Vodafone Idea began the new year with a denial: it is not in talks with Elon Musk's Starlink over a possible tie-up.

Mary Lennighan

January 3, 2024

3 Min Read

News to that effect emerged in India in late December, triggering a sizeable uptick in Vodafone Idea's share price. Naturally the stock market asked the telco for clarification, and it came on Tuesday in the form of a short statement dismissing the rumour.

"We would like to submit that the Company is not in any such discussion with the named party. We are not aware of the basis of the said news item," the operator said.

The news item in question came from BW Businessworld. Its headline referenced "tie-up talks," but the news piece itself had very little substance, vaguely citing the "grapevine" and the "markets" as its sources, and containing no real assertion that any actual discussions between the parties were taking place. The media outlet was clutching at straws on what was undoubtedly a slow news day.

Its assertions are based on little more than that fact that Elon Musk has an upcoming trip to India later this month for the Vibrant Gujarat business summit, and it seems to be an open secret that he will announce plans to build a major Tesla factory in the country.

"Markets are now hoping that major announcements would be made by Starlink and the government in the telecoms space when Musk visits Gujarat," BW Businessworld claimed. That may well be the case. Starlink has applied for an operating licence in India and has been reportedly on the verge of receiving it for a few months now.

Further, the company was one of a number to lobby – successfully – for the allocation spectrum for satellite services via administrative process rather than auction: India's lower house approved the relevant bill in late December. The market is clearly a big opportunity for Starlink. But there is no indication that Vodafone Idea will be involved.

Starlink has, of course, tied up with mobile operators the world over to be able to offer its satellite broadband services to end users. In India it still lacks such a partner, and with Bharti Airtel having a foot in the OneWeb camp and Reliance Jio sharing a stable with Jio Satellite, Vodafone Idea would be the obvious choice.

But that's hardly newsworthy. Nor is the fact that Vodafone Idea, which operates in India as Vi and has been struggling to keep up with its rivals for some years, could probably do with a partner like Starlink. That's clearly the reason for the share price rise; the telco's stock is slowly dropping back now, incidentally.

The BW Businessworld report notes that Vodafone Idea could also link up with Amazon, which is targeting the LEO market via Project Kuiper, noting that other Vodafone group companies have linked up with both satellite providers in various markets. But again, there's nothing solid there.

Meanwhile, Starlink is pushing on with plans to launch its Direct to Cell satellite-to-phone service which is due to launch sometime this year. On Wednesday its parent company SpaceX announced the launch of 21 new Starlink satellites, including six with Direct to Cell capabilities. That will ultimately give the company the chance to operate in India under its own steam, potentially reducing the need for an operator tie-up.

At this stage, all we can be sure of is that Vodafone Idea is not on the verge of announcing a deal with Starlink, as per its stock market clarification. Whether it should be chasing such an agreement is another matter entirely.

About the Author(s)

Mary Lennighan

Mary has been following developments in the telecoms industry for more than 20 years. She is currently a freelance journalist, having stepped down as editor of Total Telecom in late 2017; her career history also includes three years at CIT Publications (now part of Telegeography) and a stint at Reuters. Mary's key area of focus is on the business of telecoms, looking at operator strategy and financial performance, as well as regulatory developments, spectrum allocation and the like. She holds a Bachelor's degree in modern languages and an MA in Italian language and literature.

You May Also Like