India will be among the first markets for Nelco’s direct-to-device (D2D) satellite connectivity as the Tata Group-backed satellite communications provider plans to launch commercial services by early 2028.
The company will also look to begin operations in other South Asian markets like Bangladesh and Sri Lanka as it expands beyond its core satellite connectivity and capacity-reselling business.
Nelco Managing Director and CEO P J Nath said the opportunity in the D2D market is large, adding over time D2D can become a significant part of the satellite communications ecosystem.
“D2D technology allows a satellite to communicate directly with an ordinary smartphone, vehicle sensor or IoT device,” Nath said. He added it is widely seen as satellite communication’s next major growth segment after fixed geostationary broadband and, more recently, low-earth-orbit constellations.
Nelco has recently acquired a minority stake in Lunar Holdco for `191.2 crore ($20 million). Lunar brings to the table satellite mobile connectivity solutions under the Elveo Mobile brand. The strategy is to team up with mobile operators rather than compete with them or sell services directly to consumers. The D2D model will remain predominantly B2B and B2G.
The investment in Lunar is a strategic one. “We don’t want to be just a reseller this time. We want a far bigger and deeper engagement, a strategic partner, not a distributor,” Nath said, adding that the investment also gives Nelco a route to expand beyond India into other markets.
The company, currently operates in the geostationary (GEO) satellites and expects low Earth orbit (LEO) to create new markets rather than simply displace its existing business. In India, there have been delays in opening up LEO services in India.
Nelco sees potential applications across smart agriculture, connected vehicles, maritime safety and remote monitoring, where terrestrial networks may not always be available. While the company plans to build a presence across South Asia, it expects D2D to become a significant growth opportunity over the next five to 10 years as more devices come online.
Nath pointed to Amazon’s agreement in April to acquire satellite operator Globalstar for roughly $11.6 billion, as a sign of the premium the market is putting on future D2D growth.
The company believes prospects for satellite communications are bright as the multiple technologies need to be accessed for the market to develop. It expects regulatory clearance for newer satellite technologies to eventually open up new applications and support growth in India
Nelco’s existing businesses have been under some pressure with the weaker rupee pushing up the cost of imported equipment and hurting margins.