The Government of Canada is going all-in on Telesat’s LEO (Low Earth Orbit) satellite constellation, planning to spend up to $455 million (USD) over 10 years for affordable high-speed Internet connectivity, plus another $64 million via its Strategic Investment Fund (SIF). Telesat is expected to support around 500 Canadian jobs, invest $163 million in R&D over the next five years and promote STEM jobs and education in Canada.
“Access to high-speed Internet is not a luxury; it is essential, and all Canadians should have access to it regardless of where they live,” said the Honourable Navdeep Bains, Minister of Innovation, Science and Economic Development. “Rural and remote areas need this service to do business, upgrade their education and build stronger communities. Today’s announcements will provide us with a glimpse of what future connectivity of rural and remote communities will look like. It will also ensure that innovative Canadian companies, like Telesat and its partners, remain world leaders, creating highly skilled jobs in Canada.”
With Canada’s commitment expected to generate nearly $1 billion in Telesat revenue over ten years, Telesat believes it will be able to finance the build of a 298 satellite constellation through a combination of equity, debt, and cash flow. Canada has 2.3 million households that do not have access to affordable and reliable high-speed Internet. The government has set a gold of providing service speeds of at least 50 Mbps downstream and 10 Mbps upstream for all Canadians.
In addition, Telesat is pushing whomever it selects to build its satellites to setup a factory on Canadian soil, providing further direct and indirect economic benefits for the country. In combination with Telesat commitments promote STEM jobs and education in Canada, the company has a significant anchor customer in the Canadian government.
While Telesat is the “home team” with its headquarters in Ottawa, OneWeb and SpaceX’s Starlink are likely to be undeterred in trying to sign up Canadian business customers prior to Telesat rolling out global services in 2022. Starlink’s is expected to deliver service initially to Canada and the Northern U.S. after six launches, with anywhere from two to six launches occurring by the end of this year – a two year head start. OneWeb will start launching on a monthly basis by the end of the year, with over 30 satellites going up per mission and global service expected to be available by 2021.