'The SpaceX Factor?' Analyst On Why China Is Lagging Behind In LEO Satellite Race

Despite the Russian Army destroying telecom towers in Ukraine, military bases in the country remained online via a network of more than 10,000 small Starlink satellite dishes made by Tesla Inc TSLA CEO Elon Musk's SpaceX.

This came as one of the biggest lessons for the global leaders to realize the importance of fast and reliable low Earth orbit (LEO) internet services.

What Happened: From Germany’s Airbus Defence and Space to Canada’s Telesat, many private players are eyeing the LEO internet space. But the world’s second-largest economy seems to be least interested in that segment for defense purposes, and this may be because it lacks private players like SpaceX, as per analysts, according to an SCMP report.

GalaxySpace launched China’s first LEO broadband constellation, but reports suggest the private startup is more focused on its commercials. 

Beijing has designated LEO satellite internet as a “new infrastructure,” employing it to connect remote parts of President Xi Jinping's Belt and Road Initiative, according to the report.

Richard Bitzinger, a visiting senior fellow at Nanyang Technological University in Singapore, attributed this to Beijing’s reliance on the state system, as per the report. All seven Chinese firms in the top 100 defense companies by revenue are state-owned.

“It’s very hard to do that with state-owned enterprises or with the top-down type of innovation models because there’s a lot more insecurity, a lot less risk-taking,” Bitzinger was quoted as saying.

Why It Matters: The LEO systems promise faster and more reliable internet services than their higher-orbit counterparts as they lower latency and make exchanges easier.

In the U.S., Starlink is one of the major global players capitalizing on that front. It beams down high-speed internet to Earth, especially to remote areas, including those ravaged by war or natural calamity.

Last week, Ukrainian Vice Prime Minister Mykhailo Fedorov praised Musk for quickly restoring internet connectivity in five villages after “serious battles” using the Starlink terminals.

Photo courtesy: Krassotkin on Wikimedia

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
date
ticker
name
Price Target
Upside/Downside
Recommendation
Firm
Posted In: Analyst ColorNewsSPACEGlobalAnalyst RatingsTechMediaGeneralElon MuskGalaxySpaceSpaceXStarLink
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...