Telesat is expanding its low-Earth orbit satellite network after landing a multibillion-dollar contract to supply satellite communications to the Canadian military in the Arctic. Telesat chief executive Dan Goldberg said this week he hopes the deal is the first of more to come from governments around the world as defence spending ramps up and demand […]
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Telesat is expanding its low-Earth orbit satellite network after landing a multibillion-dollar contract to supply satellite communications to the Canadian military in the Arctic.
Telesat chief executive Dan Goldberg said this week he hopes the deal is the first of more to come from governments around the world as defence spending ramps up and demand for the company’s services grows.
During a conference call with analysts Thursday to discuss Telesat’s second-quarter results, Goldberg said the company is in talks with a number of “sovereign customers” interested in using its state-of-the-art LEO network, dubbed Lightspeed, for defence purposes.
“We see a huge opportunity there, but we need to stay focused on executing that,” he said. “When we first started down the path of Lightspeed, the world was a pretty different place than it is today. These geopolitical shifts and some of these conflicts that are ongoing around the world have opened up this very significant opportunity for defence and sovereign requirements.”
Telesat announced last week it has signed a $2.3-billion contract to deliver secure internet connectivity to the Canadian Armed Forces in the Arctic. The agreement could ultimately be worth $2.7 billion if the government picks up a pair of five-year options that would extend the contract’s length to 15 years.
“It’s the biggest space project in Canada’s history,” Goldberg told analysts.
Telesat is also boosting the capacity of Lightspeed, adding another 69 satellites that will bring the total number of dishes in the constellation to 225. The expansion will be funded through payments from the federal government starting later this year, and the first satellites are expected to be ready for service in the first quarter of 2028.
Goldberg said the expanded capacity will allow Telesat to better serve both military and commercial customers.
“Our plans were always to have more satellites than 156,” he said, adding the new deal will allow Telesat to accelerate the construction of new dishes and add more redundancy to the network. “It was just a big win-win-win.”
Noting that Telesat originally bid on the Arctic contract in 2008, Goldberg said agreements with other countries will likely flow much faster.
“If someone had told me in 2008 it would take 18 years, I would have been surprised, but I don’t expect the opportunities that we have in the pipeline for Lightspeed to take 18 years,” he said with a chuckle.
“Given the nature of the world right now, the customers that we’re talking to, they want this capability as soon as possible. It’s always hard to handicap just how long those things will take. My expectation is by the end of next year, our backlog will be meaningfully higher.”
Telesat is banking on Lightspeed to make it a major player in the emerging market for lower-latency LEO satellites that can deliver faster and more reliable internet service to remote regions and users in harder-to-reach locations such as cruise ships and passenger jets.
While other well-heeled competitors, including Elon Musk’s Starlink, have already entered the market, Goldberg said there’s still plenty of untapped demand for LEO services.
Last week, Telesat said it expects revenues from Lightspeed customers to reach $4.9 billion by 2032, up from its earlier forecast of $3.2 billion, as geopolitical turbulence drives demand for more satellite connectivity.
“Absolutely, the Lightspeed constellation is going to grow over time,” Goldberg told analysts on Thursday. “We’re already doing a fair amount of work around here as to what our next generation of Lightspeed satellites will look like.
“We feel very good about how the business is performing, how we’re executing. The pipeline for Lightspeed is very, very significant. We are, I’d say, more bullish than ever about our prospects.”
Until Lightspeed is operational, however, Telesat’s balance sheet continues to take a hit as the company shifts its focus from traditional GEO satellite services to the new LEO constellation.
Overall revenues for the quarter ending June 30 were $79 million, a 25 per cent drop from a year earlier as legacy customers opted not to renew deals or reduced their services. The firm’s adjusted EBITDA fell 62 per cent year-over-year to $22 million.
Telesat posted a net loss of $559 million in the second quarter, compared with a profit of $76 million in the same period a year ago. Telesat said the swing was primarily due to non-cash losses associated with an increase in the fair value of the Telesat Lightspeed financing warrants and an increase in the Canadian dollar value of the firm’s U.S. dollar-denominated debt.
Telesat reiterated the GEO segment guidance it provided in March, saying it expects revenues from its GEO satellites to range from $300 million to $320 million in fiscal 2026.
