Canadian satellite company Telesat has been in news in recent times with its innovative and ambitious connectivity plans, big ticket contracts from the Canadian governments, and its announcement last month to become a public company through an agreement with Nasdaq-listed Loral Space & Communications and Public Sector Pension (PSP) Investment Board and Investments.
In an interview, Stephen Hampton, Manager, Government Affairs, Telesat shares more details around the agreement, the company’s business plans, and impact of COVID-19 on the satellite industry.
Could you share more details around the merger plan and developments since the announcement?
This transaction will rationalize our corporate structure and allow public market investors, including Loral’s stakeholders, to own Telesat directly, and provides Telesat access to the public equity markets to support its compelling growth initiatives, including our advanced LEO satellite network.
We expect the transaction to close in the second or third quarter of 2021, subject to the receipt of required regulatory approvals, the approval of Loral’s stockholders (including a majority of Loral’s stockholders not affiliated with MHR Fund Management, PSP Investments, or other transaction participants) and other customary conditions.
ALSO READ: Canada’s Telesat and Nasdaq-listed Loral Space will merge to form new public company
Telesat is a dominant player in Canada. Are you looking at a stronger play in the US and other markets with this move?
Telesat is headquartered in Ottawa, Canada, and we have offices and facilities around the world. Similarly, our offerings for aeronautical, maritime, enterprise, telecom, and government networks have truly global requirements and scope: for instance, Telesat’s Low Earth Orbit network will ensure that airline passengers remain connected, wherever they are, including international routes that travel over the Polar Regions.
Our LEO network is inherently global by design, and we expect our presence to grow substantially as it will offer pole-to-pole fiber-like connectivity with scalable, concentrated capacity. This work will also continue the relationships we have with the Canadian, US and other allied governments.
In the US, we have secured revenue-generating contracts for modeling and demonstrating how Telesat LEO commercial satellite services can be leveraged by the US Department of Defense for low latency, highly resilient services. We are also working with a number of partners in the US to demonstrate the LEO value proposition to government users, including DARPA (Defense Advanced Research Projects Agency). Telesat has been contracted for the development and in-orbit demonstration of commercial LEO spacecraft buses in a LEO network as part of DARPA’s Blackjack program. With Lockheed Martin we’ve joined the team that was recently awarded the Space Transport Layer Tranche 0 contract by the US Space Development Agency (SDA).
Similarly, in Canada, Telesat is working closely with the government to ensure affordable, high-speed broadband connectivity across all of Canada with Telesat LEO. Earlier this year, Telesat and the Government of Canada finalized a $600M (CAD) agreement to enable Internet and mobility service providers to acquire Telesat LEO capacity at substantially reduced rates to bring universal broadband connectivity to rural, Northern and Indigenous communities across Canada.
Could you elaborate on some of the latest innovations from Telesat, especially the LEO constellation?
At Telesat, we pride ourselves on our long track record and culture of innovation. Telesat LEO is a great example of this, but not the only one. We were the first to provide Internet access to ISPs over satellite and more recently, the first in the world to conduct a 5G backhaul demo over LEO satellites.
Our LEO network will be the first integrated space-ground software-defined LEO network. It will revolutionize global broadband connectivity by delivering affordable, Gbps data links for enterprise, telecom, and government customers through its sophisticated design and unique responsive technologies. To make this possible, Telesat LEO will incorporate leading edge technologies like optical inter-satellite links (OISLs) and direct radiating phased array antennas. Through high capacity OISLs we will have interconnection between satellites for lightning-fast, highly resilient, multi-transport space mesh network. Each satellite will be equipped with direct radiating phased array antennas with hopping beams that will instantaneously and dynamically steer beams to focus multiple Gbps of broadband capacity into demand hotspots like communities, airport hubs or sea ports.
Telesat has already completed our satellite and system design and is working towards the goal of launching the first satellites in two years.
With Amazon and SpaceX are also launching from LEO in a bid to deliver broadband services in far-flung parts, how do you see the competitive landscape?
The satellite communications market has always been a competitive and dynamic industry. Telesat has been one of the world’s largest and most successful satellite operators for over 50 years and we have a deep understanding of our enterprise, telecom, mobility and government customer’s needs and applications. The competitive LEO constellations are designed to provide direct-to-consumer broadband services. Our network was designed for affordable, enterprise-grade connectivity for our aeronautical, maritime, enterprise, telecom, and government customers.
At Telesat, we strongly believe that LEO satellites are key to universal global connectivity. However, not all LEO networks are the same. Our LEO satellites have a sophisticated design — built specifically with our enterprise customers’ unique needs in mind — that puts our network in a strong position to compete globally.
What are you hearing from your customers in terms of the new types of innovation and solutions they need in order to modernize?
The creation of Telesat’s LEO global network is in direct response to the needs of our customers. LEO satellites can reach the most remote and rural areas as well as strategically important locations like the Arctic to meet national security, public safety, and other needs that require high resiliency, high-speed, and low latency communications.
Our LEO network will consist of hundreds of advanced satellites that create a highly resilient system to allow for the secure, flexible distribution of data. Telesat LEO will leverage global network standard interfaces that enable simple, seamless integration with customer’s networks, without the need to integrate proprietary hardware or software. Our customers want to support cloud-based applications, VPN, FTP encrypted file transfers, and IPSec tunnel encryption, all of which time out on today’s GEO satellites. Our LEO satellites have less than 50-m latency, resulting in fibre-like connectivity from space.
ALSO READ: Why maps point North on top?
What do you think is the impact of COVID-19 on the space and satellite industry — short and long term?
Connectivity at home is more important than ever. Since Telesat provides critical satellite communications infrastructure to its customers, we leveraged our comprehensive business continuity plans to ensure continued operations of satellites, network, and teleport infrastructure and deliver consistent service to our customers.
Early in the COVID-19 pandemic, some of our customers in the aero and cruise connectivity markets reached out to us to seek relief. With about 10% of our total revenue typically coming from customers providing broadband to plans and ships, this is one challenge that stood out early on, but by remaining in continued dialogue with impacted customers, we were able to work with them to find mutually productive and beneficial ways forward during this challenging time. As the vaccine rolls out, we expect these industries will normalize and return to where they were pre-COVID.
While certain industries our clients work in were significantly impacted at the onset of the pandemic, others – such as telecom – were the opposite. We received several customer requests for additional capacity to meet the increased demand related to teleworking, tele-education, and video streaming, as well as to handle increased traffic on existing networks – and we delivered this capacity within days of the request.
Despite all that is going on, everyone at Telesat remains committed to achieving our 2020 strategic goals and looks forward to continuing our important work into 2021, especially with the development of our LEO network.
How do you view the policy environment going forward?
Governments play an active and key role in large, global space-based projects and more and more governments are turning their focus to the surging New Space Economy as a result of the strategic nature and significant economic benefits associated with it.
Taking LEO as an example, we see governments all over the world investing billions of dollars into their development given the strategic, domestic benefits they drive from job creation, to IP development, to new exports. COVID has only exacerbated the role of governments and this can be seen in how governments are developing more innovative solutions to driving universal connectivity and economic growth.
As we step into Industry 4.0, we believe that the space sector will continue to innovate, disrupt and drive new solutions, as it has been doing for the past several years as space has become more accessible. With more startups entering the market, this is hands-down the most exciting time to be working in space and we are going to continue to see a ton of advances and disruptive news from the space sector. This is especially true as we move closer to LEO, which will open up opportunities for an array of technologies like IoT and remote sensing, and hosted satellites in our network.
