Applications for deploying low-Earth-orbit (LEO) satellites using frequency bands in Taiwan could start being accepted in November at the earliest, with the proviso that any company operating LEO satellites must not have shareholders who are Chinese nationals, an official from the Ministry of Digital Affairs said Saturday.
The ban on Chinese investors was put forward in draft enforcement rules for companies applying for frequencies for operating LEO satellites to ensure national security, as LEO satellites can serve as important communication channels during wartime and have been used to aid reconnaissance efforts in warfare, as evidenced by Ukraine’s use of SpaceX’s Starlink LEO satellite constellation in its fight against Russian invaders, the official, who asked not to be named, told CNA.
Local or foreign applicants must have established a company registered in Taiwan as a telecommunications company, whose chairpersons must have Republic of China (Taiwan’s official name) citizenship, according to the rules.
In addition, any foreign shareholder in an applicant company must not directly own more than 49 percent of that company’s shares, and their direct and indirect shares in the company must not exceed 60 percent, the rules state.
The companies’ management will be required to sign declarations about their shareholder structure and willingness to comply with satellite communications regulations and guarantee they would not engage in actions that could compromise Taiwan’s national security while operating LEO satellites, according to the rules.
Asked whether limitations on foreign investments in LEO satellite operators could be relaxed given that some companies, such as SpaceX, have expressed a desire to create single-shareholder companies to oversee their operation of LEO satellites overseas, the source said that many countries do not allow the operation model proposed by SpaceX, and for a rule change of that scope to take place, it would entail lawmakers amending the Telecommunications Management Act.
Meanwhile, the draft regulations set the minimum required paid-in capital for eligible applicants at NT$300 million (US$9.34 million), after representatives from some listed companies suggested that the original threshold of NT$500 million set by the National Communications Commission (NCC) be lowered, the official said.
The paid-in capital threshold and the ban on Chinese investors were introduced by the digital affairs ministry, created in August, after it took over the task of managing LEO satellite operators from the NCC, the official said.
The draft regulations set out four frequency bands for LEO satellite operators, they said, adding that licensing would be based on reviews of credentials rather than through auctioning.
The draft regulations could go into effect as early as November after a public review period recently ended, the official said.
A likely model for LEO satellite applications in Taiwan would be for local telecoms to team up with foreign companies in catering to the special needs of customers both in the private and public sectors, such as the government, which might be inclined to prepare for emergency situations in which conventional means of communication fail, according to a telecom firm executive.
This model would be similar to that adopted by KDDI, Japan’s second-largest telecom, for its LEO satellite services, the unnamed executive said.
Another possible business model would be for local telecoms to utilize LEO satellite services by foreign companies to expand their existing coverage, according to the source.
However, another executive from a different company in the telecom sector is not so optimistic about the profitability of LEO satellites in Taiwan.
While traditional satellites are deployed at altitudes of about 36,000 km, LEO satellites are typically deployed at altitudes of 2,000 km or lower, thus having wider coverage and less delays, effectively complementing the scope of traditional satellites in remote areas and confined spaces such as in mountains, deserts, oilfields, ships or aircraft, said the second executive, who also asked to be unnamed.
People would also be able to use LEO satellites to stream videos and play online games, albeit at higher costs than using Wi-Fi, whose affordable prices and high penetration in Taiwan mean that LEO satellites are not likely to receive an enthusiastic reception from the public, except for people who have to spend long hours in aircraft or ships, according to the second executive.
Source: Focus Taiwan News Channel