Satcom companies willing to partner with China to gain market access

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SINGAPORE — Multiple satellite communications companies say they are willing to team up with Chinese companies in order to sell into its sizeable but regulatorily challenging market.

China’s growing prowess in satellite communications, evidenced by a growing number of exported Chinese satellites and investments in foreign satellite companies, doesn’t have satellite operators and service providers spooked the way it does satellite manufacturers and launch providers.

“For the domestic market in China we hope definitely to partner with Chinese partners,” Thomas Van den Driessche, CEO of Belgian ground systems provider Newtec, said June 25 at the CASBAA Satellite Industry Forum here.

“The domestic market in China is huge and it’s opening up for different types of services in land as well as maritime, fishing, boats, aviation and so on,” he said. “That’s a huge opportunity.”

Van den Driessche said the “strong evolutions” of fleet operators China Satcom in Beijing and APT Satellite in Hong Kong have caught Newtec’s attention. Both operators are investing in high-throughput satellites bringing large amounts of capacity to the Asia Pacific for broadband services. Newtec is willing to partner with Chinese companies and the Chinese government to “trigger” access to that market, he said.

“It’s an absolute partner play,” said SES Networks CEO John-Paul Hemingway. “You look at someone like SES who needs to build a global coverage for supporting mPower, mobility customers, et cetera, you have to partner with the Chinese operators.”

Luxembourg-based SES is building seven very-high-throughput “O3b mPower” satellites with Boeing to provide 10 terabits of capacity for connectivity services around the world. Earlier this month, SES gained market access from U.S. telecom regulators for 26 more medium-Earth-orbit satellites, providing regulatory assurance SES says enables it to expand the O3b constellation from equatorial to global.

SES is one of several European fleet operators with eyes on China. London-based Inmarsat has indicated that it may relocate its fourth Global Xpress satellite over China after its upcoming satellite, GX-5, launches next year.

“It’s no secret that we are also looking to do more in China and more in the ‘One Belt, One Road’ region,” Inmarsat CEO Rupert Pearce said last year. “That is a place where we continue to have ambitions.”

Eutelsat of Paris has also stitched itself into China’s “One Belt, One Road” international trade infrastructure program, also known as the Belt and Road Initiative. In January, Eutelsat forged a “cooperation agreement” with China Unicom to use its Eutelsat-172b satellite for inflight connectivity as well as to study collaborative satellite communications services.

The Chinese market “is going toward decentralization from what we can observe,” said Hadi Nazari, CEO of North Telecom, a Dubai-based satellite services provider that uses capacity from APT Satellite, Eutelsat, YahSat and others. “When you want to go to any market … you have to see how you can enter that market.”

“We see China as a fantastic market,” said Mark Rigolle, CEO of LeoSat, a Dutch-U.S. company raising money to build a constellation of 84 low-Earth-orbit broadband satellites.

But Chinese regulations do make it “a somewhat frustrating market,” he added. LeoSat’s constellation is designed to use inter-satellite links for low-latency, high-speed broadband services without a large number of gateway facilities built on the ground. But to access the Chinese market, LeoSat will likely have to build a gateway station there regardless.

“In a country like China — they are not the only country but they are a big country that will require us to route everything through the gateway before it goes out of the country or comes in from abroad, so one of [our unique selling points] is kind of lessened,” he said.

Viasat CEO Mark Dankberg said he views China as “both a partner and a competitor.” China has a large domestic market, but is also selling turnkey satellite systems to customers, helping create new satellite operators in countries like Algeria, Laos and Cambodia.

“They are going to set a level of performance and economic value that others will have to beat if we want to provide [Internet] access to those markets,” Dankberg said.

China is a market of interest to U.S.-based Viasat for its yet-to-be-ordered ViaSat-3 Asia-Pacific satellite, but regulatory uncertainties have prevented the company from viewing China as an anchor market. Viasat has instead mentioned Australia as a potential anchor market for the future satellite promising at least a terabit of throughput.