Canadian telecommunications satellite operator Telesat experienced a surge in its stock value after announcing a change in suppliers for its planned Lightspeed global internet network. Telesat has replaced French-Italian manufacturer Thales Alenia Space with Canadian space company MDA to construct the Lightspeed satellites. As a result, the company anticipates “total capital cost savings” of approximately $2 billion.
Telesat plans to begin launching the initial Lightspeed satellites in mid-2026, with global service commencing once the first 156 satellites are in orbit. The comprehensive network is set to consist of 198 satellites.
The company’s stock value rose roughly 40% in premarket trading, peaking at $8.45 per share. Telesat CEO Dan Goldberg expressed pride in the team’s efforts to optimize the project, resulting in significant cost reductions.
Previously, Telesat had contracted Thales Alenia Space to manufacture the satellites, with an estimated project cost of $5 billion. This encompassed satellite construction expenses of around $3 billion, alongside rocket launches, the establishment of ground infrastructure, and the development of software platforms to operate the network.
Telesat clarifies that its Lightspeed network is not intended to directly compete in consumer markets against SpaceX’s Starlink or Amazon’s Kuiper. Instead, it will primarily focus on enterprise customers, including government and commercial entities, similar to the markets that Starlink has already penetrated.
In its second-quarter results, Telesat reported $180 million in revenue, a 4% decrease compared to the same period the previous year. However, the company experienced a significant shift in net income, jumping to $520 million in the quarter, notably surpassing the previous year’s net loss of $4 million. This change was primarily attributed to a $260 million payment from the FCC for clearing spectrum for 5G usage in the United States.
Telesat reaffirmed its revenue guidance for the full year 2023, anticipating earnings between $690 million and $710 million.