Telesat’s headquarters in downtown Ottawa, Ontario, Canada. Photo: Telesat

Telesat has seen customers discussions for the Lightspeed constellation ramp up after the Canadian operator finalized funding for the Low-Earth Orbit (LEO) constellation in the third quarter, CEO Dan Goldberg reported in the company’s financial results on Thursday. 

“It feels like a bit of a sea change in terms of the qualitative nature of the discussions we’ve been having with customers and different verticals since we announced that we’re fully funded,” Goldberg told investors on Nov. 14. 

Telesat does not yet report Lightspeed backlog on a quarterly basis, but Goldberg said the operator will start reporting it in 2025. 

Goldberg cited recent Starlink wins for United Airlines and Air France, and Australia canceling its standalone Geostationary (GEO) military satellite program as evidence that end users are looking for LEO capabilities. 

“I think the penny dropped with the user community,” Goldberg said. “Whether you think the future is totally LEO or that the future is going to have a meaningful component of LEO — everyone in the world believes one or the other.” 

Telesat is in discussions with Viasat for capacity on Telesat, Viasat’s CEO Mark Dankberg recently revealed. 

Goldberg commented: “The user community sees huge benefits from moving to LEO. I think that most communication service providers across all different verticals are looking for a way to leverage LEO to remain competitive. Certainly the conversations we are having with Viasat are a reflection of that.”  

In addition, Goldberg said he believes Lightspeed will be interoperable with the Space Development Agency’s PWSA constellation and there’s a “high likelihood” that Lightspeed will also be interoperable with Europe’s IRIS² constellation, facilitated by the use of Tesat optical terminals and Aalyria software for network management. 

Third Quarter Results 

For the quarter ended September 30, 2024, Telesat reported consolidated revenue of $138 million Canadian dollars ($98 million) a decrease of 21% compared to the same period in 2023. 

Telesat’s net income for the quarter was CA$68 million ($48 million). 

The decrease in revenue was primarily due to a reduction of services and lower rate on the renewal with direct-to-home (DTH) customer Bell Canada for the Nimiq 4 satellite signed in October 2023, and lower revenue from mobility and Latin American customers. 

Adjusted EBITDA for the quarter was CA$96 million ($68 million), a decrease of 28% year-over-year. Adjusted EBITDA margin was 70%. 

Telesat updated its guidance for 2024, now expecting revenue for the full year 2024 to be at the upper end of the range of between CA$545 million and CA$565 million ($387 million to $402 million). 

GEO Updates: Dish Renewal and Shaw Lawsuit 

Telesat renewed its deal with EchoStar for capacity on the Nimiq 5 satellite for DTH customer Dish. Goldberg explained that Dish will ramp down capacity use over the first year, to half of the capacity that is used today. This will decrease EchoStar’s payment to Telesat by less than one third. 

Goldberg said Telesat plans to use capacity freed up by the lesser renewal to support Canadian customers on aging satellites like Anik F3. But that extra use will not replace the full impact from Dish. 

The operator also filed a lawsuit during the quarter against Canadian customer Shaw Communications for non-payment. Telesat is seeking $45 million damages, which includes around $35 million to recoup non-payments. 

Telesat also restructured its contract with Canadian rural broadband provider Xplore, which went through a financial restructuring, mentioned last quarter. Goldberg said contract will now expire at the end of the third quarter of next year, more than a year earlier than anticipated. Telesat expects revenue from Xplore to decline $4 million next year relative to this year. 

The operator has not provided financial guidance for 2025.