China’s SpaceSail Brazilian Venture: What Are the Market Projections for the Global Satellite Internet Market

By Victor Xu | 4Q 2024 | IN-7631

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In November 2024, SpaceSail signed a Memorandum of Understanding (MoU) with Brazil's state-owned telecommunications company Telebras to provide satellite communications and broadband Internet services. The agreement, signed during Chinese President Xi Jinping's state visit to Brazil, aims to begin operations in 2026. Under this partnership, SpaceSail plans to invest up to US$1 billion in Brazil and install 11 teleports across the country. SpaceSail will also establish a Brazilian subsidiary by the end of 2024 to evaluate demand in regions lacking fiber-optic infrastructure. This strategic move comes as Brazil seeks to diversify its satellite Internet providers beyond Starlink, which currently holds 46% of the country's satellite Internet market with approximately 265,000 customers. The Brazilian government has also offered the Alcântara Base in Maranhão as a potential launch site for SpaceSail's satellites.

SpaceSail (also known as Qianfan (Thousand Sails Constellation) and referred to previously as G60 Starlink) is China's answer to global satellite Internet through a Low Earth Orbit (LEO) satellite constellation. SpaceSail marked a strong start in 2024 by successfully deploying 36 satellites through two separate launches from the Taiyuan Satellite Launch Center. Each launch, carried out by Long March 6A rockets, delivered 18 satellites into LEO. China Great Wall Industry Corporation (CGWIC), a subsidiary of China Aerospace Science and Technology Corporation (CASC), serves as the prime contractor for SpaceSail's satellite launch services. The SpaceSail project has outlined an aggressive deployment schedule: 108 satellites planned for 2024, building up to 648 satellites by the end of 2025 to achieve regional coverage, and ultimately expanding to a massive constellation of 15,000 satellites by 2030.

China's SpaceSail could significantly impact both Brazil's digital landscape and also the global market.

Impact in Brazil:

• Enhanced Connectivity: Through its partnership with Telebras, SpaceSail aims to improve digital connectivity across Brazil's diverse landscape. The initiative will deliver high-speed satellite Internet services to underserved areas, with a particular focus on essential institutions like schools and hospitals, and also the rural communities. This strategic collaboration will enhance digital access in remote regions where traditional fiber-optic infrastructure is impractical. The project not only aims to bridge the digital divide, but also serves as a catalyst for Brazil's broader digital transformation, streamlining public services delivery and fostering economic development in previously disconnected communities.
• Market Competition: Currently, SpaceX's Starlink dominates Brazil's satellite Internet market, controlling approximately 46%. SpaceSail's entry will introduce market competition, which could potentially lead to improved services and more competitive pricing for the domestic consumers.
• Geopolitical Dynamics: The collaboration between SpaceSail and Brazil aligns with China's broader strategy to strengthen ties with Latin American countries. This partnership may influence Brazil's technological alliances and economic policies.

Global Market Impact:

• Increased Competition: SpaceSail represents China's growing influence in global space-based communications, and its expansion into Brazil represents a significant milestone as it is its first major international venture in the global satellite Internet market. With an aggressive deployment strategy targeting over 600 satellites by late 2025 and a planned constellation of more than 15,000 by 2030, SpaceSail will aim to challenge the established satellite Internet providers.
• Market Diversification: SpaceSail's entry into the global satellite Internet market adds to the evolving industry landscape. The company's planned deployment of 15,000 satellites by 2030 will provide consumers with additional choices beyond established providers like Starlink, OneWeb, and HughesNet. The company's partnership with Brazil's Telebras also demonstrates how new market entrants can effectively collaborate with local operators to enhance regional connectivity options.

The global satellite Internet market is rapidly evolving, with Starlink leading the charge with its 6,000+ satellites that control 70% of high-throughput communications. The competitive landscape includes established providers Eutelsat OneWeb, Viasat, and HughesNet, while newcomers Amazon's Project Kuiper and China's SpaceSail (Qianfan) plan ambitious deployments of 3,000+ and 15,000 satellites, respectively. This expanding industry, focused on connecting the remote and rural regions, is projected to generate over US$25 billion in global satellite broadband subscription revenue by 2032, with an 11% Compound Annual Growth Rate (CAGR). For more details, please refer to ABI Research's Satellite Communications: Broadband Deployments and Subscriptions market data (MD-SATCB-101)

As SpaceSail enters the global satellite Internet market, the company faces both opportunities and challenges in the evolving satellite communications landscape. To capitalize on this market entry and support sustainable growth, ABI Research proposes the following strategic recommendations.

Strategic Recommendations for SpaceSail

Production and Manufacturing:

• Scale up satellite production capabilities to meet aggressive deployment targets
• Optimize manufacturing processes for cost efficiency
• Develop standardized production methods for rapid scaling
• Invest in quality control systems for reliable satellite production

Market Diversification

• Target professional services sectors, including:
  • Mining operations
  • Oil & gas exploration
  • Maritime and fisheries
  • Aviation services, including in-flight connectivity
  • Explore opportunities in both emerging and developed markets
  • Developed specialized solutions for industry-specific needs