Telesat LEO Constellation
Telesat is taking its time selecting a contractor for its Telesat LEO broadband system. Credit: Telesat

WASHINGTON — The two contenders to build Telesat’s constellation of broadband satellites have nearly finalized their designs and will submit proposals in the coming months, Telesat CEO Dan Goldberg said May 2.

Airbus Defence and Space and a Maxar Technologies-Thales Alenia Space team are competing for a contract worth an estimated $3 billion. Goldberg said the companies are at the end of a nine-month study focused on how the satellites would be built and interoperate with ground systems once in orbit.

“Next up would be getting commercial proposals from both of these prospective suppliers,” Goldberg said during an earnings call. “My expectation is that will happen at some point over the course of this summer.”

Goldberg said Telesat needs those proposals before it can accurately gauge the cost of deploying the low Earth orbit satellite system. While Telesat envisions the constellation will number 292 satellites, it hasn’t said how many it will initially order.

Erwin Hudson, vice president of Telesat LEO, said last year that the constellation has “natural break points” at 112 satellites and 192 satellites before reaching 292. Telesat may ultimately grow the constellation to 512 satellites, he said.

Goldberg didn’t say when Telesat would select a manufacturer. Hudson had said a decision was expected during the second quarter of 2019.

Telesat plans to have the constellation in service in 2022. Airbus and the Maxar-Thales Alenia Space team have said they’re willing to establish factories in Canada to build the satellites. Telesat is based in Ottawa, Canada’s capital city.

Telesat has signed multiple-launch agreements with Blue Origin for the heavy-lift New Glenn and with Relativity Space for its Terran 1 small launch vehicle, but hasn’t specified how many satellites each company will launch.

As Telesat prepares to select a manufacturer, it is also planning how it will finance the constellation. Goldberg said financing options include “cash that we have on the balance sheet, cash flow that we generate at Telesat, potential additional equity raise and then other debt borrowings.”

Telesat had 846.4 million Canadian dollars ($628.6 million) in cash and cash equivalents on hand as of March 31. The company reported a quarterly net income of 172 million Canadian dollars on revenue of 222 million Canadian dollars.

Telesat is also interested in using export credit agencies to “finance a portion of the total expenditures for the constellation,” he said.

Export credit agencies in France, Canada, and until 2015, the United States, have consistently supported satellite projects. The U.K.’s agency, U.K. Export Finance, has also stepped up its involvement recently with a $325 million loan to Turkey for two satellites Airbus Defence and Space is building partly in the United Kingdom

The U.S. Ex-Im Bank has been less active following its six-month charter lapse in 2015 and its continued lack of a quorum needed to finance deals over $10 million.

In March, Telesat announced one of its LEO trial partners, maritime connectivity provider OmniAccess, signed a contract to be the first customer for the constellation. Goldberg said the take-or-pay contract is “consistent with the types of contracts” Telesat typically signs, and that future contracts should be similar.

“That’s our expectation about how this LEO business will proceed: we will continue to do business with a lot of the same companies that we do business with today and that we’ve been doing business with for a long time,” he said.

Telesat has launched two geostationary high-throughput satellites in the past 12 months, Telstar-18 Vantage and Telstar-19 Vantage, and is adding customers to those spacecraft. Last month, the company announced contracts with Indonesian telecommunications service provider PT iForte Solusi Infotek for Ku-band and C-band capacity on Telstar-18 Vantage.

Goldberg said Telesat is also providing some capacity to Intelsat to cover for its April 7 loss of the Intelsat-29e satellite. Goldberg said Telesat is only providing a small amount of capacity and he doesn’t expect that will increase significantly. Intelsat’s main backup partner is SES through a reciprocal agreement the companies signed prior to the satellite’s failure.

Caleb Henry is a former SpaceNews staff writer covering satellites, telecom and launch. He previously worked for Via Satellite and NewSpace Global.He earned a bachelor’s degree in political science along with a minor in astronomy from...