Telesat reaches $3B agreement with French-Italian firm to build LEO satellite fleet

Dan Goldberg
Dan Goldberg is CEO of Ottawa-based Telesat. File photo

Telesat said Tuesday it has agreed to a US$3-billion deal that will see European manufacturer Thales Alenia Space build its fleet of nearly 300 low-Earth orbit satellites ​– a project that will pave the way for the Ottawa firm’s customers to deliver high-speed internet to the farthest reaches of the globe.

As it prepares to go public later this year, Telesat is investing heavily in its ambitious plan to deliver 298 LEO satellites into space within the next few years. Stationed between 1,000 and 1,300 kilometres above Earth, the satellites are designed to deliver broadband internet speeds comparable to those offered by fibre-optic networks.

“Demand for broadband connectivity is surging around the world,” Telesat CEO Dan Goldberg told reporters during a virtual news conference Tuesday morning. 

“We needed to bring a network to the market that was much more capable to meet our customers’ requirements.”

Unlike some of its high-profile competitors, Telesat’s cutting-edge satellite constellation – dubbed Lightspeed – won’t deliver broadband connectivity directly to consumers. Instead, it will provide “backhaul” connections to enterprise customers such as internet service providers, airlines and cruise ship operators, who will then send the signals over their own networks.

Telesat chose Thales Alenia as its manufacturing partner after a competitive bidding process. The French-Italian firm’s parent company, Thales Group, has extensive operations around the world and employs more than 450 people at its Ottawa office.

Global coverage by 2024

Goldberg called Thales Alenia a “world-class” partner that will manufacture an end-to-end network. He said the first Lightspeed satellites are expected to launch within the next two years, with full global coverage likely to be attained in the second half of 2024.

While acknowledging that Telesat is entering the LEO field later than some of its bigger and better-known competitors such as Elon Musk’s Space Exploration Technologies Corp. – which has already launched more than 1,000 low-Earth satellites as part of its Starlink constellation – Goldberg said he’s confident the Ottawa company will quickly make up for lost time.

OBJ’s 2019 CEO of the Year said Telesat’s satellites will be capable of delivering ultra-high-speed service at a price cheaper by “an order of magnitude” than current networks.

“We feel good about when we’ll be coming to market,” he said, adding that Telesat’s solution will provide “a vast competitive advantage for the enterprise segments relative to anything else that’s going to be out there.” 

Goldberg said he expects the deal to close before the firm goes public on the Nasdaq, which is slated to happen this summer. He said Telesat is also eying a listing on a Canadian stock exchange.

The CEO assured reporters the company is well on its way to securing the necessary financing for the agreement. 

In addition to raising capital through its IPO, Telesat is hoping to land funding from France’s export credit agency, Bpifrance Assurance Export, as well as Export Development Canada, Goldberg told the Globe and Mail on Tuesday. 

Last November, he told OBJ the company also aims to bring in up to $500 million through auctioning off its portion of the “C-band” radio spectrum in the U.S. to wireless carriers that will repurpose it for 5G networks. 

Goldberg said Telesat has been “ramping up” its local operations in preparation for the project. The firm has hired nearly 100 new employees since the beginning of 2020 and is “expecting an even greater number of new hires for this year,” he said, adding most of those new workers will likely be based in Ottawa.

Telesat, which already occupied all of the 20th floor in the Place Bell building at 160 Elgin St. and leased part of the floor above, took over the rest of the 21st floor late last year. Goldberg said Tuesday the company is looking at adding to its downtown footprint and will also expand in other locations as production shifts into high gear.