Telesat has chosen French-Italian aerospace manufacturer Thales Alenia Space to build its constellation of low-Earth orbit satellites, a US$5-billion project that will beam high-speed internet to remote areas.
The system, dubbed Lightspeed because it promises speeds comparable to those provided by fibre-optic networks, will comprise 298 satellites in an orbit roughly 1,000 kilometres above the Earth, as well as a ground network.
Chief executive officer Dan Goldberg said Ottawa-based Telesat awarded the US$3-billion manufacturing contract to Thales Alenia Space, after a competitive bidding process, because of the company’s experience building advanced satellite-based communication networks.
“What we’re buying from them is more than just a bunch of satellites; they’re delivering an end-to-end network, and they’re good at that,” Mr. Goldberg said in an interview.
The manufacturer’s likelihood of securing financing from Bpifrance Assurance Export, France’s export credit agency, was also a consideration, Mr. Goldberg added: “We do believe that the French export credit agency will provide funding as part of this contract.” He expects that Export Development Canada, the Canadian export credit agency, could also provide capital.
Telesat is still finalizing the financing for the project, which will come from a mix of equity and debt. The company is slated to go public on the Nasdaq Stock Exchange in the second or third quarter of this year and is considering a Canadian listing as well.
Telesat is currently owned by the Canadian pension fund Public Sector Pension Investment Board (PSP Investments) and Loral Space & Communications Inc., a holding company that trades on the Nasdaq. A deal reached between the two owners will see Telesat Canada and Loral become subsidiaries of Telesat Corp., a new, publicly traded company. Telesat is considering issuing new shares when the deal closes.
Telesat plans to start launching the Lightspeed satellites in two years and to begin offering service in Northern Canada by the end of 2023, with full global coverage in the second half of 2024.
That puts it behind Elon Musk’s Space Exploration Technologies Corp. (SpaceX), which has launched more than 1,000 satellites for its Starlink constellation and has already begun offering service to residents in some parts of Canada.
Other competitors in the low-Earth orbit, or LEO, industry include British-based OneWeb, which has restarted its own satellite project after emerging from bankruptcy proceedings with US$1-billion in fresh capital, and tech giant Amazon.com Inc., which is planning a satellite constellation called Project Kuiper.
Although SpaceX has a head start on Telesat, Mr. Goldberg noted that the two companies are going after different markets.
“They’re fundamentally going after the consumer broadband market,” Mr. Goldberg said, noting that Starlink has built its system to beam internet directly into customers’ homes.
Telesat, in contrast, has designed its system to provide connectivity to telecom providers, governments and the aerospace and maritime industries.
“We’re talking about gigabits of capacity to remote communities, cruise ships, planes – it’s a different value proposition,” Mr. Goldberg said.
Although Telesat isn’t directly serving customers – it will provide so-called backhaul connectivity to telecom carriers, which will then transmit the signal to their customers through ground-based networks – Mr. Goldberg says he expects that the service will be considerably cheaper for residents in remote communities than Starlink’s. (Starlink currently charges $129 per month for the service, plus $649 before tax to buy the dish and other equipment, according to media reports and posts on the online platform Reddit. The company will only disclose their rates to customers who apply for service.)
“We would never have moved forward with such an ambitious program if we couldn’t deliver not only a higher quality service but also at much more affordable rates,” Mr. Goldberg said during a press conference Tuesday.
Hervé Derrey, president and CEO of Thales Alenia Space, called the constellation “the most technically advanced space network to be ever built.” Once production ramps up, the company expects it will be able to produce one satellite per day.
Telesat is also awaiting news from Ottawa on whether it will be compensated to vacate spectrum – airwaves used to transmit wireless signals – that the federal government wishes to repurpose for the coming wave of 5G wireless services. Mr. Goldberg said he’s “cautiously optimistic” that Telesat will get paid to clear the airwaves.
Telesat has received $85-million in research and development funding from the federal government. It has also secured an additional $600-million from Ottawa to support the delivery of broadband over the next decade. Thales and its affiliate, Telespazio, a European satellite services company, have also committed to purchasing some broadband capacity from Telesat’s Lightspeed constellation as part of the manufacturing deal.
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