By Ahmad Hathout
OTTAWA – Fresh off of finalizing a $600-million deal that would see the federal government purchase capacity from its constellation of low earth orbit satellites for broadband, Telesat CEO Dan Goldberg told the committee on industry Tuesday that there’s undeniable pressure on the company to deliver.
“We’re nine months behind where we wanted to be — Covid didn’t help for that,” Goldberg told the committee studying affordability and accessibility of telecommunications services. Goldberg was referring to build progress of its satellite fleet, which is set to deliver on the promise to provide capacity to all of Canada over 10 years. By then, the federal government hopes the entire country will have access to speeds of 50 Mbps download and 10 Mbps upload.
The company has yet to announce who’s building the satellites and who’s going to launch them, but Goldberg said Tuesday Telesat will address those unanswered questions in the “coming weeks.” He did say the company “in all likelihood” will be building the fleet in Canada — he noted Quebec. To begin delivering capacity, Telesat said it needs to launch at least 78 satellites, which it expects to do by the end of 2022, followed by another 220 satellites at different orbits.
Last week, the federal government announced an influx of an additional $750 million to the Universal Broadband Fund, which includes a fast-track stream for quicker builds. The government recognized the importance of low-earth orbit (LEO) satellites when it announced major investments in them in the 2018 and 2019 budgets, with Telesat held up as the one that will do the deed.
But Telesat is no SpaceX.
Unlike SpaceX, Telesat will not sell services directly to consumers; it will instead sell to providers, who will package services and deliver them to the consumer.
Unlike Telesat, Elon Musk’s SpaceX already has its Starlink product ready for beta testing in Canada, after the federal government gave the company the green light to operate. Company spokeswoman Patricia Cooper told the committee SpaceX put out feelers to Canadians on Friday for whoever wanted to participate in the “Better Than Nothing Beta,” a name from a billionaire who invented the “Boring Company” that sold 20,000 flamethrowers.
The beta includes a full kit of equipment to connect to the satellite for $649 and a monthly service fee of $129, Cooper said, with no data caps or contracts. The company had already started its beta in the United States a couple of weeks ago. Those prices are expected to decline over time.
SpaceX raised $1.9 billion in a funding round this summer, which furthers its efforts to upload more satellites to complete its Starlink fleet and deliver commercial services by the end of the year. It also qualifies for the Federal Communications Commission’s $20-billion Rural Digital Opportunity Fund.
SpaceX, unlike Telesat, makes and launches its own satellites and plans to have a constellation of over 4,400 of them in the sky. It reportedly has over 600 LEO satellites orbiting the earth now, and Cooper said the company would need to have satellites “in the mid one thousands” to have continuous coverage. It often launches 60 satellites at a time, with terabytes of capacity.
Cooper said SpaceX expects to be available across Canada before the end of 2022; that same coverage for Telesat is expected for the year after that.
These facts — the money supply, the number of satellites, the launch of beta testing, and SpaceX’s pace — are worrying to Goldberg, he said.
“We are in a massively competitive global environment,” Goldberg said. “I have a super high regard for SpaceX — they’ve been a great partner for us, they’re one of the most innovative companies in the world.
“I’m worried about being able to compete with SpaceX,” he said. “I’m worried about our ability to compete with Amazon when they come along [the e-commerce giant’s founder, Jeff Bezos, also founded space company Blue Origin].
“We have a great plan; we just need to get going on this,” he added. “We’re confident we’re going to be successful.”
That includes being able to assist in expanding the 5G ecosystem by beaming capacity to satellite dishes on towers, Goldberg said, adding it’s a “major part” of the company’s investment thesis.
He also acknowledged the benefits of having the likes of SpaceX over Canada, alluding to competition which breeds innovation. But at what cost? The space business is tough. It’s a capital-heavy environment that requires a lot of volume for coverage and no guarantee of success. There have been many bankruptcies: earlier this year, the U.K’s OneWeb, America’s Intelsat, and Australia’s Speedcast all filed for bankruptcy.
That reality is not lost on Musk, as Cooper recalls he said: “Our job here is, don’t go bankrupt.
