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Starlink’s Satellite Communication Services in India Might Face Delays Over Shareholder Disclosure Issues: Report

Issuance of the global mobile personal communication by satellite services (GMPCS) license, which is required to offer broadband, voice, and messaging services in India, demands disclosure of shareholders.

Updated on January 29, 2024 at 3:45 PM: According to a story by the Economic Times, US-based telco Verizon is part of the reason why Starlink is experiencing a delay in receiving its satcom license. Just like Starlink, Verizon had submitted a declaration stating that its stakeholders don’t share land borders with India. However, the government later discovered that Verizon had some shareholding from Pakistan, Bangladesh, and Hong Kong.

Starlink is expected to experience some delays with starting satellite communication (sat com) services in India with it being unwilling to disclose its parent company SpaceX’s shareholder details, according to a report by the Economic Times (ET). According to the report, the reason for this lack of disclosure is that SpaceX is an unlisted company in the US, and privacy laws restrict it from making a full disclosure of its shareholding. Government officials told ET that Starlink has submitted a declaration that none of its investors are from companies that share a border with India. Starlink has requested that this declaration be accepted to grant them the global mobile personal communication by satellite services (GMPCS) license, which is required to offer broadband, voice, and messaging services in India.

Starlink’s rocky road into the Indian sat com market:

Starlink began the process of applying for the GMPCS license back in November 2022. Before that in 2021, the company had run into trouble with the Indian government for accepting pre-orders to deliver its terminals to Indians by charging a nominal fee. The company had planned to conduct trials for its sat com services in India but these plans never ended up going through. The Indian government had then directed Starlink to refund the fees given that the company did not have the necessary permissions to operate in India.

Besides Starlink, multiple other players— like Amazon’s Project Kuiper, OneWeb, and Reliance Jio— have been trying to gain entry into the sat com space, with Bharti Airtel-backed OneWeb emerging as the first company to get all its licenses in order. The other two, just like Starlink, are still in the process of getting the necessary approvals.

It is important to note here that besides the GPMCS license, which is given by the Department of Telecommunications, sat com companies are also required to obtain approval from the Indian National Space Promotion and Authorisation Centre (IN-SPACe) before they can begin providing their services.

Why does Starlink have to submit shareholder details?

According to India’s Foreign Direct Investment Policy, “an entity of a country, which shares a land border with India or where the beneficial owner of an investment into India is situated in or is a citizen of any such country, can invest only under the Government route”. For context, there are two routes of investment into India—an automatic route and a government route, with the latter requiring prior government approval before an investment is made. The policy also says that a citizen of Pakistan or an entity incorporated in Pakistan can invest only under the government route, in sectors/activities other than defence, space, atomic energy and sectors/activities prohibited for foreign investment.

As a result of this policy, Starlink is expected to clarify whether it has any investment from India’s border countries like Pakistan or China. The company’s unwillingness to do so is acting as a roadblock to its application. The Department of Telecommunications (DoT) is seeking clarity from the DPIIT about the ownership disclosures, according to ET.

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