Canadian operator Telesat has announced plans to procure a high throughput satellite after pre-selling capacity to Hughes Network Systems. It comes in the same week that one of its owners, Loral Space & Communications, reiterated its desire to either sell or list Telesat. All eyes are now on fellow shareholder PSP to see if it will agree to an IPO.
Canadian operator Telesat has announced plans to procure a high throughput satellite covering the Americas after pre-selling capacity to Hughes Network Systems.
The US satellite broadband player will be the anchor tenant after signing a 15-year deal for 31 Gbps of Ka-band capacity on the Telstar 19 Vantage (T19V), which is set to be launched in early 2018.
Telesat revealed the news days after its parent Loral Space & Communications (NASDAQ:LORL) filed its Q3 report with the SEC, reiterating its desire to either sell or list Telesat.
Loral holds a 62.8% economic interest and a 32.7% voting interest in Telesat Holdco, which in turn owns Telesat. The rest of the Ottawa-based operator is owned by Canada’s Public Sector Pension Investment Board (PSP). Loral bought Telesat with PSP in 2006 for C$3.25bn (US$2.8bn), and PSP alongside fellow pension fund Ontario Teachers’ Pension Plan (OTPP) had looked to buy out Loral, but failed to agree on price.
Loral called time on the sale process, managed by Morgan Stanley and Credit Suisse, in March, but has continued to examine strategic alternatives.
Loral said that in July it exercised its “rights under the Telesat Holdco shareholders agreement to require Telesat Holdco to conduct an initial public offering”, requesting the company issue “not more than 25 million newly issued shares of Telesat Holdco voting common stock”.
Loral said it was in discussions with PSP to agree on pursuing the listing. If an accord cannot be reached, Loral said it would consider options to enforce its rights. PSP did not reply to a request for comment before the press deadline.
In addition to Telesat, Loral also holds a 56% stake in XTAR – another operator it owns with Hisdesat. It sold off manufacturer Space Systems Loral (SSL) to MDA in 2012.
Hughes targeting LatAm market
Hughes’s Ka-band agreement covers South America. T19V will have remaining available Ka-band capacity over Northern Canada, the Caribbean and the North Atlantic Ocean.
In addition to a Ka-band high throughput payload, T19V – which will be co-located with Telstar 14R – will also have a Ku-band system, providing capacity over Brazil, the Andean region and the North Atlantic Ocean.
Dan Goldberg, Telesat’s CEO, described T19V as a “versatile, state-of-the-art satellite optimised to serve growing markets in the Americas from Telesat’s prime 63 degrees West location”.
Alongside Telstar 14R, Telesat also operates Anik F1, Anik G1, Telstar 12 and, soon, Telstar 12, over Latin America.
The Airbus DS-built Telstar 12V is set to be launched by Japan’s Mitsubishi Heavy Industries later this month. Telesat did not comment on what stage it was at in picking a manufacturer or launch provider for T19V.
Hughes president Pradman Kaul said the T19V agreement would add to its HTS capacity over the Americas, which is set to be significantly improved when Eutelsat 65W goes live next year.
Kaul said the Telesat contract would help Hughes “meet the growing demand for broadband services across areas of South America that are unserved or underserved by terrestrial networks”.
The Germantown, Maryland-based company plans to build on the progress of its consumer services HughesNet, which it said now has more than one million subscribers in North America.
