Satellite Internet: The war is already raging

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On April 20, satellite Internet was clearly included in the scope of "new infrastructure" for the first time.

People are very familiar with the Internet, but it becomes difficult to understand when the word "satellite" is added. In fact, satellite Internet refers to the use of a large number of satellites to form a communication network, which effectively solves the Internet service problems of remote and scattered areas as well as users in the air and at sea by taking advantage of satellite communication's wide coverage, large capacity, and no geographical influence.

The communication network infrastructure represented by 5G, Internet of Things, Industrial Internet, and Satellite Internet, the new technology infrastructure represented by artificial intelligence, cloud computing, blockchain, and the computing power infrastructure represented by data centers and intelligent computing centers together constitute the new information infrastructure, which is the so-called "new infrastructure". Satellite Internet, which has taken advantage of the "new infrastructure", has also become a big outlet.

New infrastructure trend

The strong spring breeze of new infrastructure has also brought a strong spring breeze to the satellite Internet market.

After the government's press conference, satellite internet stocks strengthened in the afternoon, and the stock prices of many related companies rose. As of the close of the day, China Satellite Communications Co., Ltd. rose by the daily limit, China Satellite Communications Co., Ltd. rose by 7.83%, Huali Technology Co., Ltd. rose by 5.25%, and Beidou Starlink Co., Ltd. rose by 4.5%. In addition, Aerospace Information Co., Ltd., NavInfo, Aerospace Electronics Co., Ltd., and Aerospace Development Co., Ltd. all rose slightly.

Satellite communication is currently the only communication technology that can simultaneously achieve strong anti-destruction, wide coverage, fast and flexible deployment, large transmission capacity, stable and reliable performance, and no restrictions on terrain and region. Satellite communication can achieve wide-area seamless coverage that neither wired telephone networks nor ground mobile communication networks can achieve, and is particularly suitable for areas that are not suitable for traditional terrestrial communications.

For the population in low-density areas and areas with serious lack of communication infrastructure, building satellite Internet infrastructure to connect them to the global Internet is one of the core solutions. According to the global Internet access data disclosed by the United Nations, 49% of the world's population still has no access to the Internet world.

It is conceivable that if satellite Internet can really develop nearly half of the world's population into its users, the benefits will be great.

The coverage of satellite Internet is complementary to the upcoming commercial 5G. In densely populated urban areas, 5G ensures high-speed network for a large number of users at the same time, while in remote areas with less 5G coverage, such as the sea, desert, forest and other sparsely populated areas, satellite Internet ensures network access for users in the area.

Satellite Internet: Fertile Ground for Business

The vast space is no longer a mysterious space, but a fertile land for business.

In 2019, the total operating revenue of my country's three major telecom operators was 1.41 trillion yuan. According to the estimate that the customers of the "Starlink" system launched by "space madman" Musk account for about 3%-4% of traditional telecom users, the market space for my country's satellite Internet is expected to reach 42-56 billion yuan in the future.

Of course, satellite Internet will also provide investment opportunities for the entire industry chain. From satellite manufacturing to rocket launches, every sub-industry is full of business opportunities.

The satellite internet industry chain mainly consists of three parts: satellite manufacturing and rocket launch, ground base stations and terminal equipment, and satellite communication operations. According to the forecast of the Satellite Industry Association (SIA), the market size of the three parts accounts for approximately 7.5%, 44.6% and 47.9% respectively.

Therefore, companies related to satellite manufacturing and rocket launches will benefit first, and companies related to terminal equipment and satellite communication operations will benefit later, but the market space is larger.

According to Tianfeng Securities' estimates, my country's annual output value of satellite internet is expected to reach RMB 400 billion in 2028, of which the annual output value of satellite manufacturing is RMB 40.362 billion, the annual output value of rocket launch is RMB 18.07 billion, the annual output value of ground equipment is RMB 171.61 billion, and the annual output value of satellite applications is RMB 173.39 billion.

According to data from the Satellite Industry Association (SIA), the global aerospace economy had reached $360 billion as early as 2018. It is not difficult to see that there is still huge potential for development in this market in the future.

Of course, in such a huge market, there has already been a lot of turmoil.

Foreign technology giants took the lead

Although humans are born and grow up on Earth, their vision is not limited to the Earth.

Musk is a typical example. In 2015, Musk formally proposed the "Starlink Project" , which plans to launch about 12,000 satellites to form a "Starlink" network between 2019 and 2024, and provide low-cost Internet services worldwide.

In May 2019, Musk's SpaceX used the Falcon 9 rocket to send the first batch of 60 "Starlink" satellites into orbit. As of March 2020, SpaceX has successfully sent the sixth batch of 60 "Starlink" satellites into space. According to reports, SpaceX will plan to launch a batch of satellites every two weeks in the future to improve its "Starlink" plan.

Although the 180 satellites launched are just a drop in the bucket compared to the planned 12,000 satellites, it has become the world's largest commercial satellite constellation.

In addition, as the main competitor of the Starlink project, OneWeb’s satellite-building capabilities should not be underestimated.

OneWeb claims that it is the first company to use commercial and mass production technology to significantly reduce the time and cost of satellite production. Compared with the industry's average speed of 12-18 months to manufacture each satellite, OneWeb Satellite's satellite manufacturing speed is as high as 2 per day.

Amazon is also focusing on satellites. Its "Kuiper Project" plans to launch 3,236 satellites into orbit and provide low-latency, high-speed space Internet services to the world. Although Amazon has not yet officially announced when it will launch its first Kuiper satellite, according to the 7-year frequency band Amazon has applied to the International Telecommunication Union, the satellite will be launched soon.

According to Bloomberg, Apple is also developing satellite network technology, trying to find a way to transmit data (such as Internet connections) directly to its devices. The report mentioned that Apple already has about 12 engineers in related industries and expects to deploy its results within five years.

Whether it is SpaceX or OneWeb, or Amazon and Apple, they have already set their sights on the vast space and are currently building or have already built their satellite Internet systems, which also allows them to take the lead and seize the market.

Domestic companies are in hot pursuit

Of course, it is not just Musk and his team who are looking up at the stars. In China, there are still many companies that have their eyes focused on the sky above their heads.

Although China lags behind the United States in satellite Internet construction progress by almost a year, the two countries are still in the first echelon.

As for central enterprises, China Aerospace Science and Technology Corporation and China Aerospace Science and Industry Corporation proposed their own low-orbit communication projects, the "Hongyan Constellation" and the "Hongyun Project" respectively in 2015. Both projects launched their first verification satellites at the end of 2018.

The Hongyan constellation project consists of 300 low-orbit small satellites and a global data service processing center, which can provide users with global real-time data communications and comprehensive information services. The Hongyun project plans to launch 156 satellites to form a satellite-based broadband global mobile Internet network.

It is worth mentioning that China Satellite Communications, a listed company under China Aerospace Science and Technology, is a company engaged in satellite operation services. It is the only satellite communication operator in China that owns communication satellite resources and is independently controllable.

In addition to these "national teams", private aerospace companies are also making great efforts.

On January 16, 2020, Galaxy Aerospace successfully launched its first low-orbit broadband communication satellite with a communication capacity of 10Gbps, which can provide broadband communication services to users through satellite terminals. Jiutian Microstar plans to use 72 satellites to build a low-orbit IoT constellation. According to the plan, Jiutian Microstar's IoT satellite constellation will be deployed by 2022.

Space Aerospace, a subsidiary of the automobile company Geely Technology, has also begun recruiting rocket engineers to prepare for its foray into the rocket field, as confirmed by Yang Xueliang, vice president of Geely Auto Group.

Although my country started relatively late in planning its commercial satellite industry and exploring low-orbit small satellite networking technology, the overall state-owned and private satellite constellation plans currently present a more diversified and multi-point structure, which to some extent makes up for the late start.

Satellite Internet has long been a red ocean

It is not difficult to see that this turbulent market is no longer a blue ocean. However, being at the forefront of the "new infrastructure", it is inevitable that some people will be overwhelmed by enthusiasm and lose their rationality.

In fact, the so-called space Internet or satellite Internet is not a new concept. In the 1990s, Motorola launched the Iridium Project, a low-orbit mobile satellite communication system consisting of 11 orbits and 7 satellites in each orbit. Its concept is no different from today's satellite Internet plan, both of which use satellite networks to ensure communication.

However, the advantages of the Iridium project did not outweigh the disadvantages of high costs. Before the Iridium project completed the layout of the satellite network, communication operators had already achieved full coverage of cellular mobile communications. Coupled with the increase in network speed and the decrease in costs, Iridium declared bankruptcy at the beginning of this century.

The previously mentioned OneWeb is also in deep bankruptcy crisis. Under the influence of the epidemic, OneWeb is considering filing for bankruptcy to solve the problem of capital shortage in response to high costs and fierce competition.

It is not difficult to see that the cost issue is still an issue that satellite Internet needs to pay attention to. In addition, despite the huge development potential, if you want to maintain a place in the market, you have to consider how to survive in the competition.

Satellites, a hard technology industry, need not gimmicks and trends, but technological content and technical barriers. This market has long been occupied by leading players. If you cannot ensure your own technological strength and differentiated competitive capabilities, and only use satellite Internet as a gimmick, it is better to stay away from this industry.

The new wind is strong, and the future market is equally huge. Satellite Internet is an undeniable future trend. However, this industry is not as blue as imagined, and the competition in the market is still very fierce. The new infrastructure has indeed brought a spring breeze, but whether it can go with the trend requires more basic strength.