Canada's Telesat taps SpaceX to launch its broadband satellites in orbit

By Steve Scherer

OTTAWA (Reuters) -Canada's Telesat on Monday said it has sealed an agreement with SpaceX to launch its low-Earth-orbit (LEO) satellites from 2026, with the aim of providing global broadband service from space in late 2027.

LEO satellites operate 36 times closer to Earth than traditional ones so they take less time to send and receive information, leading to better and faster broadband service even in remote areas.

Telesat's LEO constellation is called Lightspeed.

"It is another big step forward on our path to get Lightspeed up there," Telesat CEO Dan Goldberg told Reuters.

Telesat Corp picked Elon Musk's SpaceX because it had "the best combination of price, performance, reliability and schedule tempo," Goldberg said.

No value was given for the contract, which covers 14 launches. Each Falcon 9 rocket will carry up to 18 satellites into orbit, putting the constellation on track for deployment by the end of 2027 when Telesat plans to provide global service, the company said. That is three years later than initially planned.

Shares in Telesat fell 5.3 percent to C$21.99 ($16.20), after rising as much as 3.2% in early trading.

Telesat last month said it would save $2 billion by awarding Canada's MDA Ltd the contract to build 198 satellites. In 2021, Thales Alenia Space had been given the contract.

"COVID hit, and supply chain issues hit, and inflation hit," and Thales told Telesat about two years ago it could no longer meet the agreed price and schedule, Goldberg said.

The SpaceX contract for the 14 launches "gives us scope to expand the constellation above and beyond the 198 (satellites) that we've committed to with MDA," Goldberg said.

Telesat is moving into the competitive new realm of LEO networks with the aim to service so-called enterprise customers who include mobile operators, governments, aircraft and shipping companies.

Most of the LEO competition - which includes SpaceX and its Starlink constellation and Jeff Bezos's Blue Origin and its Project Kuiper - is focused on the consumer market.

Satellite constellations have sapped large amounts of the U.S. launch supply in recent years with large bulk launch orders like Telesat's SpaceX contract.

Amazon in 2022 bagged the biggest commercial launch deal in history for 83 missions across multiple launch companies to deploy its Kuiper network. SpaceX aims to nearly double its annual launch rate in 2023 thanks to its growing Starlink constellation.

($1 = 1.3578 Canadian dollars)

(Reporting by Steve Scherer; Additional reporting by Joey Roulette in Washington and Fergal Smith in Toronto; Editing by Will Dunham and Sharon Singleton)