Nano-satellite developer Sky and Space Global (ASX: SAS) has signed a potentially lucrative memorandum of understanding (MoU) with Beijing Commsat Technology Development Co., to test and explore how the SAS network can be incorporated into the Commsat IoT offering.
The MoU is a preliminary agreement and, while binding, is a precursor to the parties negotiating a more definitive agreement.
Commsat is a Beijing based satellite communications company that is developing a Low Earth Orbit (LEO) constellation to provide IoT services to users and corporations on the Chinese mainland.
Sky and Space Global is a nano-satellite maker with a mission to operate a communications infrastructure based on nano-satellite technology.
The company successfully launched its first three nano-satellites, the ‘3 Diamonds’, into space in June 2017 and is continually developing its growing constellation of 200 nano-satellites, expected to be fully deployed by 2020.
Under the terms of the MoU, Sky and Space Global will collaborate with Commsat to “test and explore” how SAS’ advanced nano-satellite technology can be incorporated and utilised to significantly advance and enhance the current Commsat network offering.
“We at Commsat believe that we can leverage SAS’ capabilities as a pioneer in nano-satellite and communications technologies, with our own extensive connections in China and existing customer engagements for machine-to-machine and Internet-of-Things services,” said Mr Xie Tao, CEO of Commsat.
If tests prove successful, the technology and service capabilities offered by Sky and Space Global could secure a firm foothold in China thereby opening the door to one of the largest consumer-focused markets in the world.
The two companies have said they intend to explore the possibility of joint provision of IoT and additional narrowband communication services in China.
Commsat has confirmed it will collaborate with customers with regards to IoT across many sectors, including heavy machinery, containers, logistics, intelligent hubs and wild animals tracing.
The Chinese IoT market reached US$143 billion in 2016 and is expected to exceed US$231 billion by the year 2020. From 2013 to 2017, China’s IoT market has been growing rapidly at an annual rate of over 20%.
In its “13th five-year plan”, the Chinese government has rolled out the country’s IoT roadmap and elevated the development of narrowband IoT infrastructure to a national strategy, under which by the end of 2020, the narrowband IoT network is expected to reach over 600 million connections and a total number of 1.5 million base stations.
“We have always believed that China will be an important source of demand for our technology and have identified Commsat, a rising star in the Chinese aerospace community, as a partner to embark on these efforts. This important collaboration will allow us to further expand and promote our business in that part of the world while assisting Commsat to deliver M2M and IoT services in remote locations and to meet growing demand in China,” said Mr Meir Moalem, CEO of Sky and Space Global.