Telesat CEO: This is How We Are Going to Stay Ahead

It is a special year for Telesat as it celebrates its 50-year anniversary, a remarkable achievement for the company and making it one of the oldest satellite operators around. But, while the operator has a great history, it also has an exciting future. Of all the big, traditional Fixed Satellite Services (FSS) operators, it has some of the most exciting plans when it comes to investing in new Low-Earth Orbit (LEO) satellite capability. In fact, it could be one of strategies that will ultimately define the tenure of Telesat CEO Dan Goldberg. Goldberg is now one of the most experienced CEOs in our industry. and has seen huge changes over the last two decades. In this exclusive interview, Goldberg talks about Telesat’s road ahead and how it can use its history to shape its future.

VIA SATELLITE: Telesat is celebrating an important anniversary this year. Is the company about to enter into a critical period of its history as it looks to become a more prominent leader in the sector over the next few years?

Goldberg: We are proud of the fact we have been going for 50 years. Telesat got started at the beginning of the commercial satellite industry. Over that period, the company achieved a range of firsts, like launching the industry’s first domestic communications satellite. Loral Skynet is part of Telesat too and in 1962, Telstar 1 — built by our predecessors at AT&T and Bell Labs — delivered the first transatlantic video transmission between Europe and North America. We then created the first Direct-to-Home (DTH) satellite and followed that with the first two-way broadband satellite in Ka-band. In some ways, every year is a critical year. These next ones are critical too.

Telesat is now embarking on a very ambitious and disruptive plan with our LEO satellite constellation. In some ways, this is a new chapter, but in many ways a continuation of a half century trend of identifying market opportunities and then adapting and developing satellite technology to give our customers an edge in serving those opportunities. What the market wants is always evolving. I think Telesat has been successful because we are an innovator and we are passionately customer focused. By combining those core competencies, Telesat has always succeeded in bringing the next best thing to the market. We are truly proud of the last 50 years and excited for the next few ahead.

VIA SATELLITE: Could you tell us about your potential capital investment plans and how you might mix ordering satellites in Geostationary Orbit (GEO) compared to other orbits? Considering your ambitious LEO plans, will you completely scale back what you are doing in GEO?

Goldberg: Around a year ago, we launched two large, state-of-the-art GEO satellites, Telstar 18 VANTAGE and Telstar 19 VANTAGE. I am happy to say that both of them are finding good reception in the market. We believe that there is a massive market out there for global broadband connectivity. I will flag some of the key verticals we’re focused on for our LEO constellation: the backhaul market for fixed line providers and mobile network operators, aeronautical and maritime connectivity, and government services. We are not focused on the direct-to-consumer market. Consumers and end users all over the world will benefit from our LEO constellation, but more in terms of our ability to bring cost-effective, high performing backhaul. I think most consumers will enjoy broadband connectivity wirelessly, so the ability to bring big, fast, affordable pipes to help push out to the edge of the network, is going to expand who’s able to enjoy great broadband connectivity. So, given what we see in broadband, and given what customers are looking for, we think the LEO constellation that we have designed is going to serve that market extraordinarily effectively, and actually disrupt that market. But, we also believe that there will continue to be a role for GEO. We don’t see our DTH satellite business moving any time soon to a LEO constellation. For point-to-multipoint broadcast distribution, we think GEO satellites are fantastic. I also suspect that there will be something of a tail on our non-broadcast business. The reality is customers have built large networks and moving those networks is an effort.

VIA SATELLITE: We have seen SpaceX move forward with Starlink and Amazon potentially with Project Kuiper. Hugely ambitious plans backed by billionaire business owners. How much pressure do you see these systems putting on the traditional players in the industry such as Telesat, which also has ambitious plans?

Goldberg: The reality is that there is a massive market opportunity for global broadband connectivity. The systems that you mentioned are largely focused on consumer broadband. But when you have companies like Amazon and SpaceX which are leading, disruptive companies across a number of sectors, it flags to the market more broadly that there is a huge opportunity for global broadband connectivity, and that this market can be effectively served by LEO satellite constellations. So, in that respect, having companies like Amazon and SpaceX that are broadly admired, not just in the satellite sector, but throughout the world, endorse and validate the promise of LEO is helpful — and something that will not only benefit Telesat, but heighten awareness around the world about the importance of satellite and the role it can play. It is important when you are dealing with regulators [that] are making decisions about what is the best use for scarce radio spectrum. It is important for customers, as they are thinking about their future networks and how those networks will be designed.

I think the announcements, and the work that SpaceX and Amazon and others are doing with these new, advanced networks is positive for the industry, and positive for Telesat.

It should focus established operators in the sector, [and] there are new entrants that have identified our markets as having great promise. These new entrants are approaching the opportunities in ways that may be a little different to how the traditional operators have done it the last few decades. I think that will prompt all of the more established players to take a fresh look at how they are going to market and how they are serving their customers, so they can ensure they remain competitive and are positioned to take advantage of that large market.

VIA SATELLITE: Can operators survive just being standalone GEO operators moving forward, or will they be forced to launch satellites into other orbits?

Goldberg: I start with the question of “what is the market opportunity out there, and what are the feature sets that we as providers need to bring to the market in order to serve those customers and capture that demand?” For broadcast of video services, GEO satellites have huge advantages that give them an edge over other technologies. It is just a very efficient and cost-effective architecture to serve those requirements. For broadband markets, it is our view that providing lower latency is going to be very important to give our customers a broadband experience that is comparable to what can be delivered over terrestrial networks. We strongly believe that low latency is going to be essential for that. Then once you have LEO, you have a more distributed, resilient network because you have multiple satellites, and an ability to leverage volume manufacturing. There are a bunch of other benefits once you go to a Non-Geostationary Orbit (NGSO) constellation — benefits beyond just low latency.

When I look at what other players are doing, actions speak louder than words. SES was the first mover — in terms of established operators — to embrace NGSO with its purchase of O3B. Intelsat did the commercial tie-up with OneWeb. Eutelsat is looking at a narrowband, Internet of Things (IoT) type constellation and then of course there is Telesat’s initiative to launch a high-throughput, LEO, Ka-band constellation. I think this might be the new normal. We will see a more horses for courses approach in terms of what orbits the industry leverages to serve various customer requirements.

VIA SATELLITE: For all these satellites going up, the satellite industry is going to have to go beyond broadcasting — and even things like connected transportation, oil and gas, and government. What new verticals can you imagine the industry playing in over the next few years?

Goldberg: Before getting distracted with more nascent opportunities, I go back to the markets that are the bread and butter of all the communications infrastructure service providers, and I include the fixed line players and the satellite players. These are huge and growing markets. Look at any forecast for Internet Protocol (IP) traffic — the demand for bits and broadband connectivity is surging. When we look at those four different verticals that I flagged —backhaul, aero, maritime, government — the demand is still growing at a strong annual rate. We believe that when you come to the market with a capability that is disruptive, disruptive in terms of performance (high throughput, low latency), plug and play (standards based, layer 2 Metro Ethernet Forum compliant), and attractive economics, the addressable market is meaningfully larger than the more discrete market that the satellite industry has targeted or participated in over the last few decades.

There is a bigger addressable market, and secondly you will have some elasticity there. If you bring a superior capability with a lower price, you will grow the whole market too.

Then these other more nascent applications — like IoT, for example — which will add incremental demand for broadband connectivity. Given the type of architecture we are bringing, I think we will capture that in those different verticals like 5G, 4G, 3G, and even 2G sites. They will be vacuuming up those IoT type of bits that will get backhauled back to the internet backbone. In aeronautical, there will be a lot of Machine-to-Machine (M2M) traffic with all the sensors that will be on planes, and the same holds true with maritime and government applications.

The objective is to bring a global broadband architecture that is distributed, resilient, low latency, high-throughput and affordable. With that, we can address all of the existing opportunities that are out there, but are also well-positioned to absorb and address the nascent applications that will come.

VIA SATELLITE: Traditionally, broadcasting revenues have been the lifeblood of the satellite industry. Will that change? How do you see the mix of broadcast and other verticals significant change over the next few years?

Goldberg: It is an interesting question. When we talk about broadcasting, what does that even mean anymore? Does that mean over-the-air? In regulatory circles, people think about broadcasters, and people with TV licenses. That is what broadcast used to mean. You have satellite broadcasting like Direct-to-Home (DTH), you have cable, and you have Netflix and the like. In answering the question, the traditional broadcast industry for the satellite market is definitely more mature in certain parts of the world. In some markets, you are seeing subscriber erosion as consumers move to more Over-the-Top (OTT) video offerings. So, it is still a very significant business, but there are dynamics there that are slowing its growth and leading to subscriber reductions.

In other markets, there are still opportunities to grow that traditional business. Then you look at the broadband connectivity market, so many of those bits are video bits. Is that broadcasting? It is what you have in a world that is converging. It is what persuaded Telesat in addition to building very good DTH/Direct Broadcast Satellite (DBS) infrastructure, we need to also create a disruptive architecture that provides broadband connectivity, a lot of which will be video and broadcast, but not in the traditional sense. What our customers want and what the markets want evolves, and we need to evolve our architecture to effectively deliver what the market wants today, and well as what will be needed over the horizon.

VIA SATELLITE: Is this an exciting time to be a C-Suite executive in the satellite industry? How would you characterize the challenges ahead for you and your management team?

Goldberg: It is an extraordinarily exciting time, in that it feels like there are a number of forces that are converging to allow us to do things in space that we always envisioned, where previously the technologies weren’t ready for prime time. The technologies I have in mind are computing processing in space, inter-satellite links — optical, phased array antennas so you can dynamically move your capacity around in the way you need to. That phased array technology will also show up in user terminals and allow us to serve the user much more effectively. All of those technologies are now ready for volume manufacturing and implementation at cost points that will allow us to have a disruptive economic advantage in terms of delivering low-cost bits. The other feature on the technology side is more plentiful launch options, so rockets that are very capable and affordable. New entrants are coming into that market that will increase options and affordability.

The last thing I would talk about is the demand side. People want ubiquitous broadband connectivity and these technologies, bought together and implemented in intelligent ways, allow us to provide a phenomenal, transformative, disruptive service that we just could not do previously.

Telesat and a few other companies are at the forefront of bringing all of these technologies together and targeting that broadband market. That is exciting.

As far as challenges, the challenge will be to bring to market this very disruptive capability leveraging all of these technologies and bringing them to the market in a powerful way. There will be technical, regulatory, and commercial challenges as we execute our plan. With our 50-year history of customer collaboration, engineering excellence and talented, passionate employees, Telesat is uniquely positioned to meet those challenges. It is an exciting time to be in this sector. VS

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