On July 23, 2019 the Canadian government and Telesat signed a Memorandum of Understanding (MOU) with respect to the government securing access to the Telesat LEO satellite constellation that was valid for one year. That MOU has since lapsed and SpaceQ has inquired with both Telesat and Innovation, Science and Economic Development Canada (ISED) has to the current status of negotiations.
While SpaceQ did speak to a Telesat representative, the company did not want to comment publicly at this time on the status of the MOU.
ISED on the other hand did respond to our inquiry with an email response that said in part “since the signing of the MOU, Innovation, Science and Economic Development Canada has been engaged with Telesat.” And engaged they remain.
ISED has already invested $85 million to Telesat through the Strategic Innovation Fund and all indications are that the government remains committed to Telesat.
The email SpaceQ received also stated that “Budget 2019 committed to investing $600 million over ten years to secure capacity on Low Earth Orbit (LEO) satellites in order to connect the most challenging areas in Canada to high-speed Internet of at least 50/10 Mbps.” Furthermore the email states that “In July 2019, Minister Bains announced the signing of a memorandum of understanding with Telesat to provide funding to secure this capacity on Telesat’s proposed LEO constellation.” There’s really nothing new here. However, it’s important to understand the MOU in context to the markets Telesat is trying to secure.
Telesat for their part, and in business circles, have stated that they are laser focused on the enterprise market. But the MOU with the government brings the consumer market in focus.
Here’s the objectives from the governments perspective as listed in the MOU:
- Maximize and optimize rural and remote broadband coverage to reach target Internet speeds of at least 50/10 Mbps for all Canadians.
- Position Canada as the global leader of LEO technologies.
- Secure sufficient, high-speed, reliable broadband capacity to serve challenging rural and remote communities in Canada.
- Maximize the potential for high-quality job creation in Canada stemming from this investment.
- Open a platform for development of other applications using Telesat LEO.
Until such a time as the MOU becomes a definitive agreement, Telesat won’t be saying much on the consumer market segment.
Current status of Telesat LEO
In Telesat’s last investor call from July 30 after reporting their quarterly earnings, there were questions about the status of Telesat LEO. Dan Goldberg said “in the coming months, you should be hearing from us on that, in a position to make some definitive announcements and with respect to procurement and financing, so that’s, that’s where we sit there.”
We’ve heard similar statements in the past. However, as recent comments by Maxar make clear, vendors are getting frustrated in the delay and there’s even been speculation as to whether Telesat LEO will ever built.
In that same call Goldberg also made it clear to investors, that unlike SpaceX who are focused on the consumer market, they are focused on the enterprise market with Goldberg specifically saying, “I think we’ve always been very clear that we’re focused on the enterprise market.” Context is important here as to who Goldberg was speaking to. Clearly with the government MOU there is a consumer market segment at play as well, if only through resellers.
It’s also important to remember that this is a critical moment in time in its history. Goldberg has made it clear that the company had to pivot and adapt to stay relevant. The COVID-19 pandemic isn’t helping matters. But with the government onboard, spectrum secured, and a methodical business model, Telesat should be moving forward with Telesat LEO in due course, even if it seems very slow to some.