Canada’s Telesat takes on Musk and Bezos in space race to provide fast broadband By Reuters

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By Steve Scherer OTTAWA (Reuters) – Canada’s Telesat is rushing to launch a constellation of Low Earth Orbit (LEO) satellites to provide high-speed global broadband from space, taking on the satellite communications company founded in 1969 with two pioneering billionaires, Elon Musk and Jeff Bezos. Musk, the CEO of Tesla (NASDAQ 🙂 Inc who was only a year old when Telesat launched its first satellite, is putting the so-called Starlink LEO into orbit with his company SpaceX, and Inc (NASDAQ :), which Bezos founded, he’s planning a LEO called Project Kuiper. Bezos also owns Blue Origin, which builds rockets. Despite the competition, Dan Goldberg, Telesat CEO, expresses confidence when he calls Telesat’s LEO constellation “the Holy Grail” for its shareholders: “a sustainable competitive advantage in global broadband distribution.” Telesat’s LEO is priced much lower than SpaceX and Amazon, and the company has been in satellite services for decades longer. Also, instead of focusing on the consumer market like SpaceX and Amazon, Telesat looks for business customers with big money. Goldberg said he was literally losing sleep six years ago when he realized the company’s business model was in jeopardy when Netflix (NASDAQ 🙂 and video streaming took off and fiber optics ensured blazing-fast internet connectivity. Telesat’s 15 geostationary satellites (GEOs) primarily serve television broadcasters, Internet service providers, and government networks, all of which were increasingly concerned about latency or time lag of signals bouncing off orbiters. more than 35,000 km (22,200 miles) above. land. 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. Those ideas ultimately led to Telesat’s LEO constellation, dubbed 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 some 1,200 Musk Starlink satellites in orbit. “Starlink will be in service much sooner … and that gives SpaceX the opportunity to win customers,” said Caleb Henry, senior analyst at Quilty Analytics. Starlink’s “first-to-move” advantage is up to 24 months and “no one is going to block this entire market in that time frame,” Goldberg said. Telesat in 2019 signed a launch agreement with Bezos’ aerospace company Blue Origin. Talks are ongoing with three other people, said David Wendling, Telesat technical director. These are Japan’s Mitsubishi Heavy Industries Ltd, Europe’s ArianeGroup, and Musk’s SpaceX, 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 being built by Thales Alenia Space in early 2023, with partial service at higher latitudes later that year, and full global service in 2024. ‘SWEET SPOT’ Estimated to be the Lightspeed constellation cost half as much as SpaceX and Amazon’s $ 10 billion projects. “We think we are in the sweet spot,” Goldberg said. “When we look at some of these other constellations, we don’t understand it.” Analyst Henry said Telesat’s focus on commercial customers is the right one. “It has two heavyweight players, SpaceX and Amazon, who have already pledged to spend $ 10 billion on constellations of satellites optimized for the consumer market,” he said. “If Telesat can spend half that amount on creating a high-performance system for businesses, then yes, they will be very competitive.” Telesat’s experience in the industry can also provide an advantage. “We have worked with many of these clients for decades … That will give us a real advantage,” said Goldberg. Telesat “is a satellite operator, has been a satellite operator and has the advantage of experience and expertise in that business,” said Carissa Christensen, CEO of research firm BryceTech, adding, however, that only See two for three surviving LEO constellations. Telesat is securing financing (one-third equity and two-thirds debt) and will be listed on the Nasdaq sometime 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 major shareholders of the company. The French and Canadian export credit agencies BPI and EDC, respectively, are expected to be the top lenders, Goldberg said. The Quebec provincial government is lending C $ 400 million ($ 317 million), and the federal government of Canada has pledged C $ 600 million to be a preferred customer. The company also posted Cdn $ 246 million in net revenue in 2020. Execution of the LEO plan is what keeps Goldberg up at night, he said. “When we decided to go down this path, the two richest people in the universe weren’t focused on their own LEO constellations.” ($ 1 = 1.2622 Canadian dollars)