Another tile falls on the promoter of a constellation of telecommunications satellites that promises major spin-offs in Quebec. Telesat will have to raise several hundred million dollars more to get its project into orbit, adding to the uncertainty.
Posted at 7:00 am
Though Quebec and Ottawa pledged $2 billion in public funds to the Ontario company — sums that have not yet been paid — it fell short of $2.5 billion to meet the ambitions of the Lightspeed constellation, which has already been downgraded had been.
The company declined to give any further details The press the means it intended to use to overcome these financial contingencies.
“Lightspeed represents an attractive investment opportunity, but there is no guarantee these discussions will result in a positive outcome,” Daniel Goldberg, Telesat’s President and CEO, told investors last week.
Telesat wants to launch satellites into low orbit – more than 1,000 km above the earth – to provide high-speed Internet access in remote areas, among other things.
Due to inflation-related cost explosions, the constellation of 298 satellites is eventually reduced to 188 units. These satellites are to be built by Thales Alenia Space.
This slimming diet is not enough. Additional funds are needed to finance this constellation, the bill for which was initially estimated at 6.5 billion. Mr. Goldberg did not quantify the extent of the cost overruns. He limited himself to saying that they accounted for less than 10% of Lightspeed’s original bill.
“The original plan didn’t materialize,” said Caleb Henry, chief analyst at US aerospace firm Quilty Analytics, in a telephone interview.
The longer Telesat takes to make headway, the more time its competitors have to build and launch their own satellites. That’s why it’s likely to get harder and harder.
Caleb Henry, Principal Analyst at Quilty Analytics
These strong competitors are players like SpaceX (Elon Musk) and Amazon, who, like other European promoters, have big ambitions.
In February 2021, the Legault government had pledged $400 million to Telesat in exchange for creating around 300 jobs in the Gatineau area, where the company promises to build half a dozen facilities. A few months later, Ottawa had granted $1.5 billion. Together, the two levels of government agreed to fund approximately 30% of the constellation’s original bill.
Telesat wanted to get the missing 2.5 billion from agencies like Export Development Canada (EDC) and Bpifrance, but this has not yet happened. Bpifrance risks becoming a shareholder in OneWeb, a rival constellation of Lightspeed, following its merger with Eutelsat. The French agency is Eutelsat’s main shareholder. Mr Henry wonders if this might cool the French agency on Telesat’s ambitions.
The American analyst also wonders where the Canadian company should collect the missing funds.
“SpaceX has the ability to compel markets, Amazon is backed by Jeff Bezos and OneWeb has a diverse shareholder base,” Henry said. I have yet to see Telesat do the same. »
According to our information, Telesat has not yet returned to knock on the door of the Legault and Trudeau governments. Last winter, Economy and Innovation Minister Pierre Fitzgibbon indicated that Quebec had contributed enough to this project – which is still considered important by both levels of government.
A Telesat subcontractor, Ontarian MDA, which operates a factory in Sainte-Anne-de-Bellevue, is responsible for manufacturing the active antennas for the satellites. It was to expand its facilities and employ 280 people thanks to a loan of 50 million. The company declined to comment on the turn of events at Telesat.
- Year in which Telesat intends to station its first low-orbit satellites