Telesat is moving an undisclosed C-band satellite into an orbit to replace Anik F2’s geostationary slot “in the coming months,” CEO Dan Goldberg told investors in its recent quarterly earnings call, as the company continues to negotiate the financing of its Lightspeed constellation.
The 18-year-old Boeing-built Anik F2 will leave service next year – three years before it was expected to, although it was operating beyond a 15-year design lifetime – due to issues with two of its four thrusters that are depleting fuel rapidly, Telesat disclosed in August. Anik F2 has C-band, Ku-band and Ka-band transponders, so the C-band satellite (which Telesat bought from another operator) can only do part of the lifting.
Anik F2’s loss is forecast to present a revenue loss in 2023, but Telesat is rapidly moving on the matter and now expects that over 90 percent of Anik F2’s capacity will be covered in other ways. It has leased capacity from other companies, and adjusted customer ground antennas to point to other satellites in Telesat’s fleet, Goldberg said Nov. 8.
“I do want to applaud the combined efforts thus far of the Telesat team, our customers and other partners as everyone works hard to provide continuity of [Anik F2’s] important services,” Goldberg said.
Aside from large telecommunications customers serving North America, CBC reported in September that Canada’s Northwestel uses Anik F2 for broadband, wireless mobility and long-distance phone services to eight Northwest Territories communities, as well as Old Crow in the Yukon and Bob Quinn Lake in northern B.C., which means Telesat is also trying to maintain services in Canada’s north.
Goldberg said more operating expenditures will be forthcoming due to purchasing the C-band satellite, buying ground infrastructure and using third-party capacity, and more information will be forthcoming as Q4 2022 results are released. Anik F2 represents roughly 8 percent of Telesat’s overall revenue, or $50 million.
Telesat’s planning for future capacity also continues to meet pressure. The company has been operating under uncertainty regarding Lightspeed for more than a year, but Telesat emphasized its latest earnings have been meeting guidance nonetheless.
Telesat’s net loss for Q3 2022 was $229 million, more than quadruple the $52 million net loss in the same quarter last year; the difference is principally due to foreign exchange loss on Telesat’s U.S. dollar debt, however. Its consolidated revenue was $180 million, just shy of the $186 million from last year; the decrease came from satellite broadcaster Dish Network asking for less capacity upon a renewal and from a non-recurring short-term services agreement with another satellite operator in 2021.
Goldberg has spent several quarterly calls reassuring investors that the company is doing all it can to recover from pandemic-related supply chain hiccups that interrupted the build of Lightspeed in late 2021. After manufacturer Thales Alenia informed Telesat the launch of Lightspeed would be delayed at least a year to 2026, Telesat explored modifications to the fleet to save on rising costs due to inflation.
Telesat next slashed 100 satellites from the constellation’s design for a lower number of 198, which is still exceeding what they require from customers, Goldberg emphasized in May. That at first was expected to keep Lightspeed to its $5 billion budget, but inflation is pushing costs up by at least hundreds of millions of dollars. Telesat has been in negotiations with export credit agencies to secure more financing, beyond $4 billion in financing agreements with the governments of Canada, Quebec and Ontario, to name a couple of examples.
More information about Lightspeed will be forthcoming in December, Goldberg said on Nov. 7, repeating guidance from a previous quarterly call that forecast clarity by the end of 2022. “We’re not hearing anything different from Thales,” he said regarding their supply chain schedule, and regarding lenders, “we’re hoping to have a much better sense of where things stand by around the end of the year.”
Goldberg emphasized Telesat has made “tangible progress” in negotiations with export credit agencies. “We remain extremely bullish about the opportunity tell us of Lightspeed gives us to grow our business,” he said.