NEWTOWN, Conn. - Satellite deliveries at Telesat are being driven primarily by increasing demand for broadband Internet connections. Satellite provides an ideal platform to deliver these services to rural areas and for mobile applications, such as on trains, airliners, and ships. Demand for satellite direct-to-home (DTH) television services also remains strong, with companies like Shaw Direct and Bell TV using a high amount of capacity on Telesat satellites.

Although the supply of satellite capacity is catching up to demand in Latin America, Telesat continues to purchase new satellites to meet steady demand in North America and to match increasing demand for broadband. With the addition of Telstar 12 VANTAGE, which launched on November 24, 2015, the company now operates 15 satellites. The company also ordered two new satellites from SSL in 2015 that will launch in 2018.

Telesat has also expressed interest in exploring an LEO network of satellites. This would be a surprise move, since satellite operators typically do not operate satellites in both geosynchronous orbit and low Earth orbit. However, operating both could allow Telesat to take advantage of the broad area coverage of GEO satellites and the low connection latency provided by LEO satellites. Telesat's plan is to purchase two satellites to validate technologies. It is still questionable if Telesat will proceed with a full constellation of satellites. If it does, it is not clear how large that network will be.

Telesat's relationship with its primary shareholders has been complicated over the past few years. Telesat has been the subject of divestiture talks by its majority owners, Canada's Public Sector Pension Investment Board and Loral Space & Communications Inc. As such, Telesat has been very conservative in its investments. However, in April 2015 discussions to sell Telesat ended. Loral is now investigating performing an IPO of its Telesat shares. The start of IPO discussions could be one reason why the company is investigating new technologies, like an LEO satellite constellation.

Going forward, Telesat will continue to take delivery of satellites in low but steady numbers to replace existing in-orbit satellites reaching the end of their lifespans, as well as to increase capacity. The one thing to watch carefully is Telesat's investigation into LEO satellites. If the company decides to pursue an LEO network, delivery numbers could rise substantially over current forecasts.

Source: Forecast International
Associated URL: www.forecastinternational.com
Author: B. Ostrove, Analyst