GLEX 2021

#SpaceWatchGL Opinion: Communications from MEO: Smart SkyNet – The Next Competitive Frontier?

by Blaine Curcio

Chen Miaoliang Presenting Info on Smart SkyNet. Source; https://mp.weixin.qq.com/s/guJe9_wAymbP5_6yGi0saQ

In an age of LEO constellation mania, it’s easy to forget that there are other non-GEO orbits that can be used very effectively for connecting the unconnected. In particular, I refer to Medium-Earth Orbit, or MEO, an orbit long-frequented by navigation satellites, and, less long-frequented by communications satellites, namely SES’s O3b constellation. The O3b constellation was originally launched to serve the “Other 3 billion”, referring to 3 billion unconnected people around the world (the actual number is now more, and may have been more when O3b was founded).

In the nearly 10 years since SES started launching O3b satellites into MEO, the company has proven the MEO-HTS business case for certain applications, namely maritime (cruise ships), trunking in remote places, and other applications that might require huge amounts of bandwidth delivered to a small number of sites. This week, an announcement from China seems to indicate a plan for a Chinese MEO comms constellation that looks quite a bit like the first generation of O3b satellites.

A Chinese O3b

Earlier this week, we saw a signing ceremony between Tsingshen Tech and a handful of partners, with the ceremony seemingly taking place in Shanghai’s Lingang District. The signing was a cooperation framework for “Application Demonstration Test Cooperation”, and included details on Tsingshen’s plans for a “Smart SkyNet” constellation—essentially a Chinese version of O3b. Quite a lot to unpack here.

First, the constellation specs. According to Chen Miaoliang, General Manager of Tsingshen Technology, the company plans to launch an initial constellation of 8 satellites into MEO by 2025, offering 200 Gbps of capacity and capable of supporting up to 500,000 users. The latter point is interesting, in the sense that one of O3b’s limiting factors is the relative size and expense of their ground terminals, which limits the number of end users (effectively, you need to be able to buy several Mbps of capacity to be landed at a single site). For Tsingshen Technology to serve 500,000 users, we would either need to define users as “first order + second order users” (for example, a mobile subscriber that is getting connectivity from a terrestrial tower that is itself connected to satellite), or otherwise, they would need to have many more small beams, and much cheaper ground equipment.

Chen also noted that the constellation has plans for a 2nd and 3rd phase that would lead to “Terabits per second” of capacity. No timeframe was given for the launch of the 2nd and 3rd constellations. We do not have a lot of detail on manufacturer or other suppliers, but one interesting connection could be the CAS Shanghai Engineering Center for Microsatellites, which has contributed to, among other major programs, the 3rd generation of BeiDou (which is largely in MEO). SECM is also known to have a large manufacturing facility in Lingang District, which is itself home to a free trade zone.

Finally, Tsingshen appears to have a close relationship with Tsinghua University, known as the “MIT of China” and considered either its best or second-best university (the debate with Peking University may never be settled!). The university also has an endowment of more than US$4 billion, and is an active investor in several Chinese commercial space companies. While support from Tsinghua is likely not a deal-breaker, it is a significant plus for Tsingshen.

A Shanghai Government Pet Project?

The announcement of additional details of the “Smart SkyNet” constellation comes about 1 year after the project’s first mention. In June 2020, Shanghai Municipal Government published its Medium-Term New Infrastructure Development Plan (2020-2022), in which they noted plans for developing a satellite internet industry, and, among other things, “Implement the Second Phase of the Smart SkyNet Project”, with no further details given.

While we cannot be sure what is referred to by second phase, the implication is clear that the Shanghai Municipal Government will actively support the constellation buildout. Given the importance of satellite internet to the Chinese government, and the heft of the Shanghai municipal government budget, it is likely that this project will, at a minimum, have quite a lot of financial support.

What Does this Mean Moving Forward

Ultimately, MEO satellite communications remains a relatively niche market, with O3b likely accounting for some ~10-15% of SES’s total revenues, for example. That being said, there are certain advantages of MEO relative to GEO (lower latency being one), and developing such a MEO constellation would in a way force China to develop certain satcom technologies that already exist in the west. With significant support from the Government of Shanghai, Tsinghua University, and, more speculatively, support from SECM, the Smart SkyNet constellation seems to have a pretty good chance of coming into existence in some form or another. Good news for cruise ships, potentially troubling news for O3b.

This article is an expanded version of one of the articles in our recent Dongfang Hour Weekly Newsletter, which offers coverage of weekly updates in the Chinese space sector.

Blaine Curcio has spent the past 10 years at the intersection of China and the space sector. Blaine has spent most of the past decade in China, including Hong Kong, Shenzhen, and Beijing, working as a consultant and analyst covering the space/satcom sector for companies including Euroconsult and Orbital Gateway Consulting. When not talking about China space, Blaine can be found reading about economics/finance, exploring cities, and taking photos.

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