Starlink is successful and aims primarily to succeed in cars, mobility and space. So the concern is that if Starlink had come to India it could have really hurt Geo and Balti’s outlook. But what happened is that they were tied up with Airtel. So the terror right now is that Airtel will become a partner rather than a competitor. Of course, for Jio, competition is intensifying. But I see progress, progressive progress. I see progress mainly in space and in remote Indian regions. In a sense, this will not take part in the data challenge. In a way, it’s bread and butter for current current players. Therefore, Starlink is coming with Bharti. Starlink takes its slower as there is no fairness or anything like that. The focus could be rural, remote or space. There, strategic initiatives have been taken, and in a way, at least in the near future, can alleviate Bharti’s fears. There are two options. You can say I disagree, or you fully agree.
Gurmeet Chadha: no. So I think this will complement existing ground services offered by domestic players. Because India is a very price sensitive market. Our ARPU is currently around $3, at Bharti, around Rs 230, 240 and 250 rupees. The StarLink basic plan begins. It starts at around $25 and $30 from Nigeria. In the US, it starts at around $50, which is much higher. So, initially, this direct satellite and satellite internet complement terrestrial services, but obviously the competition is strengthened over a period of time for satellite internet services.
Secondly, India has around 30-35% of its population, with around 40 people who have no internet access.
Nowadays, these are usually rural areas with terrain that can be difficult to hold back on towers, and areas that can bear, especially in the northeast.
You can also find applications in the Defense and Enterprise segments. So, in my view, it complements and symbolically also becomes a distribution partnership. Now it’s not exclusive. Therefore, I don’t know if they will partner with Jio.
So for Bharti, who is doing very well anyway, it is gradually positive. This is one of the better-performing stocks we’ve seen in the past few months, and the sector is becoming increasingly dual.
Another thing is about knowing the role of Bharti Hexacom here, as it seems like a favorable play when talking about the Indian wireless growth story. It lets you touch pure play airtel wirelessly to two high-growth businesses: home brand or home broadband business.
Gurmeet Chadha: Ah, absolutely, I agree. Even the reason that has gained very positive coverage and upgrades from including global foreign brokerage companies, we see that the free cash flow could actually be around 50,000 crores over the next two years at the point where Bharti will return. So what’s happening now is that there’s a third player who is slowly losing market share.
I think I’d seen my memory yesterday if nearly 150,000 users had come back to me again. So we’re in Dupolistic mode where one player is getting better and better.
The Nigerian business appears to have stabilized its digital and broadband business, even when it turns out that the master plan will start at $5.
So once the industry merges primarily with two players, it’s when profits start to come in and we’ve seen Balti’s performance once over the past two or three years.
Therefore, on the 21st and 22nd, we began generating free cash flows of 15,000-20,000 crores, confirming the performance of the stock. So I’m pretty constructive. There’s no reason to worry. One concern is to compete directly. Now it appears they are working on what is now a partnership model.
The other is of course to its competitors. How about Jio and Vodafone?
Gurmeet Chadha: See Jio. Also, the contract said it wasn’t exclusive, so we have to wait. There were also concerns that Jio was opposed to Spectrum’s administrative auction and satellite spectra.
Jio has invested so much as almost $150 billion, so he actually called for an auction method.
However, globally, the priority route was administratively, as the government seemed to prefer the managed route, as the cost of auctions was so high that the government might not be immediately positive than giving the auction route.
But let’s take a look, I say it’s too early to comment. Like I said, it doesn’t compete directly with this, it complements Bharti and Jio, and also gives you access to better technology and more.
One is StarLink, which allows you to access Airtel in terms of retail network reach. The second thing is that Airtel has also gained from the perspective of access to technology and more.
So it seems to me it’s a complementary and winning situation. We’ll see how that unfolds. So, from a shareholder’s perspective, Vodafone has always said that it seems very difficult now.
The company can still survive and may be a continuing concern, but it looks very tough unless the large investors are gradually diluted significantly.
It seems we spoke too quickly. I think there’s all room for it as Jio comes in from the agency that brings SpaceX’s Starlink high speed internet to its customers. So it seems to be for everyone.
Gurmeet Chadha: Yes, absolutely.
