News Analysis | Telesat’s deliberate pace to LEO broadband

by

“We will sell no wine before its time” — Paul Masson, 1978

Compared to the rapid-fire tempo of SpaceX Starlink and OneWeb’s upcoming return to launch operations in December, Telesat’s pace to build a global LEO broadband constellation is glacial. It still hasn’t selected a satellite manufacturer, a task it expected to complete over a year ago and now may do by the end of this year, CEO Dan Goldberg said las week.

Why the delays? “A competitive procurement process on a highly complex LEO network takes time,” Erwin Hudson, vice president of Telesat LEO, said via email. “While we wish it could have been faster, in the end we believe our final outcome will be a superior LEO design at attractive price points.”

A conservative, no-hurry approach to LEO broadband may be the only sane way to do so without courting bankruptcy, a bad outcome for a company 37% owned by the Public Sector Pension Investment Board of Canada. Some analysts, such as Tim Ferrar of TMF Associates, are generally skeptical of the financial viability of any LEO broadband constellation scheme while even ultra-optimist Elon Musk recognizes the ignoble financial history of past efforts such as Iridium and Teledesic, not to mention the more recent troubles of LeoSat and OneWeb.

Telesat has done much more than PowerPoint work, spending “well in excess of $100 million” so far on LEO according to Hudson, including two pathfinder satellites, investments in demonstration campaigns and related hardware, new hires, and “schedule protection agreements with key vendors in order to maintain our timelines” including long-lead hardware. Financing includes a combination of cash on hand, C-band clearing payments, export credits from Europe and North America, and maybe-possibly-perhaps an IPO down the road — a much more comfortable fiscal footing than anyone else in the game beside Amazon.

Can Telesat get 30 satellites built and launched by a Jan. 1, 2023 International Telecommunication Union deadline while remaining conservative? Under ITU spectrum rights milestones for LEO constellations, Telesat must have 10 percent of its 298 satellites in orbit by then. Hudson says the company is “confident” it will make that milestone and if it misses, Telesat LEO would qualify for a waiver.

Still, the clock is ticking faster toward an absolute go/no-go point for manufacturer selection. Telesat’s LEO spacecraft are larger, more complex platforms than Starlink’s or OneWeb’s, massing 800 kilograms per satellite and incorporating optical crosslinks on production hardware — a first in the commercial world. If Telesat selected a manufacturer by end of year, the winner would have to build, test, and ship an initial run of 30 satellites to a launch site within 18 to 22 months for a late 2022 launch. It’s possible but there’s not a lot of margin for error.

The other question Telesat faces is who will put its satellites into orbit. Blue Origin’s New Glenn is scheduled for first flight in 2021 from Cape Canaveral, but would need to build new facilities at Vandenberg, since Telesat wants its first 78 satellites in polar orbits. United Launch Alliance and SpaceX arguably are better positioned for early Telesat LEO launches since both are already up and running at Vandenberg.

When Telesat finds exactly what it wants, it will build a LEO broadband network it believes will be substantially profitable. If it doesn’t, don’t be surprised to see the company write off over $100 million in sunk costs because it would rather take a large loss than move forward with what it perceives as too much risk.

Doug Mohney is a reporter and analyst writing about the IT and satellite industries for over 20 years.