China has established a new state-owned satellite company that looks set to drive its national LEO broadband efforts.

The State-owned Assets Supervision and Administration Commission (SASAC), which manages national-level state enterprises, announced the formation of the new China Satellite Network Group Co. on April 30.

SASAC did not provide any detail, in particular on how the new SOE will be funded, or whether it will supersede existing broadband satellite projects.

Figure 1: View from above: China's LEO ambitions have geared up a notch with the formation of a new state-owned company.
(Source: Nasa)

China already has two LEO satellite programs underway at state-owned aerospace conglomerates, China Aerospace Science and Industry Corporation (CASIC) and China Aerospace Science and Technology Corporation (CASC).

CASC was due to put the first of 320 satellites into orbit last year but so far none have left the ground.

High hopes

As China space industry consultant Blaine Curcio pointed out on his Dongfang Hour podcast, the problem with these vendor-driven projects is they can procure only from their parent company, ruling out competition at the construction stage.

But Curcio said it's hugely significant that the new entity is under SASAC, which gives it a degree of independence in sourcing, as well as giving the same status as the big three telcos.

The SASAC announcement follows a series of other steps that make clear China's ambition to set up its national satellite company, known as a guowang, to bridge the LEO gap with foreign players such as Starlink and OneWeb.

The new five-year plan sets down the intent to build "an integrated communications, earth observation and satnav space system with global coverage," Curico said. Currently China has all of those pieces except the communications part.

China last year applied to the ITU for 10,000 LEO slots.

In March Bao Weimin, science and technology director at CASC and a member of the Chinese People's Political Consultative Conference, foreshadowed the formation of the new satellite operation.

For satellites, the state will also set up a guowang company to be responsible for the overall planning and operation of space internet construction," he told a newspaper.

Additionally, the senior official at the signing ceremony for the new company was Han Zheng, a member of the Politburo Standing Committee and executive vice premier with responsibility for the economy.

All for one

The pivot to a single national satellite company has some echoes of the decade-long effort to weld the provincial cable MSOs into a single national broadband and pay TV champion.

Unlike the new satellite player, China Broadcast Network (CBN) remained under the control of the cable ministry and continually struggled to get funding.

But CBN's $15 billion recapitalization last year, with investments from big private and state firms such as Alibaba and utility company State Grid, is a likely model for funding China Satellite Network.

It's not clear whether the new company will wholesale its capacity to telcos, or sell direct to consumers, or perhaps both. But the target market will be twofold.

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First is China's remote and rural customers. Despite the extensive reach of China's networks, mountain, grasslands and deserts account for around 60% of China's land area.

The second will be the "Belt-Road" countries, in particular central and southwest Asia, the Middle East and Africa. The core premise of the BRI is that China will supply or fund key infrastructure to drive global economic growth and integration.

With SpaceX and OneWeb well advanced with their plans, and with high-level political backing in Beijing, the China Satellite Network project looks likely to move ahead quickly.

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— Robert Clark, contributing editor, special to Light Reading