This is the first low orbiting, networked satellite project, which will orbit 1,000 km above the ground, state-owned China Aerospace Science and Industry Corporation (CASIC) said.
"The network is a general satellite platform," said Bei Chao, a CASIC engineer.
Small satellites are easy to mass produce and upgrade at low cost.
The project is a part of China's effort to give wider push to commercial space development.
Low orbit helps avoid signal delay and satellite communication services with frequencies from 26.5 to 40 hertz improve Internet access.
The project plans to send the first satellite before 2018, and launch four more by 2020 to form a constellation.
By the end of the 14th Five-Year Plan (2021-2025), all 156 satellites will be in operation, state-run Xinhua news agency reported.
CASIC launched an experimental satellite 'TK-1' early this month, featuring high-carrying efficiency and adaptability.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)