May 15, 2020: China is seeking to monetize its Beidou ("Compass") satellite navigation (satnav) system. Beidou is the Chinese version of American GPS (Global Positioning System). Beidou finally became fully operational, providing worldwide coverage, in January 2020 when the last two of its Beidou satellites were put into 21,800 kilometer high circular orbits, joining 22 others in similar obits covering the entire planet, plus six more in 36,000 kilometer high geosynchronous (stationary) orbits. Two more satellites will go up in mid-2020 but these simply complete the planned Beidou satellite system. The three competing systems are GPS, Glonass and Galileo. The full Beidou network was open for business as a world-wide service in early 2020. The American GPS has been operational since 1978 while the Russian GLONASS achieved that status in 1995. Unfortunately, Russia had problems, mostly financial, in keeping Glonass operational. The European Galileo becomes operational worldwide in 2020. Each of these systems cost about $10 billion to create and get into service. The American GPS cost $12 billion, mainly because it has been around for so long.

China, however, is determined to do what none of the other three satnavs have done; break even and make a profit. While China has stated that as an objective they have yet to come up with a plan to reach that goal, nor have any of the other three major satnav providers. So far the main payoff for building a satnav system is national prestige and an alternative to dependence on the Americans, or any single satnav provider.

China has also invested heavily in trying to obtain favorable press coverage for Beidou and somehow establish it as a preferred satnav service. That has cost over half a billion dollars but has not created any widespread sense that Beifou is preferable to GPS. China has a long-range plan for Beidou that includes adding new features and somehow achieve market dominance by 2040. Details will be made available once they have been created. So far no luck sorting that out.

Meanwhile, Chinese state-controlled media have provided a global audience with unprecedented details of this Chinese technological effort. People got their first experience with Beidou in late 2012 when the first few satellites were made available to anyone with a Beidou receiver. China expected Beidou to become a major competitor for the existing global navigation systems, at least with civilian users. China made it clear its initial goal was to grab a major share of the satnav market from the original U.S GPS system and do it by 2030. Progress has been slow so far.

Meanwhile, it has been a struggle to get Beidou fully operational. In 2013 China had only 14 of 35 Beidou satellites in service. This was sufficient to provide GPS type service for all of China. It was expected that all 35 satellites (including spares) would be in service by 2019 and so it was, with a few weeks to spare. By early January the now completed system had been checked out and declared fully operational. The worldwide reaction was something along the lines of, “so what.”

In 2008 China decided to expand its original Beidou 1 regional satnav system to cover the entire planet and compete with GPS, Galileo and Glonass. China has used the experience from this earlier Beidou 1 network to build the world-wide "Beidou 2" system. Since 2000 China has launched 53 Beidou satellites, including prototypes, replacements and various test models. The last two Baidu satellites were carried aloft by a single Long March 3B rocket. China put 30 satellites into orbit in 2019, more than any other nation. During 2019 only two satellites failed to achieve orbit, for a success rate of nearly 98 percent.

The Chinese Compass network incorporates the best features of the Glonass and Galileo systems, as well as items planned for the next generation American GPS satellites. With all that, no one has found a way to make a buck off a network of navigation satellites, at least not directly. There are plenty of ideas but no one has yet turned any of those ideas into cash. Moreover, there are disputes between the Beidou, Galileo, and Glonass organizations over who should use what frequencies. Since GPS got into service first no one is contesting the frequencies GPS uses. But the three other players have some problems.

The success of the original GPS satnav system has generated all this competition. But so far these other efforts have found the work much more difficult than expected. A European consortium went forward with Galileo despite growing costs and technical problems. Initially Galileo was to be funded with private money. But the costs climbed beyond the most optimistic estimates of future income, so now Galileo is being paid for with tax dollars, as was GPS and the competing Russian and Chinese systems.

Galileo came about because the Europeans didn't like being dependent on an American system and didn't believe the Russians would be able to keep their Glonass system viable. Galileo became operational because the European nations were willing to pay for a system that anyone could use without charge. Dual signal (GPS and Galileo) receivers cost about 20 percent more than GPS only receivers. Having two separate sets of signals makes for more reliable and accurate receivers. Also, the way Galileo is being set up, it will provide improved reliability in higher latitudes and in built-up areas.

Russia's answer to GPS, Glonass, was at full strength (24 satellites) in 1996, shortly after the Cold War ended. But the end of the Cold War in 1991 meant the end of the regular financing for Glonass. Maintaining the system required launching replacement satellites every 5-7 years. By the end of 2002, only seven Glonass birds were still operational. However, the Russian economy recovered and provided funds for a series of launches in 2003 that increased the number of active satellites to twelve. That went to 18 by the end of 2007 and Russia had 24 Glonass satellites in orbit by 2011 with the system again fully operational by 2012. As a result, Glonass was the first real competitor for GPS. However, Glonass was not completely functional until 2016 because of delays in building all the ground control stations.

The money for Glonass is coming from a Russian government that does not want to be dependent on the American controlled GPS system. But the money is only there because of high oil prices. Most Glonass receivers in use are actually combined GPS/Glonass receivers. Russia will have to put billions of dollars into Glonass over the next few years to keep the system fully operational and then spend even more money to maintain the satellite network. Glonass is widely used in conjunction with GPS. In other words, many systems, including cell phones that already used GPS, added Glonass and Galileo to provide better coverage and fewer instances where the signal was unavailable.

Beidou is a more restricted system. Services available to anyone are less accurate than other systems but Beidou also has a special (more accurate and allows messaging) military mode that is only available to the Chinese and Pakistani military. China will make an effort to monetize its GPS service, which really would make it unique compared to the others but few nations are willing to pay for a “military grade” satnav service provided by China. It will take more than a multi-billion dollar propaganda effort to chance global suspicion of Chinese motives and reliability in such matters.