Canada’s Telesat competes against Musk and Bezos in the space race to deliver high-speed broadband



© Reuters. The satellite controller Sean Sauve works in Telesat’s Ottawa offices


From Steve Scherer

OTTAWA (Reuters) – Canada’s Telesat plans to launch a low-earth orbit (LEO) satellite constellation to deliver high-speed global broadband from space. Founded in 1969, the satellite communications company competes against two pioneering billionaires, Elon Musk and Jeff Bezos.

Musk, the CEO of Tesla (NASDAQ 🙂 Inc, who was only a year old when Telesat launched its first satellite, is bringing the so-called Starlink LEO with his company SpaceX and Inc (NASDAQ :), the Bezos, into the Orbit founded, plans a LEO called Project Kuiper. Bezos also owns Blue Origin, which builds missiles.

Despite the competition, Dan Goldberg, Telesat’s Chief Executive Officer, is confident when he calls Telesat’s LEO constellation “the Holy Grail” – “a sustainable competitive advantage in global broadband delivery”.

Telesat’s LEO is much cheaper than SpaceX and Amazon, and the company has been in the satellite services space for decades. Instead of focusing on the consumer market like SpaceX and Amazon, Telesat is also looking for business customers with deep pockets.

Goldberg said he literally lost sleep six years ago when he realized the company’s business model was in jeopardy when Netflix (NASDAQ 🙂 and streaming video kicked off, and fiber optic guaranteed lightning-fast internet connectivity.

Telesat’s 15 geostationary (GEO) satellites provide services primarily to television broadcasters, Internet service providers, and government networks who are increasingly concerned about the latency or time delay in the ricochet of signals from orbiters above 35,000 km from Earth.

Then in 2015 Goldberg wrote his first ideas for a LEO constellation on an Air Canada napkin on a flight home from a Paris industry conference where latency was a constant theme.

Those ideas eventually led to Telesat’s LEO constellation called Lightspeed, which orbits about 35 times closer to Earth than GEO satellites and provides an internet connection at speeds similar to that of fiber optics.

Telesat’s first launch is scheduled for early 2023, while around 1,200 Musk Starlink satellites are already in orbit.

“Starlink will be up and running much sooner … and that gives SpaceX an opportunity to attract customers,” said Caleb Henry, senior analyst at Quilty Analytics.

Starlink’s “first mover” advantage is a maximum of 24 months and “no one is going to close the entire market during that time,” Goldberg said.

Telesat signed a start-up contract with Bezos’ aerospace company Blue Origin in 2019. Talks are ongoing with three other people, said David Wendling, Telesat’s technical director.

These are Japan’s Mitsubishi Heavy Industries Ltd, Europe’s ArianeGroup and Musks SpaceX, which is launching the Starlink satellites. Wendling said a decision will be made in a few months.

Telesat intends to launch its first batch of 298 satellites in early 2023, which will be built by Thales Alenia Space. Later in the same year, a partial service will be performed at higher latitudes and a full global service in 2024.


The Lightspeed constellation is estimated to cost half of the $ 10 billion SpaceX and Amazon projects.

“We think we are in the sweet spot,” said Goldberg. “If we look at some of these other constellations, we don’t understand.”

Analyst Henry said Telesat’s focus on business customers is the right one.

“They have two heavyweight players, SpaceX and Amazon, who have already pledged to spend $ 10 billion on satellite constellations optimized for the consumer market,” he said. “If Telesat can spend half that amount on building a high-performance system for businesses, they’ll be very competitive.”

Telesat’s industry experience can also be an advantage.

“We have worked with many of these customers for decades … that will give us a real advantage,” said Goldberg.

Telesat “is a satellite operator, has been a satellite operator and has the benefit of both expertise and experience in the business,” said Carissa Christensen, executive director of research firm BryceTech, adding that she only sees two of the three LEO constellations survive.

Telesat pegs funding – a third of its equity and two-thirds of its debt – and will be publicly traded on the Nasdaq sometime this summer. After that, it could also be listed on the Toronto Stock Exchange. Currently the Canadian Public Sector Pension Investment Board and Loral Space & Communications Inc are the company’s major shareholders.

The French and Canadian export credit agencies BPI and EDC are likely to be the main lenders, according to Goldberg. The provincial government of Quebec is awarding $ 400 million ($ 317 million) and the federal government of Canada has committed $ 600 million as a preferred customer. The company posted net income of $ 246 million in 2020.

Implementing the LEO plan is what keeps Goldberg up at night now, he said.

“When we decided to go this route, the two richest people in the universe weren’t focusing on their own LEO constellations.”

($ 1 = 1.2622 Canadian dollars)


Steven Gregory