Telesat finalizes funding for the Lightspeed constellation

WASHINGTON – Telesat plans to finalize funding for its Lightspeed broadband constellation in the coming months, as well as contracts to launch the fleet of nearly 300 satellites.

Telesat chose Thales Alenia Space on February 9 as prime contractor to build the constellation of satellites in low earth orbit. The contract, which includes network management software and the integration of satellites with gateways, was valued at $ 3 billion, with Telesat estimating the total cost of the system at $ 5 billion.

At a LEO Satellite 2021 Digital Forum session on April 6, Dan Goldberg, President and CEO of Telesat, confirmed the total cost of $ 5 billion to Lightspeed. The system will be financed by a mixture of debt and equity, 60% of the financing from debt and 40% from equity.

“We’re almost done on the journey to put the funding in place,” he said. “I think it will be done in the next few months.”

He proposed a similar timeline to finalize plans to launch the constellation. The company has a contract with Blue Origin announced over two years ago for an unspecified number of New Glenn launches. This also has a contract with Relativity Space for launches on its small Terran 1 launcher orbit individual satellites to fill gaps in the system.

Telesat seeking to launch Lightspeed launches in 2022, but New Glenn isn’t expected to debut until at least Q4 2022, Telesat will likely work with other launch companies. “We are also well engaged with other launch vendors at this time,” Goldberg said. “In the coming months I think we’ll be able to make some announcements.

Among the major operators of geostationary telecommunications satellites, Telesat has been the most aggressive in the pursuit of a LEO constellation. While SES has its O3b satellite system in medium earth orbit, Telesat’s Lightspeed will be much larger and directly compete with new entrants like SpaceX, OneWeb and Amazon’s Kuiper Project.

Telesat focuses on several markets for Lightspeed, including backhaul services for mobile network operators and Internet service providers, aviation and marine connectivity, and government customers. “We see huge growth in this, as long as you bring the right value proposition to the market,” he said. “What these verticals are looking for are meaningful, fast and affordable connections. We believe it is essential that they are low latency.

These requirements, along with a desire for “ubiquitous” connectivity, including in the polar regions, have led Telesat to a LEO constellation. “We think we will meet these sets of requirements,” he said. “We are very optimistic about our opportunities. “

When asked if Telesat had pursued a LEO system for fear of becoming less relevant if it had continued to be only a GEO operator, Goldberg hesitated before answering. “I think this is something we need to do,” he finally said, based on his analysis of how the broadband market is growing and how best to serve it. “For us, you inevitably land at LEO.”

Telesat, he added, is not abandoning GEO, citing its strengths in other markets, such as direct-to-home television (DTH). “I don’t think LEO will deliver better DTH anytime soon,” a timeframe he defined as a decade or more. “The DTH business, as we know it today, is going to be around for a while, and that is very, very well served by GEO.”

However, he sees future growth coming from broadband services originating from LEO. “I think LEO is going to be the predominant architecture, but I don’t think that will happen overnight,” he said. “There is going to be a transition. This transition almost always takes longer than expected.

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