Axis Capital believes Elon Musk’s Starlink satellite-based internet service poses no threat to existing telecom operators as it is likely to enter the Indian market as a highly premium offering.
Gaurav Malhotra, Executive Director at Axis Capital, noted that Starlink’s average revenue per user (ARPU) globally ranges between $25 to $30, compared to $4–$5 for mobile operators in India even after recent tariff hikes.
Broadband ARPU in India stands at around $7–$8, while Starlink’s plans may go up to $40 in some countries.
He also pointed out that while home routers in India are typically provided for free with a security deposit of ₹2,000–2,500, Starlink’s terminal costs range from ₹25,000 to ₹30,000.
Given the high pricing and premium positioning, he indicated there is little concern for telecom operators in the foreseeable future.
Axis Capital maintains a positive view on Reliance Industries, highlighting its recovery after last year’s underperformance and its potential to sustain outperformance going forward.
In the telecom sector, the brokerage remains neutral on Indus Towers due to ongoing uncertainties around Vodafone Idea. While the stock appears inexpensive and offers potential dividends, Axis Capital prefers to stay cautious for now.
As for Bharti Airtel, the next key trigger is expected to be a tariff hike.
Previous hikes led to strong ARPU transmission—98–100% for Bharti and around 90% for Jio—indicating that even a modest increase could support steady ARPU growth.
The last hike took place in June 2024, and the firm expects the next one between December 2025 and June 2026. Over the next three years, ARPU is projected to grow at a CAGR of 9-10%, driven by both tariff hikes and a shift toward premium offerings. CNBCTV18