- Telesat’s new LEO business is called Telesat Lightspeed
- It will provide wholesale LEO capacity to enterprises and government clients
- The company sees the writing on the wall, that enterprises are going to demand low-latency LEO satellite services to replace GEO services
While Starlink and Amazon Leo capture all the headlines related to low-Earth orbit satellite, another company is making moves in the LEO space.
Canada-based Telesat, a longtime geosynchronous (GEO) satellite operator, is preparing to launch its own LEO constellation because it anticipates that its enterprise customers are going to demand the benefits of LEO. It’s time for GEO operators to get into LEO or risk their own survival.
Fierce Network spoke with Manik Vinnakota, VP of Products and Customer Solutions for Telesat’s new LEO business, which is called Telesat Lightspeed. He said, “We are actually the only experienced GEO satellite operator who's also doing our own LEO.”
Although it should be noted that Eutelsat bought the OneWeb LEO constellation. And CCS Research Analyst Joe Gardiner said, “You could also argue that SES/Intelsat will have a LEO constellation, though in an indirect way, through its investment in Lynk.”
STL Partners Analyst Krsna Singh said the main point is that Telesat is the only experienced GEO operator building its own LEO constellation from scratch, rather than entering LEO through an acquisition or investment.
Telesat plans to launch 150 LEO satellites by December 2027 to provide global wholesale LEO services. And it will add more satellites over time to increase capacity.
“We have a few test satellites that we've launched, and we've done customer demos and so forth,” said Vinnakota. “But true operational service is end of 2027.”
Telesat’s pedigree
Telesat is among a small group of GEO players who’ve been around for decades, including SES/Intelsat, Eutelsat, Viasat and EchoStar. The company has 14 GEO satellites currently operational. Although Telesat is headquartered in Canada, it has operations in 120 countries. It’s a public company with revenues around $500 million per year.
Similar to the other big GEO operators, Telesat got its start providing wholesale satellite TV capacity. Its other bread-and-butter business is providing wholesale satellite data services to telcos and also to enterprises that serve industries such as airlines and cruise ships.
Plans for Telesat Lightspeed
For its new LEO service, Vinnakota said, “We are 100% focused on the enterprise and government market. We are not doing direct-to-home broadband like Starlink. We are always a wholesaler. So, we would provide wholesale capacity to telcos and to service providers who will, in turn, serve the enterprises and government market.”
Although Telesat already provides GEO services to many of these same customers, LEO will provide technical benefits, such as lower latency.
In addition, the user terminals (UTs) for LEO services are much smaller than the UTs for GEO. This is because LEO satellites are so much closer to the Earth. Vinnakota said the UTs for GEO services are sometimes so big that they require a crane to lift them into place. “It's very complex operationally,” he said. “Whereas with LEO, it's the size of a big laptop. Also it’s cheaper than a GEO service. So because of all these reasons, customers want to move away from traditional GEO data to LEO data.”
From Telesat’s perspective, the demand for LEO services with the lower cost and much smaller UTs will expand its addressable market.
Vinnakota said the European telco Orange has already signed a contract to receive Telesat Lightspeed services when it’s available two years from now.
LEO is a high-capex game
There’s been a lot of consolidation in the GEO ecosystem, and part of that has been driven by the competition coming from LEO.
But Vinnakota said, “LEO is a high-capex game. You need to have $5-$10 billion to launch a global LEO.” He speculated that SES’s acquisition of Intelsat was driven by the need for a bigger balance sheet to compete.
“We saw the writing a bit early,” he said. “GEO is not going to continue forever, so let's cannibalize ourselves by doing what customers need, rather than us being cut out of the market by someone with LEO. There will be four or five large LEO networks in the world, and that is a big enough market for four or five players to make decent returns.”
Analyst Gardiner said, “You can look at the investment in Eutelsat OneWeb by the French and U.K. governments to show there is significant government interest in LEO satellite services, particularly in Europe, as the continent is attempting to improve its satellite sovereignty.”
Governments may also be interested in LEO as a backup to undersea cables. CCS predicts that by 2027, EU member states will mandate satellite backup for critical national infrastructure.
“This backup will be for critical infrastructure such as the energy grid and public safety systems,” said Gardiner. “Private companies could take their cue from the government and build satellite communications into business continuity plans.”