Telesat Cuts Lightspeed Spending to $1.1–$1.3 Billion and Delays Global Service
Key Facts
Telesat cut its estimate for total spending on the Lightspeed program during 2026 to a range of $1.1 billion to $1.3 billion, from $1.3 billion to $1.5 billion previously, according to its third-quarter results statement filed with the U.S. Securities and Exchange Commission. The new estimate includes operating expenses and capitalized amounts, so it is not limited to capital expenditures, as the initial wording of the report stated. The company attributed the change to the expected timing of satellite payments and launch operations. The lower spending outlook coincided with a revision to the target date for global service from the constellation, delaying the date on which the company aims to begin offering services worldwide. Chief Executive Dan Goldberg said the company had made strong progress on its strategic objectives, noting that Lightspeed is fully funded and that service to higher-latitude areas is targeted for near the end of the first quarter of 2028.
Goldberg said on the earnings call that Telesat now aims to begin global service near the end of the second quarter of 2028, after previously targeting the end of the first quarter of the same year. The revision delays the global target by about one quarter. By contrast, the company did not change its target for the start of commercial service in higher-latitude areas, which remains near the end of the first quarter of 2028. That puts the launch of service in northern areas ahead of global coverage under the announced schedule. The distinction frames the schedule change as a delay to global service, while the earlier target for service in higher latitudes remains in place.
Telesat spent about $368 million on Lightspeed in the third quarter of 2026, including $344 million in capital expenditures and $24 million in operating expenses, according to the company’s statement. In the first nine months of the year, investment in the program reached $705 million, comprising $641 million in capital expenditures and $64 million in operating expenses. As of September 30, cumulative investment in the program was about $3.1 billion. These figures show that the total spending underlying the company’s financial guidance combines capital and operating items, as reflected in the quarterly and nine-month results. Goldberg said, "Telesat Lightspeed is fully funded," citing the project’s financing as the company continues to develop the network.
The project’s background includes a Canadian government contract for defense and Arctic communications, which Telesat said in August would allow it to expand the constellation from 156 to 225 satellites. The company said at the time that the expansion would raise total expected investment in the 225-satellite network to about $7 billion, after $2.7 billion had been invested as of the agreement announcement. The contract includes secure communications for the Canadian Armed Forces in the area between 65 and 90 degrees north latitude. Telesat also disclosed that it received $509.6 million in milestone payments from the Defence Investment Agency during the third quarter. As of September 30, $1.52 billion in Lightspeed financing remained available to draw, while milestone-related payments under the contract totaled $2.0 billion and are expected to be received between the third quarter of 2026 and the fourth quarter of 2028.
Backlog provides an indication of the volume of business recorded by the company: its low Earth orbit segment had a backlog of $5.6 billion as of September 30, 2026, compared with $779 million for its geostationary orbit segment. Goldberg said the initial ESCP-P contract marked the start of an attractive set of government and defense opportunities with Canada and allied countries. He said, however, that converting these opportunities into contracted orders remained a focus for the company. In its third-quarter results, Telesat reported consolidated revenue of 81 million Canadian dollars, down 20%, or 20 million dollars, from the same period a year earlier. Adjusted EBITDA fell 74% to $12 million, while GEO segment revenue declined 21% to $79 million. The company attributed the declines to a broadcast contract not being renewed, lower contracted capacity and the decommissioning of some satellites.
The company reported a net loss of $157 million in the third quarter, compared with a loss of $121 million a year earlier. Telesat attributed the wider loss mainly to lower adjusted EBITDA and a larger loss related to the increase in the fair value of Lightspeed financing warrants. The company also faces maturities on its GEO loans and debentures, totaling about $3.1 billion across dates in December 2026 and June and October 2027. It said it was discussing refinancing and acknowledged substantial doubt about its ability to meet GEO obligations as they fall due. TSAT closed at $40.09 on October 30, after closing at $42.52 on October 29. These financial and funding developments provide context for the revised spending outlook and schedule, as the company targets continued service in higher latitudes near the end of the first quarter of 2028 and global service near the end of the second quarter.