Rendering of Telesat’s Low Earth Orbit Broadband Constellation
Teresat
Shares of Canadian telecom satellite operator Telesat soared on Friday after the company said it would replace suppliers for its planned Lightspeed global internet network.
Canadian space firm MDA will manufacture the Lightspeed satellites on behalf of French-Italian manufacturer Thales Alenia Space, resulting in “an estimated $2 billion reduction in total capital costs,” Telesat said. .
The company plans to begin launching its first Lightspeed satellites in mid-2026, with global service beginning once the first 156 satellites reach orbit. A complete network is planned to consist of his 198 satellites.
Telesat shares rose 64% from a previous closing price of $8.45 a share after heavy trading in early trading, before falling slightly to nearly 50%.
“I am very proud of the Telesat team for their innovative work towards further optimization … resulting in dramatic cost reductions,” said Telesat CEO Dan Goldberg. Goldberg said in a release.
Telesat shares surged Friday after the company swapped internet satellite suppliers.
The company previously contracted Thales Alenia Space to manufacture satellites at an estimated cost of $5 billion to build the network. That includes about $3 billion for satellites, plus costs for launching rockets, building ground infrastructure, and developing software platforms to run the network. .
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Goldberg previously told CNBC that Lightspeed will compete in the direct-to-consumer market with SpaceX’s Starlink and Amazon’s Kuiper. Instead, Telesat will maintain Telesat’s existing focus on enterprise customers, the government and commercial markets that Starlink has expanded over the past year.
Telesat also reported second-quarter results on Friday, down 4% year-over-year, including $180 million in revenue. Telesat’s net income surged to $520 million in the quarter, compared with his net loss of $4 million in the same period last year. The company credits this dramatic shift largely to his $260 million paid by the FCC to clear frequency bands for his 5G use in the United States.
The company reaffirmed its earnings guidance for the full year 2023, expecting earnings of $690 million to $710 million.