Specialist
Former General Manager at Telesat Corp
Agenda
- Telesat’s (NASDAQ: TSAT) operating environment, noting ongoing Lightspeed delays and impact on company growth
- Competitive threats from Starlink and other LEO (low Earth orbit) players
- Legacy offerings and revenue mix going forwards
- Outlook for 2023 and beyond, highlighting Telesat’s potential as an acquisition target
Questions
1.
Could you give an overview of Telesat’s operating environment today and pull out 2-3 key trends or drivers that you see impacting the business?
2.
Could you discuss the evolution of Telesat’s Lightspeed project and where you see it today?
3.
You commented that there might be some challenges for Lightspeed in the customer ecosystem and this need for global coverage for a number of global customers. Could you elaborate on this? Is this primarily a factor of the ongoing delays being further argument to explore some other global providers? Or are there also some other factors that are impacting the potential success for Telesat once it does get Lightspeed up and running?
4.
You mentioned that you view Lightspeed as a best-in-class technological solution, but also highlighted other players, such as Kuiper or OneWeb potentially, with the ongoing delays for Lightspeed having the time to release newer hardware and potentially bridge that gap. How differentiated is Lightspeed from a technological standpoint? What are some of the key metrics or factors that show how differentiated it really is from those other players?
5.
You mentioned capacity, and one of the things that Telesat has highlighted is in reducing the fleet from the initial 298 satellites that are planned to 188, it also came along with a capacity reduction to 10TB from 15TB. How significant is this? Might this drop impact its ability to eventually serve those end customers and provide this quality of service, which could seem like a drop in the bucket in comparison to a player such as Starlink? Starlink has so many satellites out there from a relative standpoint, and such a high degree of capacity. How significant do you see that reduction? What will that ultimately look like in terms of the service and solutions that Telesat is able to provide?
6.
What demand dynamics are we seeing at play today, and could you discuss some of Telesat’s revenue drivers? You highlighted a number of headwinds, and we’ve discussed the delays from Lightspeed.
7.
You highlighted that Telesat, considering the investment that it has in Lightspeed, is not announcing plans to have any sort of technological developments on the GEO [geostationary Earth orbit] side of things, and if you look at recent revenue trends, the company has been seeing a slowdown there with revenue dropping in Q3 2022 both QoQ as well as YoY. Considering the timeline of the Lightspeed project, do you think that it would make more sense to have some more investment on the GEO side, given by 2026-27 there will be other competitors who are also able to deliver earlier or had already been there for some of these offerings?
8.
You mentioned customers don’t perceive Telesat as much of a global player, and you highlighted the potential focus in North America. Is there a large difference between customer perception and what Telesat is currently able to deliver on? What does the company’s global footprint actually look like today, and how might that actually compare to that of players – such as SES, who is Europe-based – if it is really more a perception question vs actually the solutions and offerings that Telesat is able to provide?
9.
You mentioned this idea of industry consolidation, which certainly has been a popular topic, and as you mentioned, there are a lot of expectations around this. Do you also share that belief that there will be more industry consolidation? If so, what sorts of things might you look towards as potential activity down the road?
10.
It seems Telesat could benefit from having a stronger balance sheet as it looks to finance projects such as Lightspeed. Do you think that the company could ever be an acquisition target, and why or why not?
11.
You mentioned this idea of potentially seeing some merger activity in 5-10 years. Is there any particular player that you think would be a logical suitor to acquire Telesat? Is there any other company out there that would be most complementary to the company?
12.
We’ve touched on a couple of different players, and you’ve highlighted the fact that, in terms of the total market opportunity, there certainly is a lot up for grabs in the next few years as the opportunity continues to grow, particularly globally. Looking at the variety of players out there, all of the LEO [low Earth orbit] operators and the legacy GEO companies, who is best-positioned to scoop up some of that market share and capitalise on this opportunity, going forwards?
13.
How would you describe Telesat’s CEO Dan Goldberg’s management approach and style, and the direction that he’s taking the company in?
