China’s SpaceSail to Challenge Elon Musk’s Starlink in Brazil

(Bloomberg) - Elon Musk's Chinese rival in the satellite internet business plans to start operations in Brazil in 2026, the head of the Shanghai-based company told Bloomberg News Tuesday.

Most Read from Bloomberg

Paris to Replace Parking Spaces With Trees

New York's Transit Agency Approves $9 Congestion Toll

Trump Promises Could Have Seismic Impact on Washington Economy

NY Congestion Pricing Survived a Pause. Here's What Could Kill It

In Cleveland, a Forgotten Streetcar Bridge Gets a Long-Awaited Lift

SpaceSail's Jason Jie Zheng signed a memorandum of understanding with Brazilian telecommunications company Telecomunicacoes Brasileiras S.A. to study the demand for satellite internet areas where fiber optic infrastructure doesn't work.

The MOU was struck amid President Xi Jinping's visit to Brazil. He attended the Group of 20 summit in Rio de Janeiro and on Wednesday will sign a series of agreements with President Luiz Inacio Lula da Silva in the capital, Brasilia.

Lula is looking to China to help foster Brazil's economic development. But it's a pivot that risks a clash with Donald Trump, as the US president-elect promises a harder stance against China and its push into the Americas.

Chinese investments in Brazil are moving from announcement to fruition. BYD's most extensive electric-vehicle operation outside of Asia and a local partnership with Chinese smartphone maker Oppo are just two such ventures.

In a brief interview after the event Tuesday night, Jie Zheng said SpaceSail will begin providing internet in Brazil in two years' time and will open a subsidiary in the country by the end of this year.

"Our MOU with Telebras is not only a partnership but also a shared commitment to empowering underserved regions of Brazil," he said in a speech. "By combining Telebras's expertise with SpaceSail's cutting edge solution, we aim to support Brazil's national initiative with our broadband services and digital industrial solutions and drive access to essential services like education, public health, government."

SpaceSail launched its first batch of 18 satellites into orbit in August, with a second launch of another 18 last month. That leaves 600 plus to go before the first phase of its planned constellation will be ready, targeted for the end of next year.

This week's event follows a Brazilian government tour at SpaceSail headquarters in October, just after a monthslong clash between Musk and Brazil's top court, which culminated in million-dollar fines and X being banned in Latin America's largest economy.

Starlink had its bank accounts frozen in Brazil in a bid to force X to comply with legal orders. Musk eventually gave in, the accounts were unblocked and access to the US billionaire's social media platform was restored across the country.

Starlink is the leading provider of satellite internet services, with a 46% market share in Brazil. Musk's company only holds 0.5% of total broadband market in the country, with 265,000 customers as of September.

Communications Minister Juscelino Filho denied any retaliatory link between Brazil's feud with Musk and its courtship of his Chinese rivals in the sector.

"Brazil is always with open arms to everyone who can offer quality services with fair prices and security to the Brazilian population," Filho told journalists. "Nothing in any industry is good when you only have one provider," he said.

Most Read from Bloomberg Businessweek

Jaylen Brown Is Taking On Nike With $200 Sneakers

Trump's Impossible Task: Delivering for the Working Class and Billionaires

Wall Street Is Too Pumped About Trump to Worry About His Policies

Companies With Immigrant Workforces Are Preparing for Raids

Why Tech Billionaires Love the Author of Jurassic Park