As telecom majors including Bharti Airtel have entered into a partnership with Elon Musk’s SpaceX and with it Starlink is gearing up to launch its satellite-based broadband services in the country, global brokerage UBS is broadly ‘neutral’ on the telecom space as a whole.
Pertinently, with the entry of Starlink- internet connectivity in India will be a game-changer offering high-speed internet and revolutionizing digital landscape primarily in rural as well as remote areas.
Nonetheless, until it makes a foray and rolls out its high-speed internet, it will need to obtain the necessary clearances from the Indian government.
Earlier this week, Bharti Airtel announced an agreement with SpaceX (founded by Elon Musk) to bring Starlink’s high-speed internet services to its customers in India. This partnership depends upon SpaceX receiving the necessary clearances to market Starlink’s satellite-based communications services in India. It is the first agreement to be signed in India, which is subject to SpaceX receiving its authorisation to sell Starlink in India. Airtel and SpaceX will conduct a thorough analysis to determine how Starlink can improve and expand Airtel’s existing offerings while leveraging Airtel’s expertise in the Indian market to enhance SpaceX’s direct-to-consumer and business services.
Here’s how global brokerage views Indian telecom space amid the Starlink’s likely foray:
On Bharti Airtel, the brokerage is neutral and has set the target at Rs 1,705 per share- implying potential upside of 4 per cent. The brokerage noted that the company’s India business is trading at an implied FY27e EV/EBITDA of 11x, with limited upcoming positive catalysts.
Additionally, on Indus Towers- the brokerage has set the target at Rs 440, implying over 35 per cent potential gains from the last close. As per the report, Indus Towers is the brokerage’s preferred pick in the space and sees the company benefiting on account of improving free cash flow (FCF) and dividend profile.
Likewise, for Vodafone Idea, the brokerage is bullish and has placed the target at Rs 12.1, implying hefty gains of 73 per cent from the previous close.
Besides, the brokerage also underscored potential surpise for the telecom space, as to where the next trigger shall come from- a tariff hike or government policies.