Telesat CEO Dan Goldberg stands in the company's Satellite Control Centre in downtown Ottawa, on Sept. 4, 2020.Justin Tang/The Globe and Mail
In 2015, during a flight home from a satellite industry conference in Paris, Dan Goldberg pondered the existential crisis facing the sector and his company, Ottawa-based Telesat .
Streaming giant Netflix Inc. was eating into the global direct-to-home satellite TV business. In Telesat’s other line of business, providing broadband connectivity to various industries and governments, demand was growing, but competitors had flooded the market with too much supply, driving prices down. And customers were complaining the internet service provided by Telesat’s fleet of geostationary satellites, each of which stays in a fixed spot some 36,000 kilometres above an area of Earth, has high latency – an industry term for lag time.
“I was losing a lot of sleep during that period about the future of our industry, the future of Telesat, what our strategic direction was going to be going forward and how we could maintain not only our growth ambitions but, frankly, our relevance in a world where broadband was becoming the pre-eminent demand driver,” said Mr. Goldberg, Telesat’s CEO.
So, with an inflight Caesar in hand, Mr. Goldberg started writing his ideas for the company’s future on both sides of an Air Canada napkin. That brainstorming session kicked off a strategic analysis that resulted in plans for Lightspeed: a constellation of 298 satellites that will orbit just 1,000 kilometres above the Earth, handing off signals to one another and cutting down on the distance that broadband signals need to travel.
However, Telesat is far from the only company in the increasingly crowded race to beam internet to remote areas from low-Earth-orbit satellites. Since Telesat announced its constellation, U.S. tech billionaires Elon Musk and Jeff Bezos have also entered the race, while Britain-based OneWeb has emerged from bankruptcy proceedings with US$1-billion in fresh capital to restart its constellation.
Mr. Musk’s SpaceX has launched hundreds of satellites into orbit and its Starlink constellation is already offering service, giving his company the early mover advantage.
But Mr. Goldberg is undeterred. Telesat has secured $2.6-billion in government funding, including $1.44-billion from Ottawa, and plans to start offering service in Northern Canada by the end of 2023, with full global coverage expected in the second half of 2024.
Last November, Telesat Corp. began trading on the Toronto Stock Exchange and the Nasdaq. Although no new shares were issued as part of going public, the listings will allow the company to tap equity markets in the future as it looks to raise more funds for its $5-billion Lightspeed project.
Telesat’s planned LEO (low-Earth orbit)
satellite constellation
Telesat is building a “constellation” of satellites that orbit the
globe from about 1,000 km above the planet. This would
create a communications network that delivers faster internet
from space than traditional “geostationary” satellites, which
are about 36,000 km above Earth.
THE CONSTELLATION
Telesat’s global constellation will consist of 292 satellites, 72
in polar orbit plus 220 in inclined orbit. The mix of different
orbits is meant to offer global coverage, with the satellites in
polar orbit giving better northern coverage and the
inclined-orbit satellites covering mid-latitude regions.
Polar orbit
Inclined orbit
ORBIT INCLINATIONS
Inclination is the angle between the equator and the satellite
orbit. An inclination of zero degrees is an equatorial orbit. An
inclination of 90 degrees is an orbit directly over the North
and South Poles.
North Pole
Polar
orbit
Inclined
orbit
90°
Orbital
inclination
0°
Equator
South Pole
The internet
MURAT YUKSELIR / THE GLOBE AND MAIL, SOURCE:
NASA; TELESAT; THE ECONOMIST
Telesat’s planned LEO (low-Earth orbit)
satellite constellation
Telesat is building a “constellation” of satellites that orbit the
globe from about 1,000 km above the planet. This would
create a communications network that delivers faster internet
from space than traditional “geostationary” satellites, which
are about 36,000 km above Earth.
THE CONSTELLATION
Telesat’s global constellation will consist of 292 satellites, 72
in polar orbit plus 220 in inclined orbit. The mix of different
orbits is meant to offer global coverage, with the satellites in
polar orbit giving better northern coverage and the
inclined-orbit satellites covering mid-latitude regions.
Polar orbit
Inclined orbit
ORBIT INCLINATIONS
Inclination is the angle between the equator and the satellite
orbit. An inclination of zero degrees is an equatorial orbit. An
inclination of 90 degrees is an orbit directly over the North
and South Poles.
North Pole
Polar
orbit
Inclined
orbit
90°
Orbital
inclination
0°
Equator
South Pole
The internet
MURAT YUKSELIR / THE GLOBE AND MAIL, SOURCE:
NASA; TELESAT; THE ECONOMIST
Telesat’s planned LEO (low-Earth orbit) satellite constellation
Telesat is building a “constellation” of satellites that orbit the globe from about 1,000 km above
the planet. This would create a communications network that delivers faster internet from space
than traditional “geostationary” satellites, which are about 36,000 km above Earth.
THE CONSTELLATION
Telesat’s global constellation will consist of 292 satellites, 72 in polar orbit plus 220 in inclined orbit.
The mix of different orbits is meant to offer global coverage, with the satellites in polar orbit giving
better northern coverage and the inclined-orbit satellites covering mid-latitude regions.
Polar orbit
Inclined orbit
ORBIT INCLINATIONS
Inclination is the angle between the equator and the satellite orbit. An inclination of zero degrees is
an equatorial orbit. An inclination of 90 degrees is an orbit directly over the North and South Poles.
North Pole
Polar
orbit
Inclined
orbit
90°
Orbital
inclination
0°
Equator
South Pole
The internet
MURAT YUKSELIR / THE GLOBE AND MAIL, SOURCE: NASA; TELESAT; THE ECONOMIST
“I’ve always said you need to be timely to market – you don’t need to be first,” Mr. Goldberg said. “We need to move with alacrity and a sense of urgency but not lose our heads and just start launching shit. That would be a real mistake.”
Mr. Goldberg never planned to be a CEO. After graduating from Harvard Law School, he went to work at Covington & Burling LLP, but he “didn’t love” working at a big Washington law firm. After a brief stint as a criminal prosecutor in Boise, Idaho, Mr. Goldberg wound up working for his dad at Goldberg, Godles, Wiener & Wright LLP, a Washington law firm focused on the telecommunications sector.
Mr. Goldberg spent a lot of time representing satellite provider PanAmSat and fell in love with the space sector. He liked the global nature of the industry and found rockets “inherently cool.” After five years at the law firm, he left to work for PanAmSat – “which pissed my dad off,” Mr. Goldberg recalled.
A year later, he persuaded his wife to move to the Netherlands, where he took on a role as general counsel for a satellite startup called New Skies. The company made him chief operating officer, then CEO. Leaving the law was a difficult choice, Mr. Goldberg said: “I never thought of myself as a business person.”
But he enjoyed the experience greatly, and in 2006, Bell Canada CEO Michael Sabia recruited Mr. Goldberg to lead the sale of Telesat, a former Crown corporation founded in 1969 that Bell Canada had acquired. The sale, part of Bell’s plan to focus on its core phone business, exceeded everyone’s expectations, Mr. Goldberg said.
The Public Sector Pension Investment Board (PSP Investments), the federal Crown corporation that manages civil service pensions, and U.S. satellite company Loral Space & Communications Inc. bought Telesat for $3.25-billion. “It was a home run,” Mr. Goldberg said.
His next task was to integrate Loral’s satellite business, Loral Skynet, into Telesat and restructure the company. When Mr. Goldberg took over Telesat, its operating margins were about the lowest in the industry, he said. In 2007, Telesat’s adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) margin – a measure of operating profit as a percentage of revenue – was 58 per cent. By 2015, it had increased to more than 80 per cent. Revenue, meanwhile, grew from $569-million in 2007 to $954-million in 2015. But then it started to stagnate.
The decision to construct a low-Earth-orbit, or LEO, constellation, was not an easy one, Mr. Goldberg said. There are numerous technological challenges to overcome and several satellite companies had gone bankrupt in the process, including Iridium and Globalstar during the 1990s tech boom and subsequent bust.
“It was a pretty long journey to persuade ourselves that that was the right path,” Mr. Goldberg said. However, “once you decide that low latency is essential, then you’re stuck at LEO,” he added.
When Telesat made its LEO plans public, competitors criticized the company to customers and the financial community. “They said we were wrong,” Mr. Goldberg said. So when Mr. Musk’s SpaceX and Mr. Bezos’s Amazon declared LEOs the best strategy for bridging the digital divide, Mr. Goldberg felt validated.
“These guys have pretty good track records in terms of innovating, so that made us feel good, on the one hand. On the other hand, they’re formidable competitors,” Mr. Goldberg said.
Executing on Telesat’s plans will be no easy feat, Mr. Goldberg said, but he believes the company has some advantages over its rivals. For one thing, it’s targeting a different segment of the market. Rather than focusing on consumers directly, as SpaceX is, Telesat’s constellation is designed to serve enterprise customers such as governments, telecoms, and the airline and maritime industries.
“It’s fewer customers, but customers whose requirements are larger. They demand enterprise-grade connectivity. We think we’re building the right consolation for that market,” Mr. Goldberg said. Internet service providers will view Telesat as a partner, rather than a competitor, he added.
Telesat already has relationships with enterprise customers, which it currently serves through its fleet of geostationary satellites. And its planned LEO constellation is much smaller, and therefore cheaper to build, than those of its competitors. (Amazon’s Project Kuiper has regulatory approval for 3,236 satellites, while SpaceX plans to launch as many as 42,000.) “We’re investing less capital and still delivering terabits and terabits of capacity,” Mr. Goldberg said.
There’s a lot of work to be done, however, and many hurdles to overcome. “None of it will go perfectly. It never does,” Mr. Goldberg said.
But, he added, “we’re good at stuff like this. We’re very thorough, we’re very rigorous. We’re working with world-class suppliers ... it’s fun, particularly for me, having been at Telesat for a long time, to have a project like this that’s so transformative, that promises to be so disruptive. It’s an exciting thing to be a part of.”
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