Importance Score: 72 / 100 🔴
Geopolitical Shifts Fuel Government Interest in Telesat Lightspeed LEO Plans
TAMPA, Fla. – Geopolitical transformations are increasing governmental interest in Telesat’s Low Earth Orbit (LEO) initiatives, the Canadian operator has stated, validating its strategic pivot beyond geostationary satellites as LEO competitor Starlink challenges its established broadband services. Heightened global security priorities and a growing emphasis on sovereign communication networks are making customer demand for Telesat’s Lightspeed constellation “significantly more tangible” and pressing, according to CEO Dan Goldberg during a March 27th earnings conference call.
Growing Demand for Lightspeed Constellation
Telesat has previously reported a backlog of 600 million Canadian dollars ($419 million) in contracted revenue for Lightspeed. A substantial portion of this commitment originates from the Canadian federal government’s 2020 initiative to subsidize broadband access for underserved rural communities.
Goldberg indicated that LEO commitments are highly likely to surpass the 1.1 billion Canadian dollar backlog Telesat has recorded for its geostationary orbit (GEO) operations as of the close of 2024.
“We are engaged in advanced discussions with potential clients regarding Lightspeed commitments,” he stated, adding, “While we are still approximately eighteen months away from our initial launch, prevailing market dynamics appear to be increasingly advantageous for our strategy.”
Canadian firm MDA is contracted to construct 198 satellites for the Lightspeed project. SpaceX, the owner of Starlink, is slated to execute the deployment across 14 launches within a year, commencing in mid-2026.
Sovereignty and Strategic Importance
Goldberg’s remarks coincide with escalating national sovereignty dialogues in Canada ahead of upcoming elections, amidst ongoing trade tensions with the United States. Former U.S. President Donald Trump has previously suggested the notion of Canada potentially becoming the 51st state.
As the United States also re-evaluates its international security posture, Goldberg highlighted that both major Canadian political parties are advocating for amplified and expedited defense expenditures, with a focus on bolstering domestic industries.
He further emphasized Lightspeed’s capacity to enhance connectivity in the Arctic region—an area of considerable strategic importance for Canada.
Arctic Connectivity and Defense Applications
Specifically, Goldberg referenced the Canadian Armed Forces’ Enhanced Satellite Communication Project (ESCAPE) for Arctic communications as a prospective contract opportunity.
Lightspeed has the potential to be instrumental in linking forward operating bases to strengthen Canadian presence in the Arctic, alongside maritime assets such as icebreakers, and aerial resources including fighter jets and unmanned aerial vehicles.
Challenges in Legacy Geostationary Business
Legacy Business Pressures
In the interim, Telesat is confronting intensifying broadband competition from Starlink, particularly within the maritime sector.
Telesat’s geostationary satellite television business is also experiencing a continued gradual contraction, reflecting a widespread shift towards online streaming platforms. This trend is further compounded by contracts concluding or being renewed at reduced rates.
The operator reported total revenues for 2024 at 571 million Canadian dollars, a 20% decrease year-over-year when adjusted for foreign exchange fluctuations. Adjusted EBITDA witnessed a 29% decline to 384 million Canadian dollars.
Although these financial results exceeded Telesat’s projected guidance for the year, the company is preparing for further revenue reductions in 2025 due to persistent challenges within its GEO business segment.
Goldberg projected that 2025 revenues are anticipated to decline by approximately 155 million Canadian dollars. He attributed roughly half of this decrease to the contraction in its satellite TV business, with the other half stemming from reduced enterprise and consulting revenues.
“Approximately 20% of the latter half of that decline is attributable to customers serving the maritime and, to a lesser extent, the aeronautical markets, primarily due to competition from Starlink,” Goldberg explained.
Telesat is also transitioning more of its existing satellite fleet to inclined orbits. Goldberg noted that the company has not commissioned a new GEO satellite in nine years, stating, “We haven’t been able to establish a compelling business justification for a new GEO satellite for a considerable period.”
However, he added, “there might be another opportunity or two for a new GEO satellite in the future,” noting that European competitor Eutelsat is also reassessing its multi-orbit fleet requirements.
Investment in Lightspeed Production
Amid anticipated revenue decreases, Telesat is increasing its investment in Lightspeed constellation production.
The company invested over 1 billion Canadian dollars in the constellation during 2024 and projects spending between 900 million and 1.1 billion Canadian dollars in 2025.
Telesat has secured 2.54 billion Canadian dollars in funding commitments from the governments of Canada and Quebec for the Lightspeed project, which covers more than half of its total budget of $3.5 billion.