Telesat announces “game-changing” supply deal with MDA, releases Q2 results

Satellite communications company Telesat Corp. has struck a deal with aerospace manufacturer MDA Ltd. to supply satellites for its planned Lightspeed constellation, it announced last Friday, shortly after releasing its second-quarter results. Switching from its previous supplier Thales Alenia Space, the low earth orbit (LEO) satellite internet program is now projected to cost US$2 billion less than previous estimates, at a total cost of about US$3.5 billion. “The game-changing development here is the digital beam forming antenna that MDA has developed," said CEO Dan Goldberg in a call with analysts. MDA was originally contracted just to build analog antennas for the satellites, but after continued development of its more efficient digital antenna and integrated digital processor, Telesat opted for MDA to build the whole 198 satellite constellation. According to Goldberg, the digital antenna has a better link to user terminals and can create roughly triple the number of beams compared to its analog counterpart, meaning fewer antennas and smaller satellites. “Smaller satellites almost always mean less costly satellites, and that’s certainly the case here,” he said. Through a combination of the company’s equity contributions, vendor financing, and funding from Canadian federal and provincial governments, Telesat Lightspeed is now fully funded for its first 156 satellites, which Goldberg stated will give it global coverage. Satellite launches will begin in mid-2026 with global service scheduled for late 2027. Once it gets up and running, cash flows from the service will fund the remaining 42 satellites to be added to the constellation. For the quarter ended June 30, 2023, Telesat reported a revenue decline of 4 per cent, down to $180 million from the previous year’s $187 million. Profits, however, shot up to $520 million in Q2 this year compared to last year’s loss of $4 million. Telesat attributed this increase to proceeds made from accelerated relocation payments from the U.S. Federal Communications Commission, after the company cleared its C-band spectrum activities in the 3.7 GHz band six months in advance of the deadline. “I am pleased with our financial and operating performance for the second quarter and first half of the year,” stated Goldberg in the company’s earnings release, noting that Telesat is on track to meet its goal of full year 2023 revenues between $690 million and $710 million. -- Reporting by Phalen Tynes-MacDonald at pcreed@thewirereport.ca and editing by Jenna Cocullo at jcocullo@thewirereport.ca.

Telesat announces “game-changing” supply deal with MDA, releases Q2 results

News | August 14, 2023

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