Canada’s Telesat has announced a groundbreaking collaboration with SpaceX that will see the launch of its Lightspeed low-Earth-orbit (LEO) satellites starting in 2026. The ambitious venture aims to deliver worldwide broadband service from space by the end of 2027, utilising LEO satellites that operate significantly closer to Earth than traditional satellites, resulting in faster and more reliable broadband connectivity.

The LEO satellite constellation, known as Lightspeed, represents a major technological leap in global connectivity. Telesat’s CEO, Dan Goldberg, expressed his excitement about this partnership, stating, “It is another big step forward on our path to get Lightspeed up there.”

The decision to collaborate with SpaceX, founded by tech visionary Elon Musk, was based on several key factors, including SpaceX’s reputation for offering the “best combination of price, performance, reliability, and schedule tempo,” according to Goldberg.

Under the agreement, SpaceX will undertake 14 launches, with each Falcon 9 rocket carrying as many as 18 satellites into orbit. This collaboration accelerates Telesat’s deployment timeline for Lightspeed, with the goal of providing global broadband coverage three years ahead of the initial schedule.

While this partnership represents a significant milestone for Telesat, it has also prompted market fluctuations. Telesat’s shares experienced initial gains of up to 3.2% in early trading but later dipped by 5.3% to C$21.99 ($16.20) as investors assessed the potential impact of this ambitious venture.

Telesat’s strategy to award the satellite manufacturing contract to Canada’s MDA Ltd was announced last month and is expected to result in cost savings of approximately $2 billion. This decision followed challenges faced by the initial contractor, Thales Alenia Space, which cited various factors, including the impact of COVID-19, disruptions in the supply chain, and inflation.

The agreement with SpaceX, encompassing 14 launches, provides Telesat with the flexibility to expand its satellite constellation beyond the committed 198 satellites, allowing for future scalability and growth.

Telesat is entering the competitive landscape of LEO networks with a focus on serving enterprise customers, including mobile operators, government entities, aircraft, and shipping companies. In contrast, many competitors in the LEO network space, such as SpaceX’s Starlink constellation and Jeff Bezos’s Project Kuiper, primarily target the consumer market.

The surging demand for satellite constellations has led to substantial orders for launch services. Major players like Amazon, for instance, secured one of the largest commercial launch deals in history in 2022, involving 83 missions across multiple launch providers. Meanwhile, SpaceX is ramping up its launch capabilities for its Starlink constellation to meet the soaring demand for global internet connectivity.