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Telesat completing financing for Lightspeed constellation

Written by  Jeff Foust Tuesday, 06 April 2021 11:00
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WASHINGTON — Telesat expects to finalize the financing for its Lightspeed broadband constellation in the next few months, along with contracts to launch the fleet of nearly 300 satellites.

Telesat selected Thales Alenia Space Feb.

9 as the prime contractor to build the constellation of low Earth orbit satellites. That contract, which includes network management software and integration of the satellites with gateways, was valued at $3 billion, with Telesat estimating the total cost of the system at $5 billion.

During a session of the Satellite 2021 LEO Digital Forum April 6, Dan Goldberg, president and chief executive of Telesat, confirmed the $5 billion total cost for Lightspeed. The system will be financed with a mix of debt and equity, with 60% of the financing from debt and 40% from equity.

“We’re almost done on the journey to put the financing in place,” he said. “I expect that will get done in the next couple of months.”

He offered a similar time frame for finalizing plans to launch the constellation. The company has a contract with Blue Origin announced more than two years ago for an unspecified number of New Glenn launches. It also has a contract with Relativity Space for launches on its Terran 1 small launch vehicle to place in orbit individual satellites to fill gaps in the system.

With Telesat seeking to start Lightspeed launches in 2022, but New Glenn not scheduled to make its debut until at least the fourth quarter of 2022, Telesat is likely to work with other launch companies. “We’re well-engaged with other launch providers right now as well,” Goldberg said. “In the coming months I think we’ll be in a position to make some announcements.”

Among major operators of geostationary communications satellites, Telesat has been the most aggressive in pursuing a LEO constellation. While SES has its O3b system of satellites in medium Earth orbit, Telesat’s Lightspeed will be far larger, and compete directly with new entrants like SpaceX, OneWeb and Amazon’s Project Kuiper.

Telesat is focusing on several markets for Lightspeed, including backhaul services for mobile network operators and internet service providers, aeronautical and maritime connectivity, and government customers. “We see huge growth there, provided that you bring the right value proposition to the market,” he said. “What those verticals are looking for are big, fast, affordable links. We believe that it’s essential that they be low latency.”

Those requirements, as well a desire for “ubiquitous” connectivity, including in polar regions, drove Telesat to a LEO constellation. “We believe we’re going to answer those sets of requirements,” he said. “We’re super bullish about our opportunities.”

Asked if Telesat pursued a LEO system out of fear of becoming less relevant had it continued to be solely a GEO operator, Goldberg hesitated before answering. “I think it’s something we had to do,” he ultimately said, based on its analysis of the growth of the broadband market and how to best serve it. “For us, you inescapably land at LEO.”

Telesat, he added, is not abandoning GEO, citing its strengths in other markets, like direct-to-home (DTH) television. “I believe that DTH is not going be best provided from LEO any time soon,” a time frame he defined as a decade or more. “The DTH business, as we know it today, is still going to be around for quite some time, and that is served very, very well from GEO.”

However, he sees future growth coming from broadband services coming from LEO. “I think LEO is going to be the predominant architecture, but I don’t think it’s going to happen overnight,” he said. “There’s going to be a transition. That transition almost always takes longer than we expect.”

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