Telesat Lightspeed secures government funding for LEO launch

Telesat appears finally ready to deliver its Lightspeed LEO constellation. The company announced a new contract with MDA for satellite construction, as well as funding plans to bring the nearly 200 satellites into Low Earth Orbit. Total capital investment for the Telesat Lightspeed program is now pegged at $3.5 billion, shaving $2 billion off prior estimates.

MDA’s deep expertise as a LEO prime contractor, as well our own leading expertise in satellite operations and systems engineering, gives us the highest level of confidence in meeting our objectives.

– Dan Goldberg, President and CEO of Telesat

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The companies anticipate the first launches in mid-2026 and activation of service in late 2027.

Canadian federal and provincial government partners will provide the lion’s share of funding for the program, roughly $2 billion. Telesat will contribute $1.6 billion in equity, and vendor financing will round out the package to deliver the first 156 satellites into orbit, enough to deliver global coverage. At that point the company can begin to generate cashflow from the Lightspeed constellation to complete deployment of the network at 198 satellites.

Telesat also notes it has secured lower financing costs than initially anticipated. Combined with the lower capital costs, the company sees “meaningfully improved” economics for the project compared to “what were already compelling projected financial returns.”

The announced financing also more than triples Canada’s investment in its native satellite operations from a 2019 plan. The constellation was also supposed to be nearly 300 satellites at that time, not the 198 which will ultimately fly. Plus, that commitment was a capacity purchase agreement, not up front financing. By shifting the manufacturing to a Canadian company Telesat and MDA were able to convince the government of the value proposition in local investment.

In total, the company estimates a $3.5 billion price tag for the program, including 198 Telesat Lightspeed satellites, satellite launch vehicles, a global ground network of landing stations and operations centers, business and operations support systems, and expenditures to support the further development of a portfolio of user terminals for Telesat’s target markets.

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Inflight connectivity providers expect to take advantage of the new constellation, among other served verticals. Anuvu announced a major capacity commitment with Telesat 18 months ago (though, despite claims at the time, it seems that was all GEO, not LEO), for example. Multiple terminal terminal providers have also begun validation of their systems on Telesat’s LEO 1 test satellite. These include:

• Ball Aerospace (this technology is now part of the Stellar Blu Sidewinder ESA platform)
• ThinKom’s Ka2517 solution (and presumably the new Ka1717 as well)
• Gilat’s ESA, in partnership with Honeywell
• Anuvu‘s gimbal-mount antenna (but long enough ago the company was still named Global Eagle)

Which of these deals will still be viable in five years when the constellation enters service remains to be seen. And it will be nearly a decade since the first test satellite entered orbit.

But the financing is finally in place, so that’s a major win for the company.