Lighting the Way: Dan Goldberg on How Telesat Secured the Future of Lightspeed

Telesat CEO Dan Goldberg. Photo: Telesat

Telesat dropped a huge announcement earlier this month as it finally revealed its Lightspeed constellation is full steam ahead. Telesat has funding in place and switched to MDA from Thales Alenia Space to build the Low-Earth Orbit (LEO) constellation.

With a number of constellations in the works with Starlink, OneWeb, and Amazon’s Project Kuiper, competition for business will be intense, and that is not even including competing against non-LEO operators. However, the company has a new spring in its step. In this interview, Telesat CEO Dan Goldberg talks about how actually even though the launch of Lightspeed has been delayed, he believes it works out in the operator’s favor, as Telesat can take advantage of key advances in technology. Goldberg explains why he is more optimistic about Lightspeed than ever.

VIA SATELLITE: Telesat made a major announcement with updates on Telesat Lightspeed that related to funding, partners, and timeline. Did you have any doubts that you would get to this point?

Goldberg: No. In truth, I have always had personal conviction that we would figure it out. It took longer than I anticipated. We had a really good design focused on the enterprise broadband market. We had real conviction around the design, total conviction in the business opportunity, which is massive and fast-growing demand for high-throughput, secure, low-latency broadband connectivity in the enterprise market, which is a market that we know quite well. We have always had strong support from the Canadian federal and provincial governments and our board was always strongly supportive of the opportunity. For me, it was always a question of when.

Obviously, we didn’t anticipate COVID coming. That knocked us back a little bit and we lost two years because of that wrench thrown into our plans. I genuinely believe we have ended up in a better place. I am one of those people that believes that everything works out as it should. This will be another example for me of that. I never doubted that we would get it done.

VIA SATELLITE: Thales first won the contract, yet you switched to MDA. Can you explain your thinking here?

Goldberg: We have to go back a little bit here. In early 2021 we announced that we selected Thales Alenia Space as the prime manufacturer. We have a very high regard for their capabilities, Thales has a great track record for building constellations. MDA was also involved in the contract, but Thales was the prime contractor. MDA was going to be building the direct radiating antennas — the DRAs — and MDA has a great history doing that as well.

When we first designed the constellation, we had considered MDA’s digital beam-forming antenna concept. At that time, our engineers felt that the technology wasn’t ready. It was kind of the holy grail, but it wasn’t ready for prime time. We try to be forward leaning in terms of technology, but not so risk embracing that we are going into no-man’s land in terms of schedule, price, or performance. We didn’t believe the chipsets we needed were ready and the thermal budget for the overall satellite design wasn’t closing. So, we selected MDA’s analog beam-forming antenna. It was still capable, still got done what we needed to do, but it required two pairs of DRAs for each satellite to accomplish the coverage and capacity allocation objectives that we have. We looked at the technology back then and rejected it and moved forward on the analog DRA and the Thales Alenia Space manufacturing path.

Then, COVID hit. Thales informed us just around two years ago that they could no longer meet the schedule and price that they had initially proposed due to supply chain issues and inflation. They had to go back out to their supply chain to re-price everything. We had to re-scope the program to fit into the spending envelope that we had. We lost almost a year during that process. There was a funding gap with the increased program cost, and we had been looking to close that funding gap over the last year or so. During that time, we were also looking at ways to optimize the constellation, and exploring technological advances that had taken place since we first closed on our satellite solution. The objective was to achieve our Lightspeed plans within the funding that we had available so we didn’t have to secure additional capital. Late last year, we revisited the digital beam-former with MDA and this was the game changer.

The digital beam former is just so much more efficient than the analog one that we had been looking at. It can generate roughly three times the number of beams. Instead of having two pairs of antennas on every satellite, we are able to accomplish the same thing, and a little bit more, with just one pair of antennas using the digital beam-former pair. MDA had continued investing in the technology and it was now de-risked from a technical standpoint and the performance and thermal profile was much improved from when we had evaluated it some years earlier. Once we made that switch, the satellites could be a little bit smaller and more affordable. We didn’t have to compromise on effective capacity, performance or schedule, all things that are essential to us.

The cost savings were so dramatic that we no longer needed to raise incremental funding. It came together. It didn’t come together overnight. It took an enormous amount of work with MDA to design the new satellites and work with our funding sources, but it came together.

VIA SATELLITE: It almost feels like it was a perfect storm with Thales not able to price it the way they wanted to originally, and then MDA developing the beam-forming technology. Was it like this?

Goldberg: What was fundamental to the change was the availability of this much more capable and efficient antenna. That was the key that unlocked a much more compelling solution, more compelling from a performance perspective and much more compelling from a cost perspective.

VIA SATELLITE: Given we have entered an era of high inflation and high interest rates, how much more difficult did this make for Telesat to get the funding it needed to proceed?

Goldberg: The inflation part made it a real challenge. That is what happened two years ago. COVID hit. There were real supply chain shortages, and that and other things drove inflation. That is what happened when Thales reached out and said they could no longer meet the schedule and the price proposal that they gave us. It had a significant impact on us at the time.

VIA SATELLITE: When did you make the decision that you were all in on MDA?

Goldberg: The board didn’t approve it until the week before we made the announcement. It was starting to feel like this was a viable path in the March timeframe, and then by the time we got to June, it had moved beyond ‘this feels like this could be viable’ to ‘we see a clear path here.’ Then it was just a question of finalizing everything. We needed to satisfy ourselves that this was the right solution from a technical perspective, schedule perspective, and commercial terms. Then over the past couple of months we had to get our funding sources and board up to speed on the plan.  It was very exciting and energizing and we are really pumped up. We feel like we have landed in a great place. The response from the customer community, from the regulators and government partners has been overwhelmingly positive.

VIA SATELLITE: As a CEO, have you had a dramatic change in terms of working with company and then doing such a big turnaround to work with another one?

Goldberg: The only thing that comes to mind is when Intelsat spun out assets to create New Skies. One of those assets was the KTV satellite that was being built by Matra. We took that satellite program over and it started to have some manufacturing issues, so it became quite delayed. The market had changed quite a bit from the time that Intelsat had conceived the satellite. At one point, my predecessor at New Skies walked into my office and said maybe this doesn’t make sense anymore. We ultimately terminated the KTV program and built a very different satellite, a multi-spot beam satellite called NSS-6 (which SES just removed from service after 20 successful years). That was probably the closest thing in my career to what we did with Telesat Lightspeed, which is to say taking a big step back from a path we were pretty far down and ultimately going in a different direction.

VIA SATELLITE: You are now looking at a 2027 launch with less than 160 satellites — if things go to plan. Can you provide a great global service with such few satellites? Given you had targeted a launch in 2024, why do you believe this delay will really not set you back?

Goldberg: Yes, definitely. We can provide a revolutionary, disruptive, low-latency fully global service. I don’t think the delay will have a huge impact on us. Would we have liked to have come out two years from now, absolutely. But, if we had been coming out two years from now, it would have been with a solution that already feels a little bit legacy to me. And so, on the one hand, we would love to be coming to market in 2024 with a high performing LEO constellation, but that constellation would have been meaningfully more expensive than the constellation that we are going to come out with two years later. Net, I think we are in a much better place. If I could bring this constellation forward and have it out next year, I would do that in a heartbeat, as we do see a huge opportunity. But, I believe when we do come to market in 2027, we will be coming into a very large and fast-growing market with a capability that is going to be extraordinarily well-received in these different verticals that we are focused on. And I am really confident about us being successful with it. But, yeah, of course, I would love to put it in a time machine and come out next year.

VIA SATELLITE: Since we last did a big interview, Eutelsat has acquired OneWeb, Viasat has acquired Inmarsat, SES talked with Intelsat, SpaceX and Amazon continue to make waves. Where does a player like Telesat now fit in?

Goldberg: When we first announced Telesat Lightspeed, there was greater scepticism about whether LEO is the best solution for broadband connectivity. That is really what we are talking about here. I believe the past few years have demonstrated that not only is LEO a viable architecture to meet these broadband needs, but it is the optimal one. I give SpaceX a lot of credit here. They have principally been the company that has demonstrated what I would call the superiority of a LEO architecture for these global broadband networks. I think the question of whether LEO is viable is in fewer peoples’ minds than it was before, at least it should be.

Beyond that there have been some real technology improvements over the past couple of years. Certainly, on the spacecraft and digital beam former. The inter-optical satellite links are much more proven. On the ground, there have been meaningful improvements in the user terminal technology. I always believed that there would be progress in those areas, and they would make LEO constellations just more and more viable and compelling. Those are some things that have happened over the last couple of years that are wind in the sails. We’ve seen that the FCC placed a penalty on high latency solutions in their rural RDOF subsidy. We are seeing a lot of RFPs from mobile network operators and government users for rural broadband program all over the world that give an advantage for a low latency solution in terms of selection criteria. I think the market has decided LEO has some important performance advantages and I feel good about that. We have tied our future to a LEO architecture and the last couple of years have proven that’s the right path.

VIA SATELLITE: Do you expect terrestrial backhaul to still be the biggest market? What other markets excite you for the latter part of the decade?

Goldberg: I think the views we had around the addressable market when we first decided to go down the LEO path fundamentally remain intact. On the terrestrial side, we are seeing LEO solutions embraced and all of our customers are very keen on Telesat Lightspeed and the performance capabilities that it can deliver, the pricing that we can offer, the throughput, the security, and how our layer 2 Ethernet service is plug-and-play for telecom operators.

In terms of other verticals, SpaceX is proving how attractive it is in the maritime market. When we talk to commercial airlines and the companies that serve that market, everyone believes that a LEO solution that is fully global, and particularly one that has OISLs so that, for example, aircraft that are going over the poles remain connected, is incredibly attractive. They need low latency, more throughput, lower price points and full global coverage that is secure and resilient.  But, then you also have government. If you look at Ukraine, sadly, that has been a real-world demonstration of how essential and game-changing LEO distributed, resilient satellite constellations are to modern conflicts. The U.S. government was already making a pivot to LEO but now every government gets it. Those are the verticals we are focused on. It is the terrestrial backhaul capability for mobile network operators and ISPs for rural broadband programs and serving remote users, it’s enterprise users (in the energy segment, banking, etc.) who need secure, low latency, reliable connectivity everywhere, and of course maritime, aero and government users. The last couple of years have just reinforced the large and fast-growing market we’re building Telesat Lightspeed to serve.

VIA SATELLITE: You brought up SpaceX . You are going to have to compete with them, and Amazon How tough is that now for even a well-established player to go up against players with thousands, maybe tens of thousands of satellites?

Goldberg: To state the obvious, these are hugely formidable companies. They are massively well-capitalized. They are very disruptive, and they have proven this across a number of industries. We are not even a little bit complacent on what the competitive landscape looks like. But, equally, we have been in a highly competitive market for decades. The market is huge and it is growing very quickly. I think our focus on enterprise grade connectivity presents a real opportunity for us. We are the only company that has designed our LEO constellation from day one to serve the enterprise and the government market as opposed to the retail consumer market. This is not best-effort connectivity. This is committed information rates with service level agreements. We have been serving enterprise and government users for decades. It is not to say that we are not going to be competing with SpaceX, Amazon, Viasat, SES and others for those customers. But the market is huge.

We are engaging with the customers today. We know that there is a real meaningful market opportunity for what Lightspeed is going to be bringing to the market. That doesn’t mean SpaceX, Viasat, Amazon or SES are going to be unsuccessful, it’s just to say that I have huge amounts of confidence that in this competitive market.

VIA SATELLITE: In 2030, where will Telesat be, how will its GEO and LEO businesses mesh together?

Goldberg: By 2030, the constellation will have been operating for some years. It might well be the case that we have been growing the constellation. We have got a lot of ability to do that. You can densify and grow the constellation pretty organically and so it wouldn’t surprise me if we had done some of that. In the 2030 timeframe, our revenues and EBITDA will be multiple times higher than what they are today. I think we will be competing alongside others, SpaceX, Amazon and OneWeb will be among them. It is a very exciting time. My colleagues and I are very excited about the task and opportunities in front of us.

VIA SATELLITE: You have been the CEO of Telesat for many years. Do you believe getting Telesat Lightspeed up and running and successful would be one of your biggest achievements?

Goldberg: I would never take credit for it. It has been the biggest professional challenge that I have had, and I have being doing this for awhile. Telesat Lightspeed is the largest program undertaken in Telesat’s 54-year history. But Telesat has had several great industry firsts over its long history. This was a big effort for all of us at Telesat to get over the line. I have deep appreciation and respect and a huge amount of awe for the team here at Telesat: the technical people, the commercial folks, our colleagues in finance, legal, regulatory, government relations, etc. The entire team. We had to be resilient, innovative and nimble to get us to what I think is a really dynamite outcome.

The team is so energized. The outreach we are getting from others in the industry to come and join the effort to move this program forward has been hugely energizing and positive. We had a couple of tough years with COVID and had to regroup. But everyone now is so fired up, so pumped up to be in total execute mode and bring our revolutionary constellation to market. It’s an exciting time to be at Telesat.