Telesat plans to launch 298 low Earth orbit (LEO) satellites to create its Lightspeed constellation, aiming to provide affordable broadband in remote parts of Canada
In the past, Telesat has said it needed around $5 billion to build its ambitious Lightspeed LEO satellite broadband constellation, $1.4 billion of which would come from its own coffers.
Yesterday, the Canadian company reached a major milestone in sourcing the additional funding required, with the Canadian government agreeing to invest C$1.44 billion (around $1.15 billion) into the project.
This investment takes the form of a C$790 million loan, set to be repaid over a 20-year period, with the remaining C$650 purchasing preferred stock in the Lightspeed unit, from which they will receive dividends.
As part of the agreement, Telesat also agrees to invest $1 billion in capital expenditures for the initial Lightspeed constellation, and the less of $2.6 billion or 50% of specified capital expenditures for a subsequent constellation.
Telesat says it is also committed to increasing its Canadian workforce to 700 full-time employees, with Lightspeed expected to support over 1,500 jobs in total.
Back in February, the Quebecois government invested $400 million in the Lightspeed project, with the understanding that Telesat would invest $1.6 billion into the region by shifting a ‘significant portion’ of its Lightspeed manufacturing and operations to the province.
The government of Ontario also announced just last week that it would invest $109 million into the Lightspeed project in exchange for dedicated capacity on the network.
“Telesat now has arrangements for approximately $4 billion in funding for the [Lightspeed] program. We expect to secure in the near term the remaining financial commitments required to fully finance Lightspeed,” said Telesat CEO Dan Goldberg. “
Telesat plans to begin commercial broadband offerings in Canada during the second half of 2024.
The satellite broadband space has become very exciting over the past year. Beyond the notably exploits of SpaceX’s Starlink constellation, additional players are beginning to emerge at scale. Just yesterday, OneWeb announced it had received an additional $300 million in funding from South Korea’s Hanwha Systems, with the company now having enough investment to begin its plans for global broadband coverage.
In similar news, Inmarsat has also recently announced that it will be creating its Orchestra satellite network, a unified connectivity platform combining geosynchronous and LEO satellites with terrestrial connectivity.
A new telecoms space race is beginning, with broad implications for the sector as a whole.
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