Airtel backed (OneWeb and Hughes) to bring LEO satellite broadband services to India

About HCIPL: Hughes Communications India Pvt Ltd, (HCIPL), is a majority-owned subsidiary of Hughes Network Systems. Hughes Network Systems is an innovator in satellite and multi-transport technologies and networks for 50 years. HCIPL provides broadband networking technologies, solutions and services, including a full range of managed network services, for government offices and enterprises across segments like banking, aeronautical and maritime mobility, small to medium sized businesses, education, and telecom backhaul, among others. Now serving Airtel Very Small Aperture Terminal (VSAT) customers, HCIPL has a combined base of over 200,000 VSATs. The company is the largest satellite service operator in India.

About Airtel: Headquartered in India, Airtel is a global communications solutions provider with over 480 Mn customers in 17 countries across South Asia and Africa.

The Joint Venture between Hughes and Airtel: The agreement, announced in May 2019, has received all statutory approvals, including those from the National Company Law Tribunal (NCLT) and Department of Telecom (Government of India) and the joint venture has been formed between Bharti Airtel and HCIPL. Hughes will hold a 67 per cent stake in the joint venture, while Airtel will hold a 33 per cent stake.

Hughes and Airtel Form Joint Venture to Provide Satellite Broadband Services in India. They will combine India VSAT operations of both companies to offer wide range of satellite and hybrid network solutions to business and government customers. This Joint venture will serve the growing demand for always on, always available network connectivity for enterprise and government customers. The partnership will bring synergies to the forefront – including multi-orbit solutions – for the benefit of customers across the length and breadth of India. Customers will get access to next generation satellite connectivity backed by proven enterprise grade security and service support.

Note: VSAT is a two-way satellite ground station that transmits and receives data from satellites. It is used to provide satellite-based internet and telecom access to individuals and enterprise customers.

OneWeb: It is co-owned by India’s Bharti group and the UK government. It has applied to the Department of Telecommunications (DoT) for two permits – a national long distance (NLD) and a GMPCS (global mobile personal communications by satellite services) licence for delivering satellite broadband services. DoT has issued a letter of Intent (LoI) to OneWeb for NLD services via satellite, while the one for GMPCS is still pending.

The deal: The low Earth orbit (LEO) satellite communications company OneWeb announced a six-year agreement with Hughes Network Systems to provide LEO connectivity services across India.

What does OneWeb brings to the deal?

OneWeb, is the low Earth orbit satellite communications company. As part of the agreement, OneWeb will connect towns, villages, and local and regional municipalities in hardest-to-reach areas, playing a critical role in bridging the digital divide. OneWeb’s constellation, would cover the length and breadth of India, from Ladakh to Kanyakumari and from Gujarat to the Northeast and bring secure solutions to enterprises, governments, telcos, airline companies and maritime customers. It will invest in setting up enabling infrastructure such as Gateways and Point of presence (PoPs) in India to light up the services. OneWeb plans to launch its high-speed satellite broadband services in India this year to tap into a $1 billion-plus near-term annual revenue opportunity.

Other Potential players in the market:  Elon Musk’s Starlink, Jeff Bezos-founded Amazon and the Tata-Telesat combine are readying to enter India’s emerging satellite broadband services market, leveraging on their respective global low-earth orbit (LEO) satellite constellations.

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