Telesat lands $109M provincial contract to provide high-speed rural connectivity

Dan Goldberg
Dan Goldberg

Telesat has signed a $109-million contract with the Ontario government that will see the Ottawa-based satellite equipment manufacturer help deliver high-speed internet service to rural areas of the province.

Under the five-year deal, the firm’s new low-Earth-orbit satellite constellation, dubbed Lightspeed, will provide dedicated bandwidth for broadband internet connectivity and 5G networking capacity to service providers, including Indigneous-owned companies, as well as mobile network operators at reduced rates.

Thanks in part to the new funding, Telesat says it plans to boost its headcount in Ontario by up to 35 per cent to about 400 workers. The firm also announced it will spend $20 million to expand its Ottawa headquarters and build a new satellite signal transmission station near Hanover, northwest of Toronto.

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Stephen Hampton, Telesat’s manager of government affairs, said the company aims to play a “fundamental role” in expanding high-speed internet service to all parts of the province.

“I think the pandemic has really shone a spotlight on the fundamental importance of access to the internet,” he said, adding the new deal will put Ontario “at the forefront” of cutting-edge satellite technology such as Telesat’s LEO constellation.

“It really is becoming kind of this global space race to see who’s going to lead the new space economy.”

The new partnership is just the latest in a flurry of moves Telesat has made over the past few years as it looks to take a leading role in delivering the internet to customers that currently don’t have access to broadband services.

In the summer of 2019, the federal government announced it would pay the company $600 million as part of a decade-long deal to provide bandwidth at reduced rates to remote areas of the country such as the Far North.

CEO Dan Goldberg said then Telesat expects to generate an additional $600 million by selling bandwidth to telecommunications firms and internet service providers at below-market prices with the caveat that the new capacity be used to serve Canadians in rural and remote areas.

Earlier this spring, Goldberg said Telesat has made “significant progress” on the multibillion-dollar Lightspeed project, signing major deals with key suppliers Thales Alenia Space and MDA while announcing plans to raise US$500 million in a recent secured note offering.

Goldberg said the firm was looking to finalize financing for the project in the coming months. The satellite network’s operations hub will be headquartered in Gatineau at a facility that’s expected to employ nearly 300 people. 

In a bid to raise additional funding, Telesat has said it plans to go public on the Nasdaq later this year and hopes to bring in up to US$344 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.

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