China will be a formidable satellite Internet service competitor

In a study of the Internet in China in the late 1990s, my colleagues and I observed that "China has been able to execute plans effectively by allocating resources to competing, government-owned enterprises," and Kai-Fu Lee shows that they have pursued a similar strategy with respect to AI. Now they are doing the same with low-Earth orbit (LEO) broadband satellite constellations.

Characteristics of the Hongyun and Hongyan test satellites

Last December, state-owned China Aerospace Science and Industry Corporation (CASIC) launched their first experimental Hongyun (rainbow cloud) Project satellite and a week later China Aerospace Science and Technology Corporation (CASC) launched their first experimental Hongyan (wild goose) Project satellite. (Both CASIC and CASC have Wikipeida pages and their Fortune Global 500 ranks are 322 and 323).

As shown here, Hongyun launched a test satellite in December 2018 and said they planned four more during 2019, but there is no record of those having been launched as of today. They have, however, completed tests of Web browsing, video chat, and high-resolution streaming and said users across China would be able to access the demonstration system. (I assume that refers to test users).

They initially planned to begin operating with 156 satellites by the middle of the 14th Five-Year Plan (2021-25), emphasizing service in China's remote regions. Late last year, they expanded the constellation plan from 156 to 864 satellites orbiting at 1,175 km with an 8 Terabytes per second capacity. They hope to serve 2 million 5G users through direct connections to base stations, 200,000 broadband users and 10 million Internet of things (IoT) users. The focus will be on China and Belt and Road nations.

CASIC has also established two satellite factories in Hubei and Hunan provinces. This may have been necessitated by the increase in the number of planned Hongyun satellites or it may be another application of the strategy of creating competing state-owned enterprises.

Hongyan applications (source)

CASC's Hongyan project plans a constellation of around 320 LEO satellites. They have launched one test satellite so far and had hoped to launch 8 more by 2020, but did not make that deadline. They expect to have 60 operating satellites "around" 2023 and to be able to provide global coverage with the full constellation by 2025.

As shown in this illustration, they plan to connect buildings, ships, trains, and planes and to provide mobile backhaul and, most interestingly, direct service to mobile phones. He Mu, Hongyan Application Director, promised the development of a "chip [that] can be integrated into the mobile phone so that everyone holding an ordinary mobile phone will have access to seamless satellite telecommunication with global coverage." That does not sound like a mobile connection to a base station with satellite backhaul, but neither does it sound possible.

Earlier this month a third competitor, GalaxySpace, launched Yinhe-1, which is expected to test Q/V and Ka-band communications at up to 10 Gbps. They refer to Yinhe-1 as a "5G satellite." I'm not sure what a "5G" satellite is, but note again that the above diagram shows a satellite communicating directly with a mobile phone, as opposed to a mobile tower. Check out this short video on the satellite and launch:

CASIC has four other "five clouds" projects underway in addition to Hongyun: Feiyun, using solar-powered drones, Kuaiyun, using near-space airships (dirigibles?), Tengyun, a project to develop a reusable space plane, and Xingyun, an 80-LEO narrowband IoT constellation using cubsats, the first of which is to be launched soon.

As noted above, Chinese state-owned enterprises often compete with each other, but they also cooperate. For example, CASIC's Hongun-1 was launched on a CASC rocket. (I wonder how they arrived at the launch price). Will Hongyun and Hongan exchange traffic at shared ground stations? Will their satellites one day intercommunicate in order to optimize a joint constellation with different orbits? Will they intercommunicate with China's geostationary satellites and other space assets?

It is often argued that government ownership and subsidy are unfair to competitors and lead to a suboptimal allocation of resources. I assume this sort of government-brokered "coordinated competition" is more common in China than in the US, but even here, the lines between government-sponsored research and development, government procurement and industrial subsidy are a bit vague as are the criteria for anti-trust enforcement. People and organizations will learn to game either system, so both must be dynamic.

Hongyun, Hongyan and GalaxySpace are late to the game. OneWeb, SpaceX, and Telesat are beginning to sign up customers and will launch a lot of satellites this year. Amazon is also a late-comer, but they have a lot of money and complementary infrastructure. Like Amazon, China has funds for the long run, domestic infrastructure which can be shared by the three LEO projects and they are working on reusability. Furthermore, they have a political advantage in the "Digital Silk Road" nations of our increasingly divided world and divided Internet. China will be a formidable satellite Internet service competitor.

Update 4/26/2020

The US military has tracked the Galaxy satellite launched in January in a 637 by 621-kilometer altitude orbit inclined at 86 degrees. On April 23, Galaxy engineers conducted a three-minute video call via a WiFi hotspot that used the satellite for backhaul.

As noted above, Galaxy has referred to this as a "5G" satellite constellation and we speculated that they may have been implying direct connections from cell phones to orbiting 5G base stations, but these test results confirm and @Megaconstelai points out, they are using the satellite for backhaul from terrestrial 5G cells.

Update 5/26/2020

A few Hongyun test results are in. The brief note speaks of spectral thermometer tests and image data. There was no mention of broadband Internet tests.

Update 9/8/2020

A Galaxy Space test achieved 1 gigabit per second for each of its 16 Ka-band user beams and Blaine Curcio says 2020 is a turning point for Chinese commercial space. SpaceX and others are racing ahead and China has a strategic -- military, political, and commercial -- interest in keeping up with the West/US in space. The Digital Silk Road runs through space.

Update 9/20/2020 

GalaxySpace is building a factory to mass-produce low-cost satellites in East China. They will manufacture "more than one" satellite per day, joining SpaceX (four per day) and OneWeb (three per day) as mass-production LEO broadband satellite manufacturers.

Their current test satellite has verified high-frequency Q/V/Ka and other frequency band communications and they have achieved 10 Gps speed within a 300,000 Km^2 footprint. They also succeeded in a 5G wireless test, which I assume means they communicated through a 5G base station.

In a related development, China's National Development and Reform Commission added satellite broadband, 5G, and the Internet of Things to it's “New Infrastructures” list. That means more money will be invested in these technologies.

Consultant Blaine Curcio speculates that the Chinese government assumes increased importance of the Internet in a post-COVID world and rather than limiting the investment effort to the state-owned enterprises, the government has opened the doors to the private sector as well.

Update 1/19/2021

Construction of China's first smart manufacturing plant for satellites has been completed. Production will begin in March and the first product will be Hongyun broadband Internet satellites. The factory will be capable of making 240 small satellites a year and it sounds like it can be repurposed to build satellites for other constellations. SpaceX and OneWeb both claim to be able to produce satellites faster, but their factories may not be as easily reconfigured. Regardless, the Chinese space industry is progressing rapidly.