Telecom Pulse Daily Digest

China Builds a Rival Satellite Constellation as SpaceX Goes Public

**Chinese upstart Spacesail is trying to steal SpaceX’s thunder** State‑backed Spacesail launched two satellites on a reusable rocket on June 1, just days before SpaceX’s $1.8 trillion listing on June 12, the largest public offering to date. Much of SpaceX’s valuation rests on Starlink, the satellite‑internet service, which has over 10 million customers across 100 countries. > “Spacesail appears to be deliberately targeting countries where Starlink has faced issues.” – Blaine Curcio, founder of Orbital Gateway Consulting Starlink’s 7,000 satellites dominate internet service in virtually every market where they are present. User growth slowed in the first quarter of this year as sign‑ups tapered in established markets, and rapid expansion left a trail of disgruntled partners and regulators. Meanwhile, Spacesail launched three batches of satellites in five days, reaching 200 in orbit on June 5. The company has moved into markets where Starlink’s complacency had created openings. > “Spacesail appears to be deliberately targeting countries where Starlink has faced political or regulatory issues, or other market issues,” Blaine Curcio, founder of Orbital Gateway Consulting, a Hong Kong‑based firm tracking the Chinese space industry, told *Rest of World*. SpaceX and Spacesail had not responded to *Rest of World*’s queries by the time of publication. ### Going head‑to‑head For governments that previously had no alternative to Starlink, Spacesail’s arrival changed the negotiating dynamic. A second provider, backed by Chinese state financing and willing to work on their terms, gave them leverage they did not have before. Starlink had signed a reseller agreement with state‑linked satellite operator Measat in Malaysia years before Spacesail arrived. Measat then undercut its own partner by bringing in competing resellers, Curcio said. Spacesail signed its first international partnership with Measat early last year. Starlink’s dominance led to similar friction in Africa, where users in several cities had no alternative provider as service quality declined. Spacesail last year registered trademarks in South Africa. Governments across Africa have welcomed the prospect of a new entrant, Temidayo Oniosun, CEO of Space in Africa, a Lagos‑based firm tracking Africa’s satellite industry, told *Rest of World*. > “After gaining market share, Starlink has done several price increases because the competition isn’t there,” Oniosun said. “People in those cities may be looking for alternatives.” In 2024, SpaceX CEO Elon Musk refused to comply with a Brazilian court’s orders to moderate content on his social‑media platform X — leading to a five‑week ban, and an opening for Spacesail. After Chinese President Xi Jinping visited Brazil for the G20 summit in November that year, a Spacesail deal with Brazil’s state telecom followed, and the telecom regulator granted Spacesail an operating licence in February, Curcio said. In Kazakhstan, Starlink’s project to connect 2,000 schools stalled in 2024 after the company refused to meet the government’s data‑security requirements, he said. Spacesail registered a subsidiary in the country in January 2025. Airbus agreed in December to include Spacesail’s network on its in‑flight Wi‑Fi platform, a deal that took Spacesail’s reach beyond individual country markets. Thailand’s state telecom signed a partnership in April, and Spacesail is reportedly negotiating with roughly 30 other countries. Spacesail raised over $1 billion in 2024 and is seeking fresh capital to expand its constellation to 15,000 satellites by 2030. The June 1 launch used a new Chinese reusable rocket, similar to the technology that had allowed SpaceX to build Starlink affordably. With 200 satellites now in orbit, Spacesail said it has enough capacity to support its first commercial application: tracking maritime vessels at sea. The company aims to begin broader commercial services by the end of 2026. ### The U.S. is watching Spacesail’s expansion into Starlink’s growth markets carries direct implications for U.S. companies that rely on satellite connectivity abroad, and for investors in the SpaceX IPO. The growing dependence of countries on Chinese space infrastructure should alarm U.S. policymakers, said Ellis Scherer, a space‑policy analyst at the Information Technology and Innovation Foundation, a Washington‑based think tank that tracks Chinese space capabilities. > “China still lacks a mission‑ready, fully reusable rocket like SpaceX’s Falcon 9.” – Ellis Scherer, space‑policy analyst, Information Technology and Innovation Foundation “China still lacks a mission‑ready, fully reusable rocket like SpaceX’s Falcon 9,” Scherer told *Rest of World*. “Until such a rocket is successfully developed by a Chinese company, Spacesail’s launch cadence will continue to lag significantly behind SpaceX’s, limiting Spacesail’s competitive edge.” Even where Spacesail gains a foothold, replacing Starlink will take time, Oniosun said. Users who have invested in Starlink may be reluctant to pay again for Spacesail hardware — although in cities where Starlink’s quality has dropped because of overloaded capacity, users may be more open to a new provider, he said. The IPO also reflects SpaceX’s expansion into AI computing. After merging with Musk’s company xAI in February, SpaceX now operates data centres in Memphis, Tennessee. In its regulatory filing, the company disclosed a deal under which Google will pay approximately $920 million a month for computing capacity at those facilities through June 2029. Spacesail’s playbook of state backing, non‑Western markets, and government‑level deals resembles that of BYD, the Chinese electric‑car maker that grew with billions in subsidies and overtook Tesla in global sales, Curcio said. The parallel holds in strategy, but satellite internet has a grim track record: Iridium, Spacesail’s best‑known predecessor, had failed before it found a viable business, Curcio said. Spacesail also has a rival at home in China — state‑owned company SatNet — with which it competes for rockets and government support, he said. > “Other than Starlink, effectively no other satellite constellations have been very successful, at least before declaring bankruptcy first,” Curcio said.