Canadian telecommunications satellite operator Telesat saw a surge in shares after revealing that Canadian space company MDA will now be responsible for building the Lightspeed satellites. This change in supplier from French-Italian manufacturer Thales Alenia Space will result in significant cost savings of approximately $2 billion for Telesat.
The company plans to launch the first set of Lightspeed satellites by mid-2026, with global service becoming available once all 156 satellites are in orbit. The complete network is expected to consist of 198 satellites.
Following the announcement, Telesat’s stock jumped as much as 64% in early trading, before stabilizing to around a 50% increase from the previous close. Telesat CEO Dan Goldberg expressed his pride in the Telesat team’s innovative efforts, which have led to substantial cost reductions.
It is worth noting that Lightspeed is not intended to directly compete with consumer-focused satellite internet providers like SpaceX’s Starlink or Amazon’s Kuiper. Telesat aims to maintain its focus on enterprise customers, including government and commercial markets.
In addition to the supplier change announcement, Telesat also reported its second-quarter financial results. The company reported $180 million in revenue, a 4% decrease from the same period the previous year. However, net income saw a significant increase, reaching $520 million in the quarter compared to a net loss of $4 million in the previous year. Telesat attributed this positive shift primarily to a $260 million payment from the FCC for clearing spectrum for 5G use in the United States.
Telesat remains confident in its full-year 2023 revenue guidance, expecting to generate between $690 million and $710 million.
