Geopolitical factors are significantly influencing government interest in Telesat’s low Earth orbit (LEO) plans, prompting the Canadian operator to prioritize its LEO constellation, Lightspeed, as its legacy broadband business faces pressure from competitors like Starlink. Telesat CEO Dan Goldberg highlighted during a March 27 earnings call that rising global defense priorities and the demand for sovereign-controlled communications are making customer demand for Lightspeed “much more concrete” and urgent.
Telesat has a 600 million Canadian dollars ($419 million) revenue backlog for Lightspeed, primarily from a 2020 Canadian federal government commitment for rural broadband. However, Goldberg anticipates that LEO commitments will soon exceed the 1.1 billion Canadian dollar backlog recorded for its geostationary orbit (GEO) business at the end of 2024. “We’re having some advanced discussions with customers about Lightspeed commitments,” he stated, adding “we’re still about a year and a half out from our first launch, but the market just feels like it’s moving in our direction.”
Canada’s MDA is contracted to build 198 satellites for Lightspeed, with SpaceX slated to deploy them across 14 launches within a year, starting mid-2026. Goldberg's comments come as Canadian sovereignty concerns gain traction politically, particularly amid a trade dispute with the U.S. He noted that Canada’s main political parties are advocating for increased defense spending, supporting domestic industries, and that Lightspeed could enhance Arctic connectivity, aligning with the Canadian Armed Forces’ Enhanced Satellite Communication Project (ESCAPE).
Meanwhile, Telesat faces increased broadband competition from Starlink, especially in the maritime sector. Its geostationary satellite TV business is also declining due to the shift towards online streaming. Total 2024 revenues reached 571 million Canadian dollars, down 20% year-on-year (adjusted for exchange rates), and adjusted EBITDA dropped 29% to 384 million Canadian dollars. Telesat projects a 155 million Canadian dollar revenue decline in 2025, partly due to satellite TV and enterprise/consulting revenue decreases, with Starlink competition contributing to roughly 20% of the latter. The company hasn't ordered a new GEO satellite in nine years due to a lack of compelling business cases, although future opportunities may exist.
Despite these challenges, Telesat is investing heavily in Lightspeed, spending over 1 billion Canadian dollars in 2024 and anticipating 900 million to 1.1 billion Canadian dollars in 2025. The project has secured 2.54 billion Canadian dollars in funding from Canadian and Quebec governments, covering over half of its $3.5 billion budget.