China’s LEO push looms over Western expansion efforts
"Ambitious plans from China for a global broadband network could hamper Western constellation operators seeking to maximize their international subscriber numbers.
While finer details about these plans remain under wraps, they come amid China’s aggressive pursuit for more international infrastructure under its colossal Belt and Road initiative, which seeks to capitalize on the country’s economic strength to play a higher profile role in global affairs.
To date, state-owned satellite operator China Satcom has made little impact on the world stage and has primarily focused on serving domestic needs from geostationary orbit (GEO).
The operator has capacity across south and southeast Asia — and over the Middle East and Africa in partnership with Belarus — but has little international business other than in a few select markets, such as Indonesia.
China’s international satellite communications presence is set to change in the next five to 10 years as the country deploys a global network in low Earth orbit (LEO).
A Chinese LEO constellation with strong government backing could make it harder for western operators to compete internationally, particularly in countries with deep political ties to China.
🇨🇳 See The coming Chinese megaconstellation revolution
Belarus, Pakistan, Venezuela, Bolivia, Laos, and other counties that have previously bought GEO satellites from China “might be more likely to lean towards a Chinese constellation for government projects,” said Blaine Curcio, a senior affiliate consultant for Euroconsult.
These countries could also be more inclined to award landing rights to a Chinese constellation over Western alternatives.
China’s international satellite communications presence is set to change in the next five to 10 years as the country deploys a global network in low Earth orbit (LEO).
While they might have been small markets anyway for the likes of U.S.- based Starlink and OneWeb of the U.K., countries that could allow both Western and Chinese constellations pose more interesting questions for the future shape of the industry.
“This would include Indonesia,” Curcio added, “where the population/market is big enough for the government to negotiate favorable landing right terms with constellations, especially if there are multiple options.”
Malaysia could also be in this group, along with Brazil, Argentina, and most large African countries.
Entering China
China itself remains largely closed off to foreign satellite broadband providers.
The Chinese government’s firm grip on information channels aside, the country is already well-served by one of the world’s most developed terrestrial communications networks.
Curcio estimates most non-Chinese satellite operators get less than 1% of any global revenues from China, and 0% in most cases.
Starlink and OneWeb have already said they have no plans to serve China with the constellations they are developing.
Up to now, the only operators outside mainland China that have done much business in the country have been Inmarsat of the U.K., Thailand’s Thaicom, and Hong Kong-based APT Satellite and AsiaSat.
And the more strategically important satellite communications become — for keeping autonomous vehicles connected, for instance, or just keeping up with the West — the more analysts expect China to emphasize having its own domestic capabilities.
A similar situation played out three decades ago with the BeiDou Navigation Satellite System, China’s alternative to GPS, Curcio noted.
✓ There will still be niche opportunities for foreign satellite companies seen as leaders in non-sensitive sectors, he added, such as in inflight connectivity, where U.S.-based GEO operator Viasat recently secured a key regulatory milestone.
In partnership with China Satcom, Viasat said Jan. 10 it got clearance that would enable it to install connectivity equipment on more than 75% of domestic planes in China.
But for other types of user terminals and satellite applications, Chinese service providers and manufacturers are closing the gap with the west.
“I could imagine there still being demand in China for certain high-end, cutting-edge technology, but this creates an issue because any technology that would be so cutting-edge is likely subject to export restrictions,” Curcio said.
India battleground
India is set to unseat China this year as the world’s most populous country, according to the United Nations.
India and China have populations of around 1.4 billion people, more than four times the United States, offering huge subscriber potential for connectivity players — although disposable incomes vary wildly within these markets.
And unlike China, India has been making great strides to open up its space industry to foreign companies as part of a push for more outside investment.
These efforts began with carving out commercial functions from the Indian Space Research Organisation (ISRO), the country’s space agency, to streamline them under more business-friendly organizations.
IN-SPACe, or the Indian National Space Promotion Authorization Centre, is now in charge of regulating private sector initiatives in India’s space industry.
And NSIL (NewSpace India Limited) was created to be ISRO’s commercial arm for handling functions such as leasing capacity from other satellite operators.
Foreign satellite operators have occasionally been allowed to lease capacity temporarily to India’s government when the country cannot meet demand with domestically operated satellites, but only under onerous terms that have turned off investors.
A burdensome and uncertain regulatory environment has made India “a difficult market” for foreign space companies, Analysys Mason senior analyst Vivek Prasad said.
However, he expects a new space policy that would mark the culmination of efforts to bring in more foreign space players will be finalized in the first quarter of 2023.
“The market expectation is that it will offer a level playing field to the private players,” Prasad added.
Starlink, OneWeb, and other western satellite operators have been lining up to meet demand for more broadband in the country as it eases protectionist measures.
OneWeb recently got “in-principle approval” for setting up a gateway in India, spokesperson Katie Dowd said, after getting other clearances for its LEO broadband constellation.
She said OneWeb is “eagerly awaiting” the new satcoms policy as a stepping stone to the final approval it needs to provide services in India. However, its network can currently only provide partial coverage there until more satellites are launched.
While momentum behind this policy has been picking up after two years of deliberations, Euroconsult senior affiliate consultant Gagan Agrawal cautioned that orbital slot and frequency rights remain contentious topics.
Even still, the country’s trajectory remains firmly toward more international collaboration in satellite communications.
In 2021, U.K.-based Inmarsat said BSNL, an Indian state-owned telco, got all the licenses needed to deliver broadband to aviation, maritime, and government customers in the country by using the British operator’s satellites.
BSNL was also cleared a year later to use a gateway installed in India to connect Inmarsat’s satellites to Internet of Things (IoT) devices.
More “Western players are expected to provide capacity into the Indian market in the short term,” Agrawal added.
While recent Sino-Indian border skirmishes have not been doing the Belt and Road initiative any favors in India, these Western operators will be hoping their foothold is strong enough to withstand any competitive push from China’s constellation down the line.
This article originally appeared in the February 2023 issue of SpaceNews magazine.
From last year Published: 6:00am, 25 Apr, 2022
The military race for low Earth satellites – and why China is behind
The military race for low Earth orbit satellites – and why China is behind
- Private companies are lining up in the West to provide fast and reliable LEO internet services for the defence sector
- China’s reliance on the state system holds the country back, analyst says.
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China Aims to Knock Out U.S. Space Systems in Conflict
Continuing our look at the U.S.-China Economic and Security Review Commission’s 2019 Report to Congress, we examine the growing threat from China’s military space systems. [Full Report]
China’s development of offensive space capabilities may now be outstripping the United States’ ability to defend against them, increasing the possibility that U.S. vulnerability combined with a lack of a credible deterrence posture could invite Chinese aggression. According to Mr. [Todd] Harrison, [a senior space expert at the Center for Strategic and International Studies], China is “developing, testing, and operationalizing counterspace weapons at a faster pace than [the United States is] making progress protecting [its] space systems against these threats.”
China’s counterspace doctrine is intended to deter the United States from entering a conflict and provide options for rapid escalation once conflict has begun, representing an approach to space warfare which risks destabilizing the space environment.
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