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Ontario’s government invests in Lightspeed constellation

TAMPA, Fla. — Telesat has struck a deal with Ontario’s government to partly fund its Lightspeed constellation, which will dedicate some of its satellite capacity to improving connectivity in the Canadian province.

The Ottawa, Ontario-headquartered satellite operator said the five-year agreement is worth 109 million Canadian dollars ($87 million), and focuses on extending high-speed internet and cellular networks to unserved and underserved communities.

Lightspeed, the low Earth orbit broadband constellation that Telesat aims to bring into service in 2023, will offer internet service providers and cellular operators substantially reduced rates for part of its capacity under the plan.

Telesat has a similar arrangement with Canada’s federal government, worth 600 million Canadian dollars, to subsidize broadband services in rural communities.

As part of the deal announced Aug. 6, Telesat will increase its Ontario-based staff by around 35% to about 400 highly skilled jobs.

The company also committed to investing 20 million Canadian dollars to build out facilities in the province, including a new gateway landing station and an expanded corporate headquarters.

“This partnership with the Government of Ontario will not only achieve the province’s goal of connecting everyone, regardless of where they live, to affordable high-speed Internet, but also positions Ontario at the forefront of the highly strategic New Space Economy through Telesat’s local investments in jobs and technology innovations,” Telesat CEO Dan Goldberg said in a statement.

COVID-19 has highlighted how important high-speed internet and reliable cellular services have become for society, added Kinga Surma, Canada’s minister of infrastructure.

Telesat expects to finalize the transaction in the coming weeks.

In February, Quebec’s provincial government said it will invest 400 million Canadian dollars in Lightspeed, and Canadian space hardware maker MDA, to build the network’s phased array antennas.

Telesat later raised $500 million in debt in April to help fund Lightspeed’s $5 billion cost.

However, plans to hold an auction of its C-band spectrum to raise more funds for the constellation were shot down May 21, when the Canadian government said it will run the sale instead.

While satellite operators in the U.S. are due to get billions of dollars from a C-band auction that the Federal Communications Commission managed, it is unclear how much compensation Telesat will get from Canada’s process.

Telesat has plans to list shares on the public markets in the third quarter of this year to support Lightspeed. It has also said it is talking to export credit agencies about raising more debt to back the project.

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