A rendering of Telesat’s low earth orbit broadband constellation.
Telesat
Shares of Canadian telecommunications satellite operator Telesat soared on Friday following the announcement of a supplier change for its upcoming Lightspeed global internet network.
Canadian space company MDA will now be responsible for building the Lightspeed satellites, replacing the previous supplier, French-Italian manufacturer Thales Alenia Space. Telesat expects this change to result in approximately $2 billion in total capital cost savings.
The company plans to begin launching the first Lightspeed satellites in mid-2026, and global service will commence once all 156 satellites are in orbit. The complete network will consist of 198 satellites.
In early trading, Telesat’s stock surged by as much as 64% with significant volume, starting from its previous close at $8.45 per share. However, it later slightly decreased to approximately 50%.
“I am incredibly proud of the innovative work done by the Telesat team, resulting in significant cost reductions,” said Telesat CEO Dan Goldberg in a press release.
Telesat stock surges Friday after the company swaps its internet satellite supplier.
Previously, Telesat had contracted Thales Alenia Space to manufacture the satellites for the Lightspeed network, with an estimated cost of $5 billion. This figure included $3 billion for the satellites themselves, as well as expenses for rocket launches, ground infrastructure, and software platform development to operate the network.
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Telesat CEO Dan Goldberg emphasized that Lightspeed is not positioned to directly compete with companies like SpaceX’s Starlink or Amazon’s Kuiper in the consumer market. Instead, it will maintain focus on serving enterprise customers in the government and commercial sectors, where Starlink has also expanded its presence in recent times.
Telesat also reported its second-quarter results on Friday, which included $180 million in revenue, a 4% decrease compared to the same period the previous year. However, the company experienced a significant shift in net income, jumping to $520 million in the quarter from a net loss of $4 million in the same quarter last year. This increase was mainly due to a $260 million payment from the FCC for clearing spectrum for 5G use in the United States.
The company has reiterated its full-year 2023 revenue guidance, forecasting a range of $690 million to $710 million.
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