RailTel plans to partner with Elon Musk's Starlink. Why it may be great for both

“The discussions have picked up pace with Starlink, but commercials are yet to be finalized. Starlink team has also met RailTel’s officials in New Delhi," the first of the two government officials said, requesting anonymity as talks are private. The company will also explore similar arrangements with other satellite internet providers such as OneWeb, Jio Satellite, and Amazon Leo (formerly Project Kuiper), the official said.

Among various models, RailTel is exploring the use of Starlink’s satellite internet services as backhaul to provide broadband access in remote areas through RailWire. Backhaul here refers to using a satellite to send internet or network data from a faraway location to the main network when fibre or other ground links are not available or not commercially viable.

“It makes sense for RailTel to partner with Starlink as it will be able to tap non-technology feasible areas using satellite internet," said Satya N. Gupta, former principal advisor at the Telecom Regulatory Authority of India (Trai). “For Starlink, it will be a way to market their services as going directly to consumers would involve huge costs, especially in hiring the talent on the ground."

According to Gupta, the partnership offers Starlink a good potential to secure internet connectivity orders in non-technology feasible areas as well as for emergency communication.

RailTel, a Navratna public sector undertaking, has an optical fibre cable network along 67,415 route km of railway tracks and a high-capacity optical fibre cable network along more than 63,000 route km, connecting 7000 railway stations. According to the company's FY25 annual report, its retail broadband service RailWire serves more than 575,000 subscribers through over 11,000 local partners.

Railtel’s revenue rose 12.8% over a year earlier to ₹951 crore in the September quarter, while its net profit rose 4.7% to ₹76 crore.

Railway land for antennas

Starlink has also sought RailTel’s help for getting railway land parcels to set up tracking antennas and earth station gateways, a second official quoted earlier.

“Starlink has identified about 16 railway locations for installing their infrastructure looking at potential demand for its services and capacity utilisation going forward," the official said, adding that RailTel can also provide data centre to data centre connectivity solutions to Starlink as it has a secured network along the railway tracks, which no other operator has.

A tracking antenna is a user terminal to provide internet access. An earth station gateway is a large ground facility that connects satellites to the internet.

Queries emailed to Starlink and RailTel did not elicit any response until press time.

Awaiting spectrum

In India, Starlink’s parent SpaceX also announced tie-ups with Bharti Airtel Ltd and Jio Platforms Ltd, the parent of Reliance Jio Infocomm Ltd, to provide Starlink’s high-speed internet to their customers. Both telecom operators will offer Starlink equipment in their retail outlets.

Currently, satellite internet companies are awaiting spectrum allocation from the government and are undergoing security testing for their services.

The department of telecommunications (DoT) and Trai have different views on the spectrum usage charge (SUC) to be levied on satellite internet companies. While Trai has recommended that companies pay 4% of their adjusted gross revenue, with a ₹500 annual charge per user for serving urban areas, the DoT has suggested a 5% fee and a 1% discount for serving users in underserved areas.

Earlier this month, Starlink listed a price of ₹8,600 per month, along with ₹34,000 for hardware, for its services. However, the company later removed the pricing, citing a technical glitch and stating that it would announce pricing after securing the spectrum and all necessary regulatory approvals.

Last week, Lauren Dreyer, vice president for Starlink business operations, met communications minister Jyotiraditya Scindia.

“Once satellite backhaul has proved to be reliable, the telecoms, towercos (tower companies) and OEMs (original equipment makers) will no longer have a choice but to design networks that take multi-orbit satellite links, local edge computing, and integrated security into account from day one," said Konark Trivedi, founder and managing director of telecom equipment company Frog Innovations.

According to Trivedi, capped initial user base, expensive equipment, and high monthly pricing make it more likely that Starlink will create a niche of “premium rural and mission-critical" customer segment rather than starting and escalating a mass-market tariff war. The larger disruption will be of the nature of changing the architecture of the networks rather than a competition, he said.

Shares of RailTel ended 1.34% lower at ₹331.40 apiece on the NSE on Tuesday compared with a 0.64% fall in the benchmark Nifty 50.