Telesat ‘bullish’ on government contracts as NATO allies consider increasing defence spending

As governments across the world consider spending more money on defence, putting a renewed focus on reaching their NATO spending targets, Telesat Corp. CEO Dan Goldberg says the company is looking to make the most of the moment. U.S. President Donald Trump has called for NATO members to increase their spending on defence from two per cent of GDP to five per cent, an amount which no member has met. While NATO officials have not endorsed the lofty goal, many have agreed that defence spending needs to rise, according to reporting from Reuters. Canada did not hit the two per cent target last year. As member countries consider how to meet their targets, Goldberg told analysts during the company’s first-quarter call Tuesday that Telesat knows “that space is kind of front of mind for so many of these allies.” “We think that there could be some very meaningful opportunities for Lightspeed in the government services market, but being specific around timing of those, the quantum of those, is always a bit hard,” Goldberg said of Telesat’s Lightspeed low-Earth orbit (LEO) satellite network, on Tuesday. “But for the avoidance of doubt, we’re very bullish on our opportunities there and think that is going to be a meaningful part of the Lightspeed business, including pre-launch business. So anyway, stay tuned,” the CEO said. Goldberg repeated during the call that Telesat expects to see its network launch in 2026. Telesat’s LEO backlog stands at nearly $1.1 billion as of May 5, it reported. Its backlog represents its expected future cash inflows from capacity allocation or service delivery contracts, it said. When asked on Tuesday for specifics about a potential Telesat deal with Taiwan, Goldberg was not specific in his answer. The Globe and Mail reported in the fall that Telesat was pitching Taiwan on LEO service and that Taiwan would be interested. Goldberg said only that Lightspeed has been "specifically architected to meet a lot of the requirements — pretty rigorous requirements — that governments have in terms of constellation capabilities, cyber standards, other standards that government users have in terms of resiliency and some other features that are important to government...” “All I would say is we’ve had multiple conversations with various governments around the world as governments, more and more, think about leveraging LEO to meet their growing space requirements…As we have deals to announce we’ll announce them,” he said. “Government procurement, even with your own domestic government let alone foreign governments, it’s always a process that is opaque with lots of moving parts and variables, so it’s always a bit of a mug’s game to make too many specific predictions around how those things play out,” he added. A potential deal that has been announced is one with the Norwegian government’s satellite operator Space Norway. The plan is for Space Norway to integrate a multi-gigabits per second (Gbps) Lightspeed capacity pool to offer low-latency connectivity for its defence, enterprise, maritime, and land customers. The two sides intend to come to a final agreement on the deal by the second half of this year. Telesat announced in March it is building a new campus in Gatineau that is expected to open by the end of 2025. That project is backed, in part, by a $2.14-billion loan from the federal government, as well as loans from the governments of Quebec and Ontario. It has also gone through a spate of hires to its American subsidiary Telesat Government Solutions, including bringing on a new vice president of growth, a director of U.S. government programs, and the appointment of president Charles “Chuck” Cynamon. Revenue, profit down in Q1 Telesat reported a 23 per cent drop in revenue to almost $117 million from approximately $152 million in the first quarter of 2024. Chief financial officer Andrew Browne said the revenue decrease was due to a lower rate on the renewal of a long-term agreement with a North American direct-to-home customer. Browne said other factors included reductions in services for certain enterprise customers, particularly related to an agreement for services to an Indonesian rural broadband program combined with lower equipment sales to Canadian government customers. The company’s operating income came in at just under $31 million, down approximately 53 per cent from nearly $66 million in the same period last year. Overall, Telesat reported a net loss of $51 million — slightly better than the loss of $52 million it saw in Q1 2024. Operating expenses hit $53 million, up 13 per cent or $6 million from the same period in 2024. The jump was credited to growth in Telesat’s Lightspeed staff and higher legal and professional fees, offset some by higher capitalized engineering, lower costs for its LEO consulting revenue, and lower share-based compensation. Its adjusted EBITDA (earnings before interest, taxes, amortization, and depreciation) was $67 million, down 39 per cent or $43 million from Q1 2024. During its previous quarterly call in March, Telesat announced Browne’s retirement after five years with the company and more than 40 years in the computer chip and satellite communications industries. Goldberg said Telesat was to begin searching for his replacement. His last day of work was not specified. hdaley@thewirereport.ca

Telesat ‘bullish’ on government contracts as NATO allies consider increasing defence spending

Telecom |
By Hannah Daley
| May 6, 2025

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us

Telesat ‘bullish’ on government contracts as NATO allies consider increasing defence spending

Telecom | By Hannah Daley | May 6, 2025

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Related Stories

Telus reports solid Q1, jump in profit

Quebecor’s Péladeau wants CBC out of advertising market

Bell creates U.S. fibre firm, cuts dividend in first quarter report

Rogers urges next federal government to ‘encourage’ investment in Canada; eying potential for third-party investment in sports assets

Reuse & Permissions

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us

Telecom |
By Hannah Daley
| May 6, 2025