TAMPA, Fla. — Geopolitical shifts are driving government interest in Telesat’s low Earth orbit plans, according to the Canadian operator, validating its move beyond geostationary satellites as LEO frontrunner Starlink erodes its legacy broadband business.
Rising global defense priorities and a push for sovereign-controlled communications are making customer demand for Lightspeed “much more concrete” and urgent, Telesat CEO Dan Goldberg said during a March 27 earnings call.
Telesat has disclosed a revenue backlog of 600 million Canadian dollars ($419 million) for Lightspeed, comprising mostly a commitment from Canada’s federal government in 2020 to provide subsidized broadband services to rural communities.
However, Goldberg said it is very likely LEO commitments will surpass the 1.1 billion Canadian dollar backlog Telesat recorded for its geostationary orbit (GEO) business at the end of 2024.
“We’re having some advanced discussions with customers about Lightspeed commitments,” he said, 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 under contract to build 198 satellites for Lightspeed, which Starlink owner SpaceX is scheduled to deploy across 14 launches within a year, starting from mid-2026.
Goldberg’s comments come as questions of Canadian sovereignty gain political momentum ahead of a national election, amid a trade dispute with the U.S., where President Donald Trump has floated the idea of Canada becoming the country’s 51st state.
As the U.S. also reassesses its global security role, Goldberg noted that Canada’s two main political parties are both calling for increased and accelerated defense spending, with an emphasis on supporting domestic industry.
He also underscored Lightspeed’s potential to enhance connectivity in the Arctic — a region of strategic importance to Canada.
In particular, he pointed to the Canadian Armed Forces’ Enhanced Satellite Communication Project (ESCAPE) for Arctic communications as a potential contract.
Lightspeed could play a key role in connecting forward operating bases to strengthen Canadian presence in the region, along with icebreaker and other ships, fighter jets and drones.
Legacy business pressures
Meanwhile, Telesat is facing growing broadband competition from Starlink, particularly in the maritime market.
Telesat’s geostationary satellite TV business is also continuing its gradual decline amid a general shift to online streaming services, exacerbated by contracts coming to the end of their terms or renewed at a lower rate.
The operator reported total 2024 revenues of 571 million Canadian dollars, down 20% year-on-year when adjusted for foreign exchange rates. Adjusted EBITDA, or earnings before interest, taxes, depreciation, and amortization, dropped 29% to 384 million Canadian dollars.
While these figures were above Telesat’s guidance for the year, the company is bracing for more declines in 2025 amid ongoing challenges in GEO.
Goldberg said Telesat expects 2025 revenues to decline by approximately 155 million Canadian dollars, with half attributed to a drop in its satellite TV business and the other half to declining enterprise and consulting revenues.
“Roughly 20% of [the decline in that second half] is coming from customers serving the maritime and — to a lesser extent — the aero markets, principally owing to competition from Starlink,” Goldberg said.
Telesat is also moving more of its aging fleet into an inclined orbit, and Goldberg noted how the company has not ordered a new GEO satellite in nine years, because “we haven’t been able to close a compelling business case for a new GEO satellite in quite some time.”
Still, “there might be another opportunity or two for a new GEO satellite in the future,” he continued, as European peer Eutelsat also reassesses its multi-orbit fleet needs.
Amid expected revenue declines, Telesat is ramping up investment in Lightspeed production.
The company spent more than 1 billion Canadian dollars on the constellation in 2024 and expects to spend around 900 million to 1.1 billion Canadian dollars in 2025.
Telesat has secured 2.54 billion Canadian dollars of funding from the governments of Canada and Quebec to fund Lightspeed, covering more than half of its $3.5 billion budget.
