US billionaire Elon Musk’s Starlink and Chinese state-owned Shanghai Yuanxin Satellite Technology Co., Ltd. (SSST) are competing for the right to provide satellite internet services in Pakistan. The competition not only reflects the broader technological competition between the two global powers, but also comes at a critical moment for Pakistan’s digital future. However, the Pakistani government’s repeated delays in Starlink’s license application have raised suspicions that this is an attempt to prevent the company from operating in Pakistan.
According to relevant data, Pakistan has 111 million Internet users and an Internet penetration rate of 45.7%, making it an attractive market for US and Chinese technology companies looking to expand in the country’s telecommunications industry.
Starlink’s licensing application has been delayed again and again
Starlink Internet Services Pakistan, a Pakistani subsidiary of Musk’s Starlink Holdings Netherlands BV, has been trying for the past three years to get authorization to operate in Pakistan, but Pakistan has languished in the process of issuing a no-objection certificate.
The company applied for a low-Earth orbit satellite service license on February 24, 2022. In the following year, the Pakistani government announced a new policy and established a regulatory agency, the Pakistan Space Activities Regulatory Board (PSARB), in addition to the existing Pakistan Telecommunication Authority (PTA) to oversee the issuance of no objection certificates.
On January 22, Pakistani lawmakers demanded at a meeting of the parliamentary information technology committee that Starlink not be granted a license unless Musk apologized for what they said was his endorsement of anti-Pakistan rhetoric on X.
Pakistan’s financial news portal said that Starlink met all legal requirements and safety parameters for obtaining a license and worked closely with relevant agencies, including signing a cooperation agreement with Pakistan International Satellite Co., Ltd. (Paksat International). Pakistan International Satellite Co., Ltd. is responsible for selling satellite capacity for Pakistan’s national communications satellite. Its board members come from the Ministry of Information and Broadcasting (MOIB), the Ministry of Information Technology and Telecommunications (MOIT&T), the Frequency Allocation Board (FAB), the Pakistan Telecommunication Bureau, and the Pakistan Space and Upper Atmosphere Research Commission (SUPARCO). Pakistan’s national communications satellite is the latest model in the geosynchronous communications satellite series and was manufactured by China Great Wall Industry Corporation for the Pakistan Space and Upper Atmosphere Research Commission. This cooperation agreement will bring financial benefits to Pakistan International Satellite Company because the Starlink program will cover the recurring expenses of operational needs.
But Starlink has still not received permission from Pakistan’s Space and Upper Atmosphere Research Commission.
Some industry insiders in Karachi, who requested anonymity, believe this is a covert attempt to delay the process to prevent Starlink from operating in the country.
VOA submitted an email requesting comment to Starlink’s corporate headquarters but had not received a response before the publication of this article.
What kind of Chinese company is competing with Starlink?
Pakistan’s licensing process accelerated in January after Shanghai Yuanxin Satellite Technology Co., Ltd. expressed interest in competing in satellite internet services. The company just met the criteria for applying for a license.
Yuanxin Satellite Technology’s last-minute decision to bid coincided with a Reuters report that raised Chinese concerns about Starlink and SpaceX. A Reuters report in March last year said Musk’s satellite business had reached a secret agreement with US spy agencies. A few days after the report was published, Reuters revealed that the Chinese military and state media had made serious espionage allegations against Starlink, claiming that Musk’s satellite network helped Ukrainian and Israeli forces track enemy movements and identify targets.
According to the official website of Shanghai Yuanxin Satellite Technology Co., Ltd. , it was established in March 2018 and initiated by Shanghai Lianhe Investment Co., Ltd. It is committed to becoming an international, commercial satellite industry group and satellite communication service provider.
The website said, “Yuanxin Satellite uses low-cost, highly integrated, and rapidly iterated satellite intelligent manufacturing technology to build and operate a commercial global low-orbit broadband satellite constellation consisting of more than 1,000 satellites, creating a new type of “satellite Internet” infrastructure covering the world, and providing global users with high-speed, real-time, secure, and reliable integrated broadband business services integrating air, land, and sea.”
The company is working on creating a Chinese version of the Starlink project, the Thousand Sails Constellation Project (G60 Starlink Project). The project plans to put 1,296 satellites into orbit in the first phase, and is expected to launch 648 satellites by the end of 2025 to form a regional network. The company successfully launched a rocket carrying 18 satellites in August 2024.
Analysts say that the purpose of the “Thousand Sails Constellation Project” is to challenge the United States. On the one hand, it is to cover the world’s network services and challenge Musk’s “Starlink Project”. On the other hand, it is to seize low-Earth orbit positions and frequencies to ensure China’s data security.
In February last year, Yuanxin Satellite Technology disclosed that it had received 6.7 billion yuan (US$943 million) in funding and support from the Shanghai municipal government to deploy 13,904 satellites by 2030.
The citizen journalism portal Dialogue Pakistan published a report this month saying that Yuanxin Satellite Technology plans to achieve global network coverage by 2027. Arab News also reported the news in August last year.
In contrast, Starlink has a mature network with more than 4 million users worldwide in 100 countries. It has launched more than 6,400 satellites and is expanding its network to 12,000 satellites.
In addition to Starlink and Yuanxin Satellite Technology, French technology company Eutelsat OneWeb also participated in the bidding, but Starlink and Yuanxin Satellite Technology are the main competitors.
Questions from Pakistani industry insiders
The Pakistani government’s repeated delays in approving Starlink’s operating license and allowing Chinese companies that have not yet started operations in Pakistan to participate in the bidding have raised some questions.
Despite the industry’s need for stable, fast internet services, Pakistan has imposed strict regulations on satellite broadband, adding to existing regulatory hurdles. In Pakistan, the licensing system is complicated by the presence of multiple regulatory organizations overseeing the same responsibilities.
Universal Service Fund CEO Parvez Iftikhar defended the government’s approach, arguing that the delay was necessary to develop a proper framework for issuing licenses and that the process was understandable given the novelty of the situation.
“Starlink will continue to maintain its first-mover advantage,” he said.
Meanwhile, some have raised doubts about Pakistan allowing a young Chinese technology company to compete.
“It is strange that a still-developing company is competing with Pakistan’s established satellite companies. How can the procedures of the Pakistan Space Activities Regulatory Commission and the Pakistan Telecommunication Authority allow a non-operational company to compete for low-Earth orbit satellite services?” asked Muhammad Ishaq, a prominent industrialist and former member of the Khyber Pakhtunkhwa Board of Investment and Trade (KPBIT), in an interview with VOA.
As of press time, Shanghai Yuanxin Satellite Technology did not respond to VOA’s request for comment.
Other industry professionals believe that allowing all three competitors, including France’s Eutelsat, to operate in Pakistan will promote healthy competition and potentially reduce service costs for consumers, especially in rural areas where Internet charges are often prohibitively high. They also suggest using the Universal Service Fund (USF) to subsidize costs and make services more affordable.
Dr. Nauman Ahmad, CEO of SI Group Global Solutions, stressed that while satellite internet is expensive compared to traditional broadband, its potential benefits – such as improving health care in remote areas through telemedicine – make it invaluable.
“Satellite internet has the ability to enhance healthcare services in rural and remote areas by establishing a robust telemedicine network. Patients can access telemedicine services from both public and private institutions,” he said.
Experts said Starlink is significantly different from Pakistan’s traditional Internet service providers. Traditional satellites rely on fixed ground stations for connection, while Starlink uses a network of low-Earth orbit satellites that can communicate with multiple ground stations at the same time. The system also supports inter-satellite connectivity through laser technology, thereby achieving seamless coverage in remote areas.
Pakistanis find it difficult to pay high fees
According to Pakistani media reports, satellite broadband services in Pakistan cost between $126 and $342 per month. Consumers also have to pay a one-time hardware fee of $432. The specific fees vary depending on the speed and type of broadband.
Muhammad Ishaq, a former member of the Khyber Pakhtunkhwa provincial investment board, stressed the importance of reliable internet for sectors such as e-commerce, education, healthcare and agriculture. But he noted that the satellite broadband currently on offer is unaffordable for most Pakistanis.
“Unfortunately, the cost of satellite Internet services is too high. Although Shanghai Yuanxin Satellite Technology Co., Ltd. and Eusat have not announced their charging standards so far, Starlink’s one-time installation fee and monthly service fees are beyond the affordability of most Internet users in rural and underdeveloped areas, where even fixed broadband Internet is not available,” he said.
However, Universal Service Fund CEO Iftikhar is optimistic that the issue of affordability will be resolved once satellite companies start operating in the country.
“Yes, affordability will be a challenge initially, but we need innovation to overcome this. Perhaps using Wi-Fi and allowing a community to share a ‘satellite dish’, rather than just one household, could be a solution. The government, perhaps a universal service fund, could cover the initial costs. Over time, competition would drive down the costs,” he said.
Whether this competition will benefit consumers remains to be seen.