Nelco Braces For Competition As Starlink Reapplies For Gen-2 Satellite Approval

Market snapshot: Elon Musk's Starlink has submitted a fresh application to India's space regulator, IN-SPACe, for its next-generation Gen-2 satellite network. This application seeking authorisation for nearly 30,000 satellites with direct-to-device capabilities intensifies competition for Tata Group-backed Nelco, which recently announced its own satcom expansion plans.

Data Snapshot

• Starlink's fresh application to IN-SPACe seeks approval for a constellation of nearly 30,000 low Earth orbit satellites.
• Nelco entered a strategic partnership with Lunar Holdco, backed by a USD 20 million investment via compulsorily convertible debentures carrying a 7% annual compounded return.
• Following the investment announcement, Nelco's stock fell 12.45% to ₹946.9 on NSE on August 18, 2026, due to concerns over execution and licensing risks of the pre-revenue venture.

What's Changed

• Starlink's previous application for its Gen-2 constellation was rejected by IN-SPACe due to certain spectrum band non-conformities.
• The space regulator had previously approved only Starlink's Gen-1 constellation of 4,408 low Earth orbit satellites in July 2025.

Key Takeaways

• Starlink's renewed push introduces high-capacity direct-to-device (D2D) connectivity capabilities directly to standard smartphones.
• The application comes as India works on spectrum allocation rules and direct-to-device space-to-phone network policies.
• Nelco is targeting commercial South Asian D2D launches by early 2028, with trials commencing by late 2027.
• Starlink's massive proposed constellation of 30,000 satellites is poised to significantly escalate competition for domestic satcom players like Nelco, Jio, and OneWeb.

SAHI Perspective

The satcom landscape in India is rapidly shifting from traditional enterprise VSAT broadband to high-density consumer and business D2D networks. While Nelco's USD 20 million strategic move into Elveo Mobile targets B2B markets, Starlink's massive proposed 30,000-satellite network represents a giant competitive threat. Starlink's massive scale and existing Gen-1 approvals mean any regulatory green light for its Gen-2 constellation could significantly compress the commercial runway for domestic players before they launch in 2028.

Market Implications

The re-submission highlights the critical role of space regulators in shaping the telecom landscape. For Nelco, the threat of Starlink entering the D2D arena could cap long-term market share expectations, keeping the stock under near-term pressure. However, it also validates the massive potential of the South Asian satellite mobile services market, encouraging further collaboration between telecom companies and satellite operators.

Trading Signals

Market Bias: Bearish

Nelco's stock fell 12.45% to ₹946.9 on NSE following its USD 20 million investment, and Starlink's competitive re-entry into India's space market adds regulatory and competitive headwinds.

Overweight: Telecommunications

Underweight: Domestic Satcom Integrators

Trigger Factors:

• IN-SPACe decision on Starlink's Gen-2 satellite network application
• Draft guidelines and spectrum pricing for D2D satellite services by TRAI and DoT
• Trial progression of Nelco's partnership with Elveo Mobile starting late 2027

Time Horizon: Near-term (0-3 months)

Industry Context

India's satellite communication industry is transforming as the government moves toward administrative allocation of satcom spectrum. This has attracted global majors. In addition to Starlink, Eutelsat OneWeb and Reliance Jio-SES are awaiting spectrum to launch high-speed satellite broadband services, while Nelco and Elveo aim to capture the emerging mobile D2D market.

Key Risks to Watch

• Regulatory rejection or delay in space licenses and D2D spectrum pricing.
• Intense capital expenditures needed to establish ground stations and integrate satellite connectivity.
• Severe competition from global giants like SpaceX's Starlink and Amazon's Project Kuiper.

Recent Developments

On August 17, 2026, Nelco Limited entered into a strategic partnership with Lunar Holdco, Inc. (Elveo Mobile) via a USD 20 million investment in compulsorily convertible debentures to deploy next-generation Direct-to-Device and IoT services in South Asia by early 2028.

Closing Insight

While Starlink's application is a regulatory process, it underlines that the satcom market is about to become a battleground. For Nelco, executing its early-mover South Asian strategy is crucial to establishing market presence before global constellations are fully cleared.

High Performance Trading with SAHI.