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Summary
- Reports about Telesat Inc going public has been around since November last year, but its stocks are yet to hit the equity market.
- Investors are showing interest in the Canadian satellite communications enterprise right now, especially with multiple media reports pitting it against Elon Musk and Jeff Bezos’ companies.
- Telesat is currently in the race with Musk’s SpaceX and Bezos’ Project Kuiper to launch a low-earth-orbit (LEO) satellite constellation which will offer high-speed broadband connection from space.
Reports about Telesat Inc going public has been around since November last year, but its stocks are yet to hit the equity market. Nonetheless, investors are showing interest in the Canadian satellite communications enterprise right now, especially with multiple media reports pitting it against Elon Musk and Jeff Bezos’ companies.
The Race For Space High-Speed Internet
Telesat is currently in the race with Musk’s SpaceX and Bezos’ Project Kuiper to launch a low-earth-orbit (LEO) satellite constellation which will offer high-speed broadband connection from space.
Engineer-turned-entrepreneur Elon Musk has been working on SpaceX’s LEO project, Starlink, since 2015 and is currently in beta test stage in the US. Bezo’s Amazon Inc, on the other hand, announced its plans for a broadband satellite internet constellation named Project Kuiper back in 2019.
Source: Pixabay
Where Does Telesat Stand in the LEO Constellation Race?
Telesat’s LEO constellation, also known as Lightspeed, is the fruit of a few pointers that CEO Dan Goldberg has jotted down on a napkin during an Air Canada flight in 2015. From there, the Canadian satellite tech firm has come close enough to plan the first launch for early 2023.
In comparison, however, Starlink has some 1,200 satellites up in the orbit already.
But Telesat does not seem that worried about the stiff competition, especially with CEO Goldberg describing its LEO constellation as “the Holy Grail” for shareholders.
Reports point that Telesat’s LEO constellation is set to be less expensive as compared to those of SpaceX and Amazon’s.
Another factor that could work in Telesat’s favor is that the Canadian company, founded in 1969, has decades of experience under its belt in terms of satellite services, especially compared to SpaceX and Amazon.
Additionally, while the two US-based businesses are largely driven by the consumer market, Telesat is more focused on business clients with deep pockets. Back in February, the Quebec government poured an investment of C$ 400 million into Telesat’s Lightspeed satellite program.
When Is Telesat’s IPO Due?
Canada has already beaten many competitions in the space tech IPO race with Canadarm maker MDA Inc going public earlier in April. Telesat too is expected to hit the stock markets sometime this year.
©Kalkine Group 2020
Telesat had publicly announced in November 2020 that it plans go public via a business combination with co-owner Loral Space & Communications (NASDAQ:LORL). If and when that happens, the new public entity will function under that brand name of Telesat Corporation, while Telesat Canada and Loral Space operates under it as subsidiaries.
Telesat’s plan is to launch its stocks on the Nasdaq exchange in 2021, and eventually head for an IPO for a Canadian stock market listing.
With Telesat’s LEO constellation expected to be less expensive than that of its competitions, something that CEO Goldberg called a “sustainable competitive advantage", Telesat’s IPO issue price could also be at par with their prices.
Mr Goldberg also reportedly said that Canadians and French export credit agencies EDC and BPI are likely to be Telesat’s main investors, while the Canadian government too has promised a C$ 600 million investment to become a customer.
