Why Elon Musk's Starlink Is Facing Trouble In India

A non-profit organization in the telecom industry, Telecom Watchdog, has filed a criminal lawsuit against Starlink, which is owned by Elon Musk's SpaceX. The NGO has accused that Starlink internet service is conning Indian users in the name of pre-booking for its internet service. In the complaint, V Raghunandhan, the secretary of Telecom Watchdog urges TRAI to take appropriate action against the company.

In the letter to TRAI, the NGO alleges that it seeks the regulator to take immediate action in order to stop the illegal activity of Starlink. Also, it asks the regulator to file a criminal case against the company under the IPC (Indian Penal Code) Section 420 for cheating.

This accusation comes on the heels of the statement from Starlink Country Director Sanjay Bhargava a few days back. He stated that the number of pre-bookings for Starlink's services in India has crossed the 5000 milestone. Also, he added that they are working towards extending broadband services to the rural regions as well.

Why Starlink Is Accused?

If you are wondering why the much-hyped Starlink internet service is being accused now, then here we have listed some points detailing the background of this issue.

Since its introduction in March this year, Starlink, the satellite internet service of SpaceX started accepting pre-orders from potential users. The pre-orders are open in select states including Ahmedabad (Gujarat), Indore (Madhya Pradesh), and Tadepalligudem (Andhra Pradesh). Those who want to pre-book the service have to pay a refundable deposit of $99 (approx. Rs 7,400) and the service assures to provide internet speeds between 50 and 150 Mbps. While it started taking up pre-booking, the service is expected to be rolled out in the country by 2022.

The issue is that Starlink that is accepting pre-orders for its satellite internet service in the country has not secured a license in the country. The NGO claims that the company is collecting money from users who want to pre-book the service without a license to provide satellite internet services. Moreover, it is collecting the money in US dollars without filing an official application for the permit.

It cites that collecting money from Indian users in US dollars is an offense as per the RBI rules. The rule against collecting money in foreign currency states that one can issue invoices in other currencies but cannot urge payments to be made in foreign currency from Indian users.

Also, the NGO notes that there are hidden terms and conditions. Notably, users who are interested in availing the Starlink internet service will be able to read the terms and conditions only after making the payment as mentioned above. Customers are informed that there is no assurance regarding the service after the payment is made, it adds. Also, the tariff plans of its internet service will be confirmed only after the launch of the service. Lastly, the NGO cites that Starlink is registered in the tax haven Ireland, as per the DoT website details.

However, Starlink has officially stated that it will hold talks with ministers, top government officials, and parliamentarians on the significance of broadband internet connectivity. Also, it stated that it will enlighten them on how this high-speed connectivity will change the lives of those in rural areas. As of now, there is no official confirmation from the Indian government regarding the same.