Phase 1, Telesat’s first LEO satellite that launched in 2018, was supplied by SSTL. Credit: Telesat

TAMPA, Fla. — Telesat remains committed to developing its Lightspeed low Earth orbit (LEO) broadband constellation despite ongoing delays to cover the project’s rising costs, CEO Dan Goldberg said March 29.

The Canadian company, an operator of more than a dozen geostationary satellites, had hoped to know where it stood with investors and France’s export credit agency for fully financing Lightspeed before the end of 2022.

“Unfortunately, we’re not there yet,” Goldberg said during Telesat’s financial results call.

“That said, we continue to make progress with the various parties we’re engaged with, and we remain optimistic that we’re going to secure the financing we need to move forward with the program, recognizing, of course, that there’s no assurance that we’ll ultimately get there.”

He declined to give an updated timeframe for financing the project’s nearly 200 satellites.

Telesat has so far lined up about $3 billion of financing for Lightspeed through existing financial resources and funding from the Canadian government.

That represented about two-thirds of Lightspeed’s total budget before inflation and supply chain issues at prime manufacturer Thales Alenia Space pushed costs up by at least $250 million.

Deployment delays

Pandemic-related manufacturing issues have also pushed out Lightspeed’s service debut to at least 2026, Telesat said in May 2022 during its last update on the constellation’s deployment schedule.

Goldberg did not discuss launches during the financial results call. Telesat has previously outlined early agreements with Blue Origin and Relativity Space to deploy the constellation — neither of them is yet in service.

The deployment delays also mean Telesat will need to obtain extensions from regulators to keep hold of its priority Ka-band spectrum rights. 

Goldberg declined to comment on the regulatory process, but said he is “pretty confident that when we’re ready to move forward with Lightspeed, we’re going to have the regulatory rights we need around the world to provide the services that we need to provide.”

Despite delays that have pulled Lightspeed further behind rivals Starlink and OneWeb, and potentially put it in the same timeframe as Amazon’s Project Kuiper roll-out, he said Lightspeed’s “original investment thesis is totally intact.” 

Goldberg said “if anything, I’m just more and more convinced of that” as he pointed to how Starlink has been used to maintain communications during Russia’s war in Ukraine. Lightspeed has also already secured “something like” 750 million Canadian dollars ($555 million) in customer commitments.

GEO limbo

Telesat has decided not to order any replacement geostationary satellites this year while it works to get Lightspeed into production.

In a regulatory filing, the company said it intends to provide service continuity for customers on some of its geostationary by moving them to the Lightspeed constellation. 

“Given that the entry into service of our Lightspeed constellation has been delayed, we may be unable to provide many of our customers on satellites nearing their end of life with continuity of service,” Telesat disclosed in the regulatory filing.

“If we are unable to provide continuity of service to our customers by extending the life of such satellites, providing alternate capacity on other satellites, including our Lightspeed constellation, our revenue would decline.”

Telesat reported 759 million Canadian dollars in revenue for 2022, which was stable compared to 2021 but down 2% when adjusted for foreign exchange rates.

Adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, fell 5% to 568 million Canadian dollars — or down 8% when accounting for foreign exchange rates.

Telesat said it expects to invest between 40 million and 70 million Canadian dollars this year on Lightspeed, although this could increase if it finalizes the project’s financing and construction program. 

Jason Rainbow writes about satellite telecom, space finance and commercial markets for SpaceNews. He has spent more than a decade covering the global space industry as a business journalist. Previously, he was Group Editor-in-Chief for Finance Information...