Telesat Makes a Calculated Gamble on Blue Origin to Launch LEO Satellite Constellation

From left to right; Jeff Bezos, founder of Blue Origin, Dan Goldberg, CEO, Telesat, and Bob Smith, CEO, Blue Origin. Credit: Blue Origin.

Telesat is making a calculated gamble on Blue Origin, one that could save them money, and critically, allow them to deploy their low Earth orbit (LEO) satellite constellation on their timeline.

In the Telesat press release issued this morning it states “Telesat and Blue Origin have signed a multi-launch agreement that paves the way for the powerful New Glenn rocket to play a key role in Telesat’s deployment of its global LEO satellite constellation that will deliver fiber-like broadband services anywhere on Earth. Telesat’s LEO program will gain significant cost savings and other advantages by launching with Blue Origin’s heavy-lift New Glenn.”

Another of the cost savings measure that was highlighted in the press release is that of the New Glen 7-meter fairing. According to Blue Origin it “has twice the payload volume as any other launch provider in the market, making it an ideal solution for Telesat to lower their satellite deployment costs.”

Selecting the right launch service provider

Competition remains fierce between established launch service providers, so much so, that getting your asset launched when you want it, is a difficult task to accomplish.

Russia (17.5%) and China (34.2%) accounted for 51.7% of last years launches. Telesat wasn’t likely to launch with options available from either country. Remember that Telesat lost its first LEO demo satellite when human error resulted in a Russian launch failure. As for China, signing such a large launch contract just wasn’t going to happen with the current political climate.

The U.S. accounted for 29.8% of launches last year with SpaceX alone accounting for 18.4%, or 21 launches. There are three problems for Telesat when it was evaluating SpaceX.

  1. SpaceX has a serious launch backlog. SpaceX hasn’t been able to ramp up fast enough production of their Falcon 9 rocket to meet demand and Falcon Heavy production is also behind.
  2. SpaceX will be needing to use some of its own rocket supply to launch its constellation of satellites right around the time Telesat will want to launch.
  3. And importantly, SpaceX is also a competitor in the LEO satellite marketplace.

The Blue Origin risk

In any business you have to evaluate the risk in making decisions. So the question is how much risk is Telesat taking in selecting Blue Origin?

Blue Origin is unproven but well funded, and hires the best people in the business. Their New Shepard vertical-takeoff, vertical-landing, suborbital crewed rocket, which has successfully completed 10 test launches, is showcasing some of their skills.

Telesat will use Blue Origin’s heavy lift launch vehicle New Glenn. It’s first flight is expected in 2021.

It is powered by a new engine, the BE-4, which like SpaceX’s Falcon 9 Merlin engines, is meant to be reused. Earlier this week, Blue Origin broke ground in Huntsville, Alabama for the serial production of the engine.

Like Iridium, which bet on SpaceX in 2010 by signing a launch contract to launch its constellation, including later agreeing to use previously used Falcon 9 first stage boosters, Telesat is making the same gamble with Blue Origin.

Rocket science is still hard, but it is becoming more readily accessible. To do what Blue Origin is doing you need deep pockets, which they have, skilled people and a commitment to innovation, which they have.

Telesat still has to decide on who will build its satellite constellation. That decision is expected this summer and it will take some time to build up production and be ready for launch. This means their window to launch will coincide with New Glen becoming available.

The key to the deal with Blue Origin is that of being an anchor customer. That allows them to get both a competitive price, and I think critically, allows them to launch on the schedule they want.

Launch schedule assurance is an important factor for Telesat as they look to secure the financing they’ll need to build out their constellation and ramp up services generating revenue.

They’re also in a race with other competitors for a share of the LEO telecommunications market. OneWeb has the lead at the moment, SpaceX is also in the running, and there are still others looking for market share.

blue origin new glenn flight
New Glenn lifts off from Launch Complex 36 at Cape Canaveral. Following stage separation, the first stage flies back to Earth and lands nearly 1,000 km downrange on a moving ship, allowing the booster to land in heavy sea-states. The second stage engines ignite and the 7-meter fairing separates. The mission is complete when the payload is delivered safely to orbit. Credit: Blue Origin.

The deal Telesat made, appears with the few details we have, to be a good one. As the company reinvents itself, It’s a gamble that could position them to compete and grow as the LEO constellation marketplace takes shape.

About Marc Boucher

Marc Boucher
Boucher is an entrepreneur, writer, editor & publisher. He is the founder of SpaceQ Media Inc. and CEO and co-founder of SpaceRef Interactive Inc. Boucher has 20 years working in various roles in the space industry and a total of 27 years as a technology entrepreneur including creating Maple Square, Canada's first internet directory and search engine.