A Rising China in the Global Satellite Market
By Blaine Curcio
Hong Kong, China, January 15, 2025 - I have covered China’s rising commercial space sector for a long time. And I have covered the global satellite communications industry for even longer. And yet, for the most part, these two worlds have remained pretty separate. Satcom remains a sensitive market in China, because anything telecommunications is a sensitive market in China. Even today, there are only five companies in China with a so-called “Basic Telecommunications License”, that is, a license to operate a telecommunications network: the big three state-owned telcos, China Satcom, and China Transport Telecommunication Information Group Company (CTTIC). For those keeping score at home, that is 5/5 companies being State-Owned Enterprises (SOEs).
And so it has been, with my China coverage and my satcom coverage existing in two separate universes. Until recently, that is, as one commercial Chinese satcom player in particular has taken the global satcom market by storm. This recent development was catalyzed by a shot heard round the Chinese world that occurred in October 2023.
The Leadup to October 2023
The beginning of the end of China Satcom’s monopoly came in April 2021, when China Satellite Networks Limited (SatNet) was established as a centrally-owned SOE, putting them at the same level of the hierarchy as those big three telcos, and far above China Satcom. SatNet’s raison d’être was simple: launch the Chinese version of Starlink. To do that, they were given an effective monopoly on LEO comms satellites in China. And in the 3.5 years since SatNet’s establishment, they have launched precisely zero Chinese versions of Starlink and made precisely no use of their monopoly. In fact, they’ve only launched ~10 satellites, though they did commission a very impressive headquarters building that was recently completed in the Xiong’an New District, a bit south of Beijing. Meanwhile, Starlink continues to take over the world of satellite broadband, and more importantly, continues to connect drones and other materiel in warzones from Ukraine to Congo and who knows where else. Without wanting to read too much into the tea leaves, it seems safe to say that the powers that be atop the People’s Liberation Army and elsewhere are getting increasingly antsy at 1) the incredible power of this new tool being used by western militaries, and 2) the incredible lack of a Chinese response. What to do?
China SatNet's Shiny New HQ in Xiong'an
October 2023 was the shot heard round the world, with China’s Ministry of Industry and Information Technology (MIIT) announcing the “Opinions on Innovating the Management of Information and Communications Industry to Optimize the Business Environment”
The opinions called for coordinated opening of the telecommunications business to private capital, increasing support for private enterprises to participate in mobile communications resale and other businesses and services, and promote the reform of the satellite internet business in steps and stages, broadening the scope for private enterprises to participate in telecommunications. In plain English: more scope for non-SOEs to enter the telecommunications and satellite internet industries.
This was unprecedented, with telecoms being one of the most closely-controlled sectors in China’s economy. In an optimistic scenario, the announcement could open these notoriously stodgy industries to some of that famed, cutthroat Chinese competition. And so it did, in a dramatic way that’s become increasingly clear these past few months.
These Past Few Months
These past few months have been what people used to call a doozy. Unquestionably, the star of the show has been SpaceSail, the Shanghai-based company formerly known as SSST/GMS Space, and their Thousand Sails constellation (formerly known as G60). SpaceSail blasted onto the scene from relative obscurity in January 2024 when they announced a ¥6.7B (~US$935M) funding round, with money mostly coming from the Shanghai Government and the Chinese Academy of Sciences. We speculate, but believe that these two were emboldened by MIIT’s announcement just a few months’ prior.
And since January, SpaceSail has moved at China Speed. Employing two manufacturing primes, the company launched two batches of 18 satellites each in August and October, and has announced plans to have 108 satellites on-orbit by end of year (seeming unlikely). Chinese media sources have speculated a LM-5 launch with 36 Thousand Sails satellites for later this year. SpaceSail officials have noted plans for 648 satellites by EOY 2025, with 324 each to be built by well-established Chinese Academy of Sciences spinoff Shanghai Engineering Center for Microsatellites (SECM), and SECM’s own commercial JV spinoff, Genesat (a JV with the Shanghai Government, more or less).
SpaceSail’s ~$1B from January surely won’t get them to 648 satellites, but Chinese media has noted that the company is currently raising a B-round in the tens of billions of CNY (billions of USD). Off to the races.
With those satellites on-orbit, SpaceSail has been making waves on the ground. Most notable came in Brazil in early November. Some context: Brazilian government opinion of Elon Musk has waned markedly during 2024. This comes because of public spats between Musk and Government officials related to Brazilian government regulations of X.com (formerly Twitter). In short, Musk is not a fan of their regulations, and he’s let the Brazilians know it. At one point, X.com was suspended in the country.
The good folks at Telebrás and SpaceSail. Not shown: Cachaça
Brazil is, of course, a reasonably large market for Starlink, with some 250 million people and a huge SME sector that lacks good connectivity. Even an article from The Economist last year discussed Starlink use among Brazil’s farmers. And while Musk and the Brazilian Government were at one another’s throats, SpaceSail was apparently sipping cachaça and dancing flamenco with Telebrás. Because a few weeks after the whole Musk saga died down, SpaceSail announced a major win: an MoU signed with Telebrás during a meeting of Chinese President Xi Jinping and Brazilian President Lula Ignacio Lula da Silva, with plans for SpaceSail to enter the Brazilian market in 2026. My two cents: the date is plausible.
As a cherry on top, the company’s Brazilian adventures also allegedly involved discussions to launch their satellites from the Alcântara Space Center on the northern coast of Brazil. Given Chinese export control regulations surrounding full satellites, I will definitely believe it only when I see it, but the fact that talks took place is a notable step, and preferential treatment by China towards Brazil with regard to launch would be yet another way to solidify the allegedly rock-solid friendship between Messrs. Xi and Lula.
SpaceSail coming out with their global ambitions.
And Then There Was Zhuhai
Brazil is not the only market where SpaceSail is knocking on the door. During a presentation at the 2024 Zhuhai Air Show in November, a SpaceSail representative showed a world map slide with 6 countries of emphasis: Brazil, Uzbekistan, Kazakhstan, Pakistan, Malaysia, and Oman. And, by 2025 the company plans to be active in more than 30 countries, primarily in Sub-Saharan Africa, but also including Argentina and various countries in Southeast Asia.
In the days following the Zhuhai Air Show, Chinese media began rumbling with rumors of another imminent constellation launch. The rumors became considerably more substantive when more than 10 CAST-labeled crates showed up at Wenchang, Hainan, having been shipped by air from Tianjin. The crates are unquestionably SatNet/Guowang satellites, with the first Guowang launch apparently coming up before the end of the year.
Whether this will be too little, too late for SatNet is anyone’s guess. SpaceSail has jumped out to a big lead, but we should remember that their project was still very much in stealth/not allowed by the government mode until October 2023, and that China Speed is anything but slow. For all we know, SatNet might launch a few hundred satellites in the next few months (though for many reasons, I doubt it).
Conclusion
The Chinese space industry and global satcom industry are at last colliding, driven by at least two large LEO comms constellations coming out of the Middle Kingdom. After a few years of stagnant monopoly, the past 12 months have seen a ramp-up in activity that can only be described as China Speed. Moving forward, we should expect to see more satellites from SpaceSail, and the start of batch launches by SatNet.
With SpaceSail planning global coverage by EOY 2025, we should expect them in more international markets. A cursory look through LinkedIn reveals a growing roster of super-impressive people with incredibly relevant backgrounds: US-educated electrical and spectrum engineers, overseas Chinese with deep ties to Malaysian government and industry, and a bunch of financiers who cut their teeth at western banks that we’ve all heard of. SatNet remains a bit more of a black box, full of SOE employees who have SOE employee tendencies such as having precisely zero LinkedIn presence. They’ve done very little to now, but with their implicit and explicit resources, they should not be counted out.
No one can predict the future, least of all consultants. But moving forward, it seems a pretty safe bet that China will have a much, much bigger impact on the global satcom sector than they’ve had up to now. The only questions are how soon, where, and by which company.
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Blaine Curcio is a contributing Editor of the Satellite Executive Briefing and the Founder of Orbital Gateway Consulting. He’s an expert on the commercial space and satellite industries with a focus on the Asia-Pacific region. He is also an Affiliate Senior Consultant for Euroconsult. Since joining Euroconsult in 2018, he has contributed to a wide range of consulting missions and research reports, primarily covering the satcom sector globally, and broader space industry in China. He can be reached at: blaine@orbitalgatewayconsulting.com
