Telesat signs deal with Calian, expects more to come as it moves toward network launch

Telesat Corp. expects to announce more partnerships in the coming months, as it signs a deal for what it describes as a critical part of its yet-to-launch satellite network. Telesat announced this week that it will work with Ottawa-based Calian Group Ltd. for the deployment of Calian’s “Element Management System” for the Telesat Lightspeed Low Earth Orbit (LEO) satellite network. Telesat’s vice president of lightspeed system development Aneesh Dalvi told The Wire Report in an interview that the company continues to work toward a mid-2026 launch. “There's a lot of development and integration and testing that has to happen prior to that launch, so 2025 especially will be a very busy year for us as all the pieces start to fall into place,” Dalvi said. Calian, which describes itself as working in advanced technologies, health, learning and information technology, and cyber solutions, has a management system that will be “instrumental” in connecting and maintaining certain aspects of Telesat’s Lightspeed network, the company said, by identifying and addressing issues that arise. Telesat said it will be able to manage the configuration and capabilities of its Lightspeed landing stations, user terminals, and satellite onboard processors as needed. The company said it would additionally use the management system to share satellite network data with its operations support systems and network operations centres “to gain full visibility into the state of the entire constellation.” Dalvi further explained that there are essentially four components that will be managed by Calian’s system, including software on the satellites Telesat is developing, which needs to be managed and controlled. The element management system will handle that software as well as software for user terminals on the ground, landing stations, and networking equipment. Using the system, Telesat should also be able to perform software upgrades and gather statistics, “so we’ll be able to monitor exactly what is the performance of each one of those systems,” Dalvi said, offering as an example the measuring of how much information is being passed from satellites to the ground and back. Through a combination of the company’s equity contributions, vendor financing, and funding from Canadian federal and provincial governments, Telesat Lightspeed has been fully funded for its first 156 satellites, which its CEO Dan Goldberg stated last summer will give it global coverage. Global service is scheduled for late 2027. Once it gets up and running, cash flows from the service will fund the remaining 42 satellites to be added to the constellation. The Calian deal will also see that Ottawa firm, which specializes in providing tech solutions to the space, defence, and terrestrial sectors, supply Telesat with lifecycle maintenance and support for the system. Dalvi said Calian participated in an initial request for proposals a couple of years ago -- which was ultimately postponed due to delays with the overall project -- with a pitch Telesat found interesting. Calian has submitted once again to Telesat’s second round of proposals with an improved plan, changes Dalvi said Calian took the initiative to make themselves. The element management system is one that is available as a standalone Calian product, Dalvi noted, being tailored to Telesat for its specific uses. “We were really impressed with all the work that they had done, and the quality of their system, and how close it was to our needs,” said Dalvi, who would not disclose the monetary value of the agreement. Dalvi noted Telesat has early versions of Calian’s system in its labs and has been working on development and integration with it. “We are excited to support the Telesat Lightspeed LEO network with essential software and services for this cutting-edge satellite constellation,” Calian’s president of advanced technologies Valérie Travain-Milone said in a press release. This week’s announcement is one of several announcements Telesat expects to make in the coming months. In August, company CEO Goldberg told an analysts’ call following its second-quarter report that it is in negotiations for its Telesat Lightspeed service with the governments of Canada and of Quebec. A Telesat spokesperson told The Wire Report Monday those deals are still expected to be finalized by the end of summer. Dalvi said Telesat’s commercial team is developing a backlog of customers, and expects early field trials will be done with select customers in Canada. “But at the start of commercial service, we will have customers all over the world,” Dalvi added. Telesat’s plan is to sell access to internet service providers (ISPs) who would in turn make deals with their own customers. Dalvi said in some regions, Telsat might deal with residential customers directly, but most deals throughout the world will be made with businesses. Last November, Telesat entered into a 10-plus-year agreement with Aalyria Technologies, Inc., a U.S.-based networking and laser communications company. That announcement was preceded by a deal with Space Exploration Technologies Corp. (SpaceX) for multiple launches of satellites into low earth orbit. Telesat’s consolidated revenue was $152 million in the second quarter of this year, down $27 million or 15 per cent from the same quarter last year, as reported in August. Net income was $129 million, plummeting from $519 million in Q2 2023. This was attributed to recognition of C-band clearing income last year and a loss associated with foreign exchange rates. Operating expenses were $56 million, a jump of $5 million. The company says it has a contractual backlog of roughly $1.1 billion for future services. It reported a cash balance of $1.4 billion. In the first two quarters of this fiscal year, Telesat has repurchased US$262 million of debt for an aggregate price of US$119.5 million. Earlier this year, it was announced the federal government would give Telesat $2.14 billion for the development of its network. According to a press release at the time, Telesat is expected to pay back the loan plus interest over a 15-year period, followed by a 10-year sculpted amortization. The government of Canada will receive 10 per cent of the common shares of Telesat LEO based on a $3 billion equity valuation. The loan follows a $1.44 billion investment from the federal government, as well as a $109 million deal with the government of Ontario, back in 2021. - Reporting by Hannah Daley at hdaley@thewirereport.ca with files from The Wire Report’s archives.

Telesat signs deal with Calian, expects more to come as it moves toward network launch

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By Hannah Daley
| September 11, 2024

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