WASHINGTON — As SpaceX prepares to extend its Starlink beta test program to Canada, Telesat remains optimistic its broadband low Earth orbit constellation will find enough business to be successful.
Telesat announced Nov. 9 that it finalized an agreement with the Canadian government to provide subsidized broadband internet services to rural communities in the country. The government will pay Telesat $600 million Canadian ($460 million) over 10 years, and Telesat will, in turn, offer a “dedicated pool” of broadband capacity for rural communities at “greatly reduced rates.”
Telesat will start receiving that funding once the Telesat LEO constellation enters service. However, the company has yet to select a manufacturer for those satellites, let alone start deploying them. In an Oct. 29 earnings call, Telesat Chief Executive Dan Goldberg said the company should make “some announcements” about satellite manufacturers before the end of the year.
Michael Schwartz, senior vice president for corporate and business development at Telesat, confirmed that schedule during a Nov. 10 panel discussion at Euroconsult’s World Satellite Business Week Virtual Edition conference. “We’ve spent a lot of time designing it. We’ve burned down a lot of risk,” he said, including work on both hardware and software.
“Our next big milestone coming up, later this year, will be to announce our vendor relationship to start to manufacture the constellation,” he said.
Schwartz said he was not concerned that a delay in deploying the constellation put at risk an International Telecommunication Union requirement to have at least 10% of its 298-satellite system in orbit by February 2023. The company is “completely confident” it can meet that deadline, and even if it does not, he said he believes Telesat can get that requirement waived by demonstrating it has active contracts for building and launching satellites.
By contrast, SpaceX has been rapidly deploying its Starlink broadband constellation, with more than 800 satellites currently in orbit. The company launched 180 satellites on three Falcon 9 missions in October alone.
SpaceX has also started a beta test of the Starlink constellation for customers in the northern United States. Participants pay $499 for the Starlink antenna and router, and $99 per month for the service. “The response has been super positive,” said Jonathan Hofeller, SpaceX vice president for Starlink and commercial sales, during the panel. “People are getting excellent speeds and excellent latency.”
SpaceX is preparing to expand that beta test north of the border. Industry, Science and Economic Development Canada announced Nov. 6 that it had granted regulatory approval for SpaceX to operate the Starlink system in the country. The company secured a separate approval from the Canadian Radio-television and Telecommunications Commission in October.
“We are going into new countries. We just received our initial license from Canada to start providing service in Canada,” Hofeller said. He didn’t state when those services would begin.
SpaceX has been taking the direct approach to selling its services to customers, rather than going through resellers. “We can provide the most value to consumers. We can get direct feedback with no filter on that, so we can continuously improve our product,” he said. However, as the company expands internationally, he said SpaceX is “keeping an open mind about potential relationships with third parties.”
Schwartz said Telesat was not deterred by the head start that Starlink will have, including on his home turf. “We always expected competition. We didn’t build a business case that said we’ll have the only service of our type in the market,” he said. Not every company will be successful, he argued, “but we think more than one company will be.”
That competition includes OneWeb, although its specific plans for providing services under its new owners, the British government and Bharti Global, remain unclear even to companies it has been working with, such as Iridium. OneWeb and Iridium signed a memorandum of understanding in September 2019 to jointly market services that the two companies said were complementary.
Matt Desch, chief executive of Iridium, said on the panel he was uncertain about that status of that agreement, given that OneWeb remains in Chapter 11 bankruptcy. “I don’t know, to be honest with you, because I don’t know who OneWeb is,” he said. “They’re still resetting themselves as a company.”