Telesat swaps satellite suppliers online to save $2 billion

  • Shares of Canadian satellite operator Telesat rose on Friday after the company announced it would swap suppliers for its planned Lightspeed global internet network.
  • Telesat said Canadian aerospace firm MDA, not Franco-Italian firm Thales, will build the Lightspeed satellites, resulting in “total capital cost savings” of about $2 billion.
  • The company expects to begin launching its first Lightspeed satellites in mid-2026, with global service beginning once the first 156 satellites are in orbit.

View of the broadband constellation in low Earth orbit Telesat

Telesat

Shares of Canadian satellite operator Telesat rose on Friday after the company announced it would swap suppliers for its planned Lightspeed global internet network.

Telesat has announced that Canadian aerospace company MDA will now build the Lightspeed satellites to replace Franco-Italian Thales Alenia Space resulting in “total capital cost savings” of approximately $2 billion.

The company expects to begin launching its first Lightspeed satellites in mid-2026, with global service beginning once the first 156 satellites are in orbit. It is planned that the entire network will consist of 198 satellites.

Telesat stock rose as much as 64% in heavy early trading volumes from its previous close of $8.45 a share, before slipping slightly to nearly 50%.

“I’m incredibly proud of the Telesat team for their innovative work to drive optimization…dramatically driving costs down,” Telesat CEO Dan Goldberg said in a statement.

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Telesat stock rose on Friday after the company swapped its satellite supplier for the Internet.

The company had previously contracted Thales Alenia Space to manufacture satellites at an estimated cost of $5 billion to build the network — including about $3 billion for the satellites, plus costs for launching rockets, building ground infrastructure, and developing software platforms to power the network. .

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Goldberg previously confirmed to CNBC that Lightspeed is not intended to compete in direct-to-consumer markets against SpaceX’s Starlink or Amazon’s Kuiper. Instead, it will maintain Telesat’s current focus on enterprise customers — the government and commercial markets into which Starlink has expanded in the past year.

Telesat also reported second-quarter results on Friday, including $180 million in revenue, down 4% from the same period a year earlier. Telesat’s net income jumped to $520 million in the quarter, compared to a net loss of $4 million a year earlier — a dramatic turnaround that the company credits largely to the $260 million FCC payment to clear spectrum for 5G use in the United States.

The company has reaffirmed its full-year 2023 revenue guidance, and expects to bring in between $690 million and $710 million.

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