Jio forms JV for satellite broadband services in India. A piece that was missing has been tied up.

Now a days nothing escapes Reliance’s attention. Gone are the days when it used to be extremely averse to do tie-ups/ JV’s.

With next generation getting a bigger say and future becoming more and more unpredictable, Reliance seems to have decided – ‘we can not play a wait and watch’ and more importantly ‘we can not do everything on our own’.

The Telecom vertical, Jio, has now announced a JV with Luxembourg based SES to offer satellite based internet services in India.

Key points to note –

  • Jio currently is a typical traditional telecom operator offering fiber broadband and mobile telephony services.
  • Increasingly, there are speculations of future internet to be satellite based that will take away the capacity constraint problem of fiber and also allow internet to reach every nook and corner.
  • Jio’s JV with SES is to address this future possibility. JV would be 51% owned by Jio and 49% by SES.
  • Other players targeting this solution in India are:
    • Airtel-Oneweb – targeted to be launched by 2022 end;
    • Elon Musk’s Starlink – they claim to be ready for launch but have put it on hold due to regulatory challenges;
    • Nelco-Telesat – Nelco is a Tata group company. Expected launch is mid 2024
  • There is however, one significant different between SES’s solution vs all the others above
    • Everyone else’s solution is based on Low-Earth Orbit (LEO) satellites – smaller in size, lower cost, easier to deploy, orbit between altitudes of 160kms and 2000 kms above earth surface . These satellites operate in a constellation with each covering small ground area and orbits the earth very fast.
    • SES’s solution is based on a combination of Geostationary (GEO) and Medium-Earth Orbit (MEO) satellites – GEOs move along with the speed of the Earth. MEOs operate between 2000 kms and 35,786 kms above the earth’s surface, are faster than GEOs but much slower than LEOs. Obviously, they are costlier and bigger in size than LEOs.
  • Jio SES JV has indicated to bring in speeds upto 100 Gbps to consumers in India. This I believe is significantly high (and hence future proof) vs the competition. E.g., Oneweb’s expected speed on launch is expected to be about 200 Mbps. To me 100 Gbps seems a highly speculative number.
  • Jio, as an anchor customer of the JV, has also entered into a multi-year capacity purchase agreement, based on certain milestones along with gateways and equipment purchase with total contract value of $100 mn.
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