Federal Government Invests $1.44 Billion in Telesat Satellite Internet

The federal government has announced an additional CA$1.44 billion for Telesat, a Crown-owned Canadian satellite communications company, to build its Lightspeed Low-Earth-Orbit (LEO) satellite group.

Under the agreement announced on Thursday, the government will provide $790 million in loans to Telesat and buy CA $650 million in preferred shares, through which the government will receive dividends. The government will also receive warrants that can be converted into equity shares of Telesat.

A government spokesperson said during a press briefing call regarding the announcement, "As part of the [investment], the company (Telesat) needs to achieve a range of capital and operating expenditure limits as part of that commitment." Will be." "There are both significant domestic capital expenditures for this project to look at the development of first generation satellites as well as second generation satellites, as well as domestic employment targets and things like that."

This new funding is in addition to the CA$600 million reserved in the Universal Broadband Fund (UBF), which will be distributed over the next 10 years to secure capacity from Telesat for regional providers at a lower cost.

Telesat's Lightspeed constellation will consist of 298 Low Earth Orbit (LEO) satellites that promise to bring gigabit speeds anywhere in the world with 30 to 50 millisecond latency. The network will operate on global priority Ka-band spectrum and has a capacity of 15 terabits per second.

In Canada, the satellite group will connect the most isolated regions of the country. Internet and cellular services enabled via Telesat will begin service in 2025 and connect 40,000 households in disadvantaged communities, an important step toward achieving the government's goal of providing high-speed Internet to all Canadians by 2030 .

Telsat is expected to invest CA$3.6 billion in capital expenditures in Canada, provide up to 700 jobs, and offer $800,000 in scholarships with a focus on women in STEM programs.

As Telesat ramps up its operations in Canada, SpaceX's Starlink is already making its way into Canadian homes with limited availability. Earlier this year, Starlink began its testing phase in Canada, allowing eligible Canadian customers to sign up for its satellite Internet subscription.

Unlike Starlink, which sells its service directly to consumers, Telesat will sell to regional ISPs, who in turn will sell to their customers.

Telesat has also received funding from provincial governments. On August 11, Ontario signed its own CA$109 million deal with Telesat to specifically secure capacity for rural and indigenous communities in the province over the next five years. In February, the Quebec government also announced a $200 million loan to Telesat and another CA$200 million investment in the company.