In February, Telesat finally came forward with the long-awaited announcement of the details of its Low-Earth Orbit (LEO) constellation, a venture away from Geostationary Orbit (GEO) for the Canadian satellite operator. In its largest procurement ever, Telesat has contracted Thales Alenia Space (TAS) to build its initial constellation of 298 Ka-band satellites. The constellation, called Lightspeed, will provide broadband internet service for enterprise verticals, serving Mobile Network Operators, Internet Service Providers (ISPs) with backhaul, along with aviation, maritime, and government markets.
Telesat plans to invest $5 billion in the system, which comprises 700-kilogram satellites designed to have phased array antennas and four optical Inter-Satellite Links (ISLs). Lightspeed is set to begin launching in two years, and the satellites are designed to last 12 years in orbit.
In this interview, Telesat CEO Dan Goldberg talked with Via Satellite Managing Editor Rachel Jewett and Editorial Director Mark Holmes, about the company’s massive investment into its future in LEO.
VIA SATELLITE: You’ve been working with Thales for a few years on Lightspeed, talk us through why you chose to go with Thales as the manufacturer.
Goldberg: Thales Alenia Space [TAS] is the world leader in delivering NGSO [Non-Geostationary] constellations. We wanted a partner who could deliver more than just high-performing, advanced satellites – we wanted somebody who could deliver a high-performing, integrated, end-to-end network. They build state-of-the-art satellites and have a really good track record through their work with Iridium and O3b.
Performance of the network was also vital. We’re not going to spend $5 billion on a network that isn’t absolutely kick ass. With other folks getting to market, somebody that has a lot of schedule integrity was also important. Finally, price was another consideration — we’re always focused on achieving the kind of returns that we need.
In addition, TAS gets strong support from the French government. We’re financing the constellation in part by working with the export credit agencies, and their export credit agency is supportive of their business.
VIA SATELLITE: How has the system evolved over its years-long development?
Goldberg: The irony is it hasn’t evolved that much. We’ve always had the same intelligent orbital architecture, mixing Polar Orbits with the Inclined Orbits. We always knew that we wanted process payloads because that’s just a really efficient way to route traffic, to improve performance. We always knew we wanted the Inter-Satellite Links, because we think that’s vital for serving certain verticals and for reducing the amount of gateways you need, as well as increasing resiliency and redundancy. None of those things have changed; the focus was really just on refining the design.
There were some trade-offs that you always do when you’re building out a complex system like this. We were burning down risk on some of these key technologies: the processor, the ISLs, the phased array antennas. You could say you want all those things, and all those technologies are ready for primetime, but how you integrate them, what trade-offs you make — that that’s the work we’ve been doing.
VIA SATELLITE: A couple of years ago, you mentioned that the connected car might be a significant opportunity for your LEO system. Do you still believe that, and do you see a significant opportunity in mobility, considering the state of the market?
Goldberg: Most of the revenues we expect to achieve are on the backhaul connectivity market for Mobile Network Operators, telcos, ISP enterprises, and municipalities, and aero, maritime, and government. We do believe that IoT [Internet of Things] connected cars over time, might become more meaningful opportunities.
Clearly, COVID has disrupted aero and some of the maritime sector, cruise in particular. But Lightspeed connectivity won’t be available until late 2023 into 2024 – if we’re still under the thumb of COVID by then, we probably have bigger problems than missing out on those verticals. I think people are going to fly again, people are going to go on cruises again, so our business plan is intact.
The design for the most part has stayed the same, that’s true for our business case, and that includes changes in the competitive environment. Yes, Starlink’s further along. Yes, OneWeb has gone into and come out of bankruptcy. There’s Viasat, there’s [SES] mPOWER. But I don’t think the competitive environment is that different than what we envisioned when we started down this path.
I wish we had started 12 months earlier. We’re about nine months behind where we want it to be, and our schedule has pretty much moved out month-for-month. Some of that was COVID, some of it was just everything taking a little bit longer than we had bargained for. But when I step back — it costs as much as we expected, includes the same kind of performance features, sees the same market opportunity, and enters pretty much the same competitive environment that we envisioned we’d be launching into.
VIA SATELLITE: I know you’re still a couple of years away from launch, but in 2030, what percentage of revenues do you expect Telesat to derive from LEO vs. from its GEO satellites?
Goldberg: I don’t have a crystal ball, but I can tell you how we’re thinking about it. Today our business is almost equally split between video and non-video. You don’t invest $5 billion and not get a ton of capability and capacity — that’s going to be the massive growth driver for Telesat going forward. Not to say that there aren’t opportunities in GEO, but our expectation is that LEO will allow us to grow by multiples above where we are today.
Our new offering will be a connectivity service, broken up into those different verticals that I’ve spoken about. We’re providing each of those verticals with a similar service — a high-throughput, low latency broadband connectivity service. We’re seeing demand for that requirement surging in all those different verticals.
VIA SATELLITE: So, if I said 80 percent of your revenues in 2030 coming from LEO rather than GEO, do you think that’ll be accurate?
Goldberg: I don’t know, I don’t want to give a glib answer, but 80 percent might be too much. With multiple billions of dollars in play — the opportunity on LEO is massive.
VIA SATELLITE: As you are moving enterprise services to LEO in the next few years, what will you do with that GEO capacity that’s serving enterprise applications now?
Goldberg: Not all of the enterprise business is well-suited to move to LEO. Some of it is supporting consumer broadband for folks like Hughes and Xplornet, those are long-term deals. We’re not focused on the consumer broadband market with Lightspeed. Maybe down the road we’ll reconsider if there’s a cheap, high-performing, easy to deploy user terminal that makes it easy for us to vertically integrate ourselves into that market. But we have services in X-band, L-band, and some C-band services that aren’t as well suited for LEO.
Broadband connectivity to planes and ships, on the other hand, is going to be really well-supported on LEO. LEO is also going to have a real competitive advantage for some of the backhaul applications for Mobile Network Operators and rural broadband.
VIA SATELLITE: What is something that you aren’t doing now that Lightspeed is going to give you the capability to?
Goldberg: It will transform the broadband connectivity experience for almost everything. We’re going be able to deliver gigabits of capacity to airplanes and cruise ships. The system is so flexible, and we can concentrate so much capacity in one place – for instance, the system can focus over 20 gigabits per second over an airport, which nobody can do right now. For remote communities, we’ll be able to provide tens of gigabits per second of capacity if they need. And it can provide a level of redundancy and resiliency. From any spot on Earth, you’re going to be able to ‘see’ from three to six or seven of our satellites. We’ll also have the ability to manage around diverse weather, a capability just unheard of in a GEO world.
We’re going to be able to do some cool stuff with our optical links. If we’ve got a customer that has their own satellite that has optical links that are compatible with our optical links, their satellite can be doing environmental monitoring and it can connect into our optical network and instantaneously route that traffic anywhere on Earth. That’s a really powerful capability for government users and other folks that want to launch their own satellites, but don’t have the need or the scale, or all the competencies to launch a full blown, optically-linked, interconnected satellite constellation. We expect that there are going to be users that are going to want just that.
VIA SATELLITE: Would you consider linking your LEO satellites to your GEO satellites?
Goldberg: Probably not. A big focus is low latency. The minute you go back up to GEO, you’ve just given that up. Given that we’ve got full global coverage, given that all of our satellites are interconnected optically, it’s just not obvious to me that we would need to do that. It might be the case that some folks in GEO would like to connect to LEO to route traffic or the like, but it’s not our focus.
VIA SATELLITE: You signed a contract with the Canadian government to bridge the digital divide with capacity delivered through MNOs. Is there a user terminal in development for consumers under the agreement?
Goldberg: No, not for consumers. The government of Canada is contributing $600 million Canadian dollars that they pay over a 10-year period once our constellation is in service. We’re creating a big pool of low-latency bits over Canada, and we’ll be making that capacity available at very low rates that we’ve agreed to with the government. We’ll make that available to Mobile Network Operators, to ISPs serving rural and remote communities. Those operators and ISPs will then distribute the capacity to the end users. Some of that will be a fixed wireless service to somebody’s home, some will be wireless such as LTE or 5G, and some will be with municipalities.
We have user terminals that we are developing for each of the verticals we are serving. For some applications, it might be a dual parabolic dish solution. Probably with some redundancy in a remote community, bringing gigabits of capacity into those communities that likely have some redundancy. If it’s on a tower, it might be a flat panel antenna. We’re doing development work on that. On cruise ships, it will probably be dual parabolic antennas, and flat panel antennas for airplanes with smaller ones on business jets. We’re working with partners on all of those right now.
VIA SATELLITE: Will you be able to secure similar deals outside of Canada?
Goldberg: We’re providing, in connection with universal service programs, rural broadband programs in Indonesia throughout Latin America, in the U.S., throughout Canada. Now we’re going to show up with the Lightspeed constellation. In the RDOF [Rural Digital Opportunity Fund] auction in the United States, which Starlink was a big recipient of, low latency was one of the key performance criteria that the FCC applied. If you want to receive a broadband subsidy, you’d better roll out low-latency services, because that’s state-of-the-art. That’s what you need if you want to engage in e-commerce, distance learning, cloud-based services. We’re going to reenter these markets with a super low latency offering that is much more reliable, much more diverse, much lower cost. It’s going to be a no-brainer for many of these regions.
We’re going to be working with local partners, just like we do today in all those countries. We’re not doing the deals with those governments — our customers are. But they need our services to provide that backhaul connectivity.
VIA SATELLITE: We did an interview in the last edition of Via Satellite with Sunil Bharti Mittal to talk about his investment in OneWeb. I’m going to quote him, he said ‘I think two satellite constellations in LEO will be enough. Perhaps there’ll be space for three, but definitely not four.’ What are your views on that?
Goldberg: I don’t think it’ll be a winner-take-all market. I agree with him, whether it’s two or three or four, that’s kind of the number you’re talking about for big, high-throughput broadband LEO constellations. It’s a big market, but it’s only so big. You’ve got issues around spectrum and how many constellations can have access to enough spectrum to provide the kind of broadband connectivity that the market needs. Telesat is in a very strong position given our spectrum rights.
I think we’re going to be one of the winners. If you speak to people who are informed about what constitutes the most capable constellations for the enterprise verticals that we’re focused on, I think they’ll tell you that our constellation is probably the most capable, the best designed, and that we’re a very credible operator to deliver on those services. Given the strength of our design, given the industrial partners that we’re working with, given our long-standing expertise, strong reputation with regulators, financial markets, and the customer community — I’d bet on Telesat.
VIA SATELLITE: John Padgett of Carnival Cruises said in a recent interview for an upcoming Via Satellite story that he thinks it’s a few years before it’s relevant for cruise companies such as themselves to consider a LEO option because of needing coverage all over. What would you say to that? Obviously, they’re tied in with SES, but he didn’t seem overly enthused about the prospects of going in on a LEO solution.
Goldberg: I think all the major cruise lines are very excited about the prospect of LEO. But John would be right, our LEO constellation isn’t going to have worldwide coverage until 2024. But we’re the only ones that are going to offer full, global coverage. With all respect to SES, one of the limitations that mPOWER has is that it’s only equatorial – not global coverage. Our LEO constellation will have full global coverage, including the poles. Because of the Inter-Satellite Links, you’re always connected, always covered. It’ll be much more low latency, which Carnival and others are quite focused on. We’re going to be able to lay down more capacity than anybody else. In 2024, I think we are going to have the best value proposition in the market for cruise, for aero, and for rural broadband connectivity.
VIA SATELLITE: We’ve talked about government, mobility, and enterprise. Which of the target markets do you see as being the biggest?
Goldberg: I expect that the terrestrial backhaul connectivity market will be the biggest market. This includes rural broadband programs like the one we're doing in Canada. Following the backhaul connectivity market, aero and maritime are going to be very large opportunities. If I had to rank, it's probably terrestrial, then aero, then maritime, and government.
VIA SATELLITE: Elon Musk just said that he’s thinking about an IPO for Starlink and he talked about the enormous capital that goes into building a system like this. With OneWeb going in and out of bankruptcy, LeoSat’s failure, what do you see as the biggest challenge to making Lightspeed a success?
Goldberg: We’ve been providing satellite services for over 50 years, and have always upgraded our technology and capabilities. Lightspeed is the next natural step for us. The only big difference is we’re going from GEO to LEO – but you still need a satellite bus and a satellite payload, and you’re still uplinking and downlinking, and still deploying integrated landing stations. We’ve also got a world-class group of partners that we’re working with, including Thales Alenia Space. In general, it’s just doing what Telesat’s good at — focused execution.
If Starlink goes public, I think that they should get a very good reception in the market. Investors have come to understand that there’s a promising opportunity associated with space, and Low-Earth Orbit satellite constellations are a very promising way to bridge the digital divide, there’s a big addressable market there. We ourselves announced that Telesat will become a public entity, probably mid- this year. My expectation is that investors will be extraordinarily excited about our LEO plans as well. It’s a great time for LEO and I think the financial markets will see that.
VIA SATELLITE: Even though you’re incredibly bullish about this, LEOs have had a checkered history. When you look at your career personally, from New Skies to Telesat, is making this a success the biggest challenge of your career as a satellite C-suite executive?
Goldberg: It’s the biggest undertaking of my career and of Telesat’s history. Telesat has invested billions and billions of dollars over 50 years in its fleet, but this single project is the biggest in our history. It’s an ambitious project for sure. Telesat didn’t have to do this — we’ve got an existing business. But we know where the market is going, we know what our customers are looking for, and we know what technology is capable of. I’m really persuaded of the fact that this is the right move at the right time. VS