LeoSat, facing ITU deadline, restarts manufacturing competition, changes funding strategy

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PARIS — As it struggles to close a $50 million funding round, LeoSat is looking beyond design partner Thales Alenia Space for competing bids to build a smaller constellation of lighter satellites. 

LeoSat started working with Thales Alenia Space in 2014 to design a constellation of up to 108 low Earth orbit satellites intended to provide connectivity to customers willing to pay a premium for large volumes of low-latency capacity. 

Last year, under pressure from investors Hispasat of Spain and Sky Perfect Jsat of Japan, LeoSat said it intended to go back to the drawing board in order to reduce the constellaton’s projected $3.5 billion price tag to “close to $3 billon.” 

LeoSat’s revised plan is to finance its constellation with $1 billion in equity and $2 billion in debt, CEO Mark Rigolle told SpaceNews. Hispasat and Sky Perfect Jsat made equal investments of an undisclosed amount toward LeoSat’s ongoing Series A — downsized to $50 million from $100 million — but have reneged on a plan to increase their investments, forcing LeoSat to look for new investors, he said. 

LeoSat hasn’t ruled out hiring Thales Alenia Space to build its scaled-down constellation, Rigolle said, but the company also wants to gauge bids from other manufacturers as it sets out in search of new funding sources sooner than anticipated. 

Sticking with Thales Alenia Space also poses another challenge: meeting a January 2021 deadline LeoSat faces for launching at least one satellite to secure spectrum for the whole constellation through the International Telecommunication Union.

Rigolle said that deadline is tied to a Thales Alenia Space filing with the ITU, so choosing another manufacturer who’s filing expires at a later “bring-into-use” date would alleviate deadline pressure. 

“Ideally, soon we might be able to announce a deal that allows us to have our freedom, to have true open and fair competition between two or more, but probably two manufacturers,” Rigolle said. “If [Thales Alenia Space] has the best bid, then great, they win it. But they shouldn’t win it simply because they have a filing.”

Satellite operators can make ITU constellation filings themselves, but manufacturers sometimes submit their own filings in the hope of winning customers by completing some of the regulatory work for them. 

LeoSat’s original plans called for launching two demonstration satellites this year, which would have fulfilled the ITU’s requirements, but the company abandoned those plans in favor of a less expensive technology-validation effort on the ground. 

Rigolle said LeoSat has continued to refine its constellation design, lowering the weight of each satellite by “several hundred kilograms” from their original 1,250-kilogram design. If LeoSat and a manufacturing partner can slim the satellites down to 800 kilograms, an entire orbital plane’s worth of satellites would probably fit on a single SpaceX Falcon 9 rocket, further lowering costs, Rigolle said. 

LeoSat, which intends to seek competing bids for launches, likes the idea of launching an entire plane, or ring of satellites, with one rocket. Efficient launch plans and cheaper manufacturing could further reduce the constellation’s cost below $3 billion, Rigolle said. 

LeoSat wants to operate 84 satellites in low Earth orbit, split into six orbital planes of 14 satellites each. Rigolle said that architecture means two satellites would be visible from any point on Earth, including the equator. 

Rigolle said LeoSat, based on feedback from prospective customers, has doubled the planned throughput of each satellite to over 60 gigabits per second on downlink as well as uplink.

Rigolle said LeoSat is pursuing a wider range of potential investors instead of focusing on fixed satellite services operators like Hispasat and Sky Perfect Jsat. The larger telecom ecosystem is now of interest he said, with strong potential coming from the Internet of Things market. 

LeoSat is seeking funding as other LEO constellation ventures gain money and traction. This year, OneWeb raised $1.25 billion for its constellation of at least 650 satellites, SpaceX raised $1.02 billion that is expected to further its Starlink constellation of up to 12,000 satellites, and Telesat secured more than $500 million in Canadian federal funds for its constellation of around 300 satellites. 

Rigolle said the progress of other systems hasn’t soaked up funds that could have gone to LeoSat. 

“LEO is not a technology or a business; it’s a range of altitudes, and you can do different things there,” he said. “It’s like being in the trucking business or taxi business — you use roads and you have motorized vehicles, but they are different kinds of vehicles designed to do different things. I don’t know of any taxi company that competes with a trucking company.”

Rigolle said company still has $2 billion worth of letters of intent from customers ready to use the LeoSat constellation once it is operational.