Shares of Canadian telecommunications satellite operator overflowed as it exchanges suppliers for its deliberate Lightspeed international internet network

August 15, 2023: On Friday, Shares of Canadian telecommunications satellite operator overflowed as it reported to exchange suppliers for its deliberate Lightspeed international internet network.

Telesat announced that Canadian space firm MDA will now make the Lightspeed satellites, returning French-Italian manufacturer Thales Alenia Space and resulting in “total capital cost savings” of almost $2 billion.

The company anticipated to establish the foremost Lightspeed satellites in mid-2026, with global service starting once the first 156 satellites are in orbit. The entire network is scheduled to consist of 198 satellites.

The Telesat stock surged as considerably as 64% with heavy volume in early trading from its previous close at $8.45 a share before slipping slightly to closer to 50%.

“I’m incredibly proud of the Telesat team for their innovative work to optimize further, resulting in dramatically lowered costs,” Telesat CEO Dan Goldberg stated in a release.

On Friday, Telesat stock surged after the company swapped its internet satellite supplier.

The company had contracted Thales Alenia Space to manufacture the satellites at an estimated cost of $5 billion to make the network – including about $3 billion for the satellites, plus the costs of rocket launches, making ground infrastructure, and developing software platforms to operate the network.

Goldberg emphasized that Lightspeed is intended to compete in something different than direct-to-consumer needs against SpaceX’s Starlink or Amazon’s Kuiper. Instead, it will maintain Telesat’s existing focus on enterprise customers, government, and commercial markets that Starlink has expanded into in the past year.

Telesat also reported second-quarter results on Friday, including $180 million in revenue, a decrease of 4% from the same period a year prior.

Telesat’s net income increased to $520 million in the quarter, compared to a net loss of $4 million a year prior, a dramatic shift the company attributed primarily to a $260 million payment from the FCC for clearing range for 5G use in the U.S.

The company reaffirmed its complete-year 2023 revenue guidance, expecting to bring in between $690 million and $710 million.