Telesat expands satellite constellation to 225 following $2.7B Arctic military contract

Telesat is expanding its low-Earth orbit satellite network after securing a multibillion-dollar contract to supply secure internet to the Canadian Armed Forces in the Arctic, signaling major growth for the Ottawa-based satellite operator.

The company signed a $2.3-billion initial contract that could reach $2.7 billion if the federal government exercises two five-year options, extending the total contract length to 15 years. CEO Dan Goldberg described it as "the biggest space project in Canada's history."

The deal is funding an expansion of Telesat's Lightspeed constellation from 156 to 225 satellites — an addition of 69 dishes. The first satellites from this expansion are expected to be ready for service in the first quarter of 2028. Federal payments will begin later this year to fund the build-out.

Telesat is building and launching the full Lightspeed network. The company was originally awarded the Arctic contract in 2008 but took 18 years to finalize the agreement. Goldberg told analysts he expects defense contracts from other countries to move faster.

"When we first started down the path of Lightspeed, the world was a pretty different place than it is today," Goldberg said on a call with analysts Thursday. "These geopolitical shifts and some of these conflicts that are ongoing around the world have opened up this very significant opportunity for defence and sovereign requirements."

The company is in talks with multiple "sovereign customers" interested in using Lightspeed for defence purposes. Goldberg said he expects to announce additional contracts well before the end of 2027. Telesat believes the expanded capacity will serve both military and commercial customers seeking faster and more reliable internet in remote regions and hard-to-reach locations like cruise ships.

The source did not identify which other countries are in discussions with Telesat for defence use of the Lightspeed network.