airtel has made presentations to government departments in health, education, and defence, and hopes to demonstrate the service to them soon.

It will take up enterprises in the next phase.

One Web can leverage the fact that it has rolled out its service in parts of Europe, the US, and Africa, and is in talks with at least two airlines in Europe to offer the service on flights.

But the Indian market for satellite broadband, which is in its infancy, is projected to hit over $1.1 billion in five years, according to estimates by the Indian Space Association. And there are other markets that have the potential to grow, such as aviation, where many global airlines are looking at providing connectivity on flight, which is estimated to be a $240 million market in five years in India, or maritime (connectivity on ships and cargo), which could be a $195 opportunity in the same time.

But competitors like Elon Musk’s Starlink might even look at B2C potential -- like tapping affluent homes, their vehicles, or their farm houses. The potential of that market might be interesting. After all, Starlink had in 2021 advertised for pre-booking of broadband service in India from its satellites at $99. And it received 1,000-odd potential users (it returned the money because it did not get the licence to operate in India).

What is clear, at least for now, is that satellite broadband will be more expensive than mobile. For instance, in the US an average mobile service pack is Rs2,000-2,500 a month on 5G, but a satellite broadband pack sells at a starting price of Rs7,000. But what it offers is more or less 4G speeds and latency -- a speed of 200 MBPS at peak and latency of 50 milliseconds. Also satellite broadband is limited by capacity, unlike in mobile, where you can increase it by adding more radios and towers.

But technology can change the game -- as it has done for making satellite broadband even an alternative commercial reality, which it was not just a few years ago. The advent of a lower-earth orbit (LEO), positioned merely 1,200 km above the earth, has ensured that high speeds and low latency could be offered and that could compete with 4G service by straddling across the world with hundreds and thousands of small satellites. With LEO satellites becoming more light-weight (now less than 100 kg) and their prices falling (to $250,000), so did the cost of launching them by over 95 per cent from an average of $65,000 per kg to $1,500.