With Viasat’s recently announced partnership with China Satcom, we’ve opened the door to what's expected to soon be the largest aviation market in the world. Since the partnership focuses on working with China Satcom to provide in-flight connectivity (IFC) to the country’s fast-growing airlines, consumers in China will soon get their first experience with Viasat in the air.
In addition, Viasat’s existing airline customers are expected to be able to offer passengers the same kind of high-speed connectivity experience while flying into, over and out of China as they would in other parts of the world.
This relationship with China Satcom provides Viasat a unique opportunity to enter this market with the country’s only high-capacity Ka-band satellite provider with a telecom business license. It demonstrates Viasat’s flexibility in working with regional Ka-band satellite partners.
Here’s how this partnership will work:
- Both companies are working to jointly develop the business in China. For Chinese airlines, the service will be offered as a China Satcom service leveraging Viasat’s IFC equipment. Chinese airlines will also have roaming access onto Viasat’s global network when outside China airspace. For Viasat’s current and new airline customers (outside of China), the service will remain a Viasat service. Viasat will gain roaming access to the China Satcom network when flying into, over and out of China.
- Viasat will deliver and support its IFC products and services tailored for use on the China Satcom network. China Satcom will leverage its telecommunications service provider business license, satellite operating expertise, and Viasat’s ground and space infrastructure technology to lead delivery of advanced IFC services to the airlines. China Satcom’s growing Ka-band satellite fleet includes the already operational ChinaSat-16 satellite as well as ChinaSat-18, planned to enter operational service later in 2019.
- Each company will maintain its own intellectual property and operate its equipment using a multi-layered approach to network services.
- In terms of security, the service, when using China Satcom satellites, will essentially be a “walled garden,” with protective layers in place to ensure both networks are secure.
“This is really an extraordinary opportunity for Viasat to enter the China market — one that is poised for tremendous growth,” said Viasat’s Don Buchman, vice president and general manager of Commercial Aviation. “There are approximately 3,000 commercial aircraft in operation in China today, but only about 4 percent have connectivity.”
The market outlook for IFC in China is big, and growing. According to the International Air Transport Association (IATA), China will pass the U.S. as the world’s largest aviation market by 2022. A report by Boeing released in 2018 outlined some other indicators of the size of the China aviation market:
- China will need 7,690 new aircraft over the next 20 years.
- China today accounts for 15 percent of the world’s commercial plane fleet. By 2037, that will reach 18 percent.
- China’s passenger traffic volume is expected to grow at an average annual rate of 6.2 percent.
- The market value of all those aircraft is nearly $1.2 trillion.
China also has a highly engaged and growing internet user base:
- More than 800 million people in China are active internet users, according to a report cited in Forbes. That’s nearly 60 percent of the population.
- Online mobility is extremely important for Chinese people, with about 90 percent of the internet population using mobile devices.
While industry reports have noted the “conga line of airline IFC providers signing agreements to enter the Chinese market” – none have produced any solid deals yet.
Buchman addresses that by saying: “China Satcom has a good satellite and roadmap that will cover a lot of air routes, and we bring a strong reputation for IFC services and equipment in the industry, especially at Ka-band. The real test will be signing up airlines.”
STAY UP TO DATE WITH OUR LATEST NEWS