While Telesat is watching the rise of SpaceX’s Starlink Internet services for the commercial market, it maintains government and enterprise are eagerly awaiting the arrival of their Lightspeed low Earth orbit satellite constellation (LEO).
Company CEO Dan Goldberg spoke about progress with Lightspeed during Telesat’s third quarter results released Monday (Nov. 6). Overall the financials did not show a lot of change, and following two large announcements for Lightspeed earlier in the quarter Telesat had just small updates to share about the company’s progress towards a 2026 launch.
“These are markets that were active in everyday,” Goldberg said of Telesat’s key differentiators with Lightspeed, which focuses on government services as well as backhaul connectivity with mobile network operators and Internet service providers.
“Those are exactly the verticals that we’ve always expected Lightspeed to have a real competitive edge in, so nothing’s changed. That continues to be our expectation … and again, my expectation is we’ll have some (financing) commitments over the course of next year.”
He acknowledged there is a growing “impact of Starlink” in the enterprise market, but emphasized that the market remains open for considerable growth for newer entrants like Lightspeed. (The Telesat constellation has been held up by supply chain issues and some financing complexities for several years, but remains on the manifest for a delayed launch.)
But Starlink, he added, appears to be mostly a consumer product. “A lot of what Starlink is doing right now is on the consumer side, and I think that they’re getting good traction on the on the consumer side. But that’s not an area that we’re focusing on with Lightspeed, or really that we focus on with our existing business.”
Negotiations for Lightspeed financing are continuing, he added, but not concluded yet. “As we sign material deals, we’ll announce them,” Goldberg said.
Telesat’s third-quarter results included a backlog of $1.5 billion and a cash balance of $1.8 billion. Aside from Lightspeed, other key highlights of the quarter include repurchasing debt for $195 million USD, receiving proceeds from a C-band spectrum clearing program, and finishing in-orbit testing of a low Earth orbit demonstration satellite testing Ka- and V-band payloads.
The company pointed to momentum continuing to build for Lightspeed, including the announcement in August that MDA will be the prime satellite contractor for Lightspeed and that the program will be fully funded, as long as definitive funding agreements conclude as expected. In September, Telesat also announced a contract with SpaceX to launch Lightspeed on 14 Falcon 9 rockets.
Consolidated revenue was $175 million, nearly flat (a three percent decrease) in the same period of 2022. This was mostly due to a decline in South American customers. Operating expenses declined only slightly to $50 million, down from $56 million in 2022. Some of the decline was due to lower non-cash shared based compensation, but there was also an increase in expenses due to third party costs associated by moving customers from Anik F2 to other satellites.
Adjusted EBITDA also changed only slightly, with a decrease of three percent ($4 million). The company’s net loss, however, was just $3 million in Q3 2023 compared to a loss of $229 million in Q3 2022. The company said this is due to changes in foreign exchange rates, along with converting U.S. dollar debt into Canadian dollars.