LEO market booming, Telesat says in Q3 reporting

Telesat Inc. celebrated good news in its third quarter results. It has the money it needs for its Lightspeed satellite constellation and posted positive fiscal numbers. Lightspeed is the satellite network which will operate in Low Earth Orbit (LEO). “Q3 was eventful with our biggest news that we closed the funding for Lightspeed toward the end of the quarter,” president and CEO Dan Goldberg reported on an analyst call on Nov. 14. Net income was $68 million in Q3 2024 compared to a loss of $4 million in 2023. Consolidated revenue was $138 million, down $37 million or 20.9 per cent from a year earlier. Operating expenses were also down, registering at $46 million from $50 million in Q3 2023. The CEO said he was pleased with the progress the company is making and predicted staffing would increase. Later on in the call, CFO Andrew Browne estimated the workforce would rise from the current 500 workers to a new total of 700 employees. LEO is proving popular with customers, Goldberg stated. He sees the marketplace booming. “So clearly the user community–not a shock to Telesat, that’s why we’re building Lightspeed–sees huge benefits from moving to LEO so I think that most communication service providers across all these different verticals are looking for ways to leverage LEO right now,” he asserted. He also announced Telesat has sold its Infosat subsidiary. There were warning signs about two customers, one in Canada and the other in the United States. Xplore Inc. and Telesat have renegotiated their contract due to monetary pressures on Xplore. The new contract will expire in the third quarter of next year. EchoStar Corp., owner of the American satellite network Dish, is cutting back on its reliance on Telesat satellites. Future revenues will be about one-third of current money, Goldberg said. The CEO was asked about competition from Space Exploration Technologies Corp. (SpaceX) and its Starlink subsidiary, which is making inroads in the satellite market. “Starlink is a great service. It’s why they’re getting so much traction in the market,” he conceded. “It’s why they’re being so impactful. It’s a great service today and it will be getting better.” That said, Goldberg stated that users are looking for competition to the Elon Musk-owned company. “Starlink, I believe, is going to continue to gain market share but they’re not going to take 100 per cent of the market,” he noted. “The market’s big, it’s growing.” The same day, the Ontario government announced it is signing a deal with Starlink to provide internet service in remote areas of the province. About 15,000 homes and businesses will be connected starting next June. Goldberg provided a few details about a lawsuit Telesat launched against Rogers Communications Inc. over its Shaw satellite service. The suit seeks $45 million, $35 million in unpaid revenue and $10 million in punitive damages. “They felt like they had a right to stop paying us. We don’t share that view,” he drily responded. There have been media reports that Telesat is in negotiations with the country of Taiwan to provide service. The CEO would neither confirm nor deny that. “We saw that there were some news reports about that but no, our policy is not to comment on any potential discussions we’re having with folks,” Goldberg replied. “Which is not to say that we’re not, not to say that we are.” He did confirm that the company is in talks with Viasat Inc. The American broadband company revealed the discussions during its own quarterly report last week. ppark@thewirereport.ca

LEO market booming, Telesat says in Q3 reporting

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By Paul Park
| November 14, 2024

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