OTTAWA (Reuters) – Telesat of Canada competes to launch a constellation of low-orbit satellites (LEO) to provide global high-speed broadband from space, facing the satellite communications firm founded in 1969 against two billionaires, Elon Musk and Jeff Bezos. .
Musk, the CEO of Tesla Inc. who was only a year old when Telesat launched its first satellite, puts the so-called Starlink LEO into orbit with its company SpaceX and Amazon.com Inc., which Bezos founded, plans a LEO called Project Kuiper. Bezos also owns Blue Origin, which makes rockets.
Despite the competition, Dan Goldberg, CEO of Telesat, expresses confidence when he calls Telesat’s LEO constellation “the Holy Grail” for its shareholders – “a sustainable competitive advantage in global broadband delivery”.
Telesat’s LEO is priced much lighter than SpaceX and Amazon, and the company has been in satellite services for decades more. In addition, instead of focusing on the consumer market like SpaceX and Amazon, Telesat is looking for business customers with a big pocket.
Goldberg said he was literally losing sleep six years ago when he realized the company’s business model was in jeopardy as Netflix and video streaming took off and fiber optics ensured fast Internet connectivity.
Telesat’s 15 geostationary satellites (GEOs) provide services primarily to television broadcasters, Internet service providers and government networks, which were increasingly concerned about the latency or time delay of orbiters’ bounce signals. more than 35,000 km (22,200 miles) above ground.
Then in 2015, on a flight home from a Paris industry conference, where latency was a constant theme, Goldberg wrote his initial ideas for a LEO constellation on an Air Canada napkin. .
These ideas eventually led to Telesat’s LEO constellation, called Lightspeed, which will orbit about 35 times closer to Earth than GEO satellites, and provide Internet connectivity at a speed similar to fiber optics.
Telesat’s first launch is scheduled for early 2023, while there are already about 1,200 Musk Starlink satellites in orbit.
“Starlink will be in service long before … and that gives SpaceX a chance to win customers,” said Caleb Henry, a senior analyst at Quilty Analytics.
Starlink’s “first engine” advantage is a maximum of 24 months and “no one will block this entire market in that time,” Goldberg said.
In 2019, Telesat signed a launch agreement with Bezos aerospace company Blue Origin. Talks continue with three other people, said David Wendling, technical director of Telesat.
They are Mitsubishi Heavy Industries Ltd of Japan, ArianeGroup of Europe and SpaceX of Musk, which launches Starlink satellites. Wendling said a decision would be made in a matter of months.
Telesat aims to launch its first batch of 298 satellites built by Thales Alenia Space in early 2023, with partial service at higher latitudes later that year and full global service in 2024.
‘SWEET POINT’
The Lightspeed constellation is estimated to cost half of the $ 10 billion SpaceX and Amazon projects.
“We think we’re at the sweetest point,” Goldberg said. “When we look at some of these other constellations, we don’t get it.”
Analyst Henry said Telesat’s approach to business customers is the right one.
“You have two heavy players, SpaceX and Amazon, who are already committed to spending $ 10 billion on consumer-optimized satellite constellations,” he said. “If Telesat can spend half that amount by creating a high-performance system for companies, yes, it will be very competitive.”
Telesat’s industrial experience can also bring advantages.
“We’ve worked with many of these clients for decades … This will give us a real edge,” Goldberg said.
Telesat “is a satellite operator, has been a satellite operator and has the advantage of experience and expertise in this business,” said Carissa Christensen, executive director of research firm BryceTech, though who added that he only sees two to three surviving LEO constellations.
Telesat is restricting funding (one-third of the debt and two-thirds) and will be publicly listed on the Nasdaq this summer, and could also be listed on the Toronto Stock Exchange after that. Currently, the Public Sector Pension Investment Board of Canada and Loral Space & Communications Inc. are the company’s major shareholders.
France and Canada’s export credit agencies, BPI and EDC, are expected to be the main lenders, according to Goldberg. The provincial government of Quebec is lending C $ 400 million ($ 317 million) and the federal government of Canada has pledged C $ 600 million as a preferred customer. The company also posted a net profit of US $ 246 million in 2020.
Running the LEO plan is what keeps Goldberg awake at night now, he said.
“When we decided to follow this path, the two richest people in the universe were not focused on their own LEO constellations.”
($ 1 = $ 1.2622)
Steve Scherer’s reports to Ottawa; Edited by Matthew Lewis