Telesat secures $2.3 billion Arctic military satcom contract, expanding Telesat Lightspeed network and capacity by 44%

Rhea-AI Summary

Telesat (Nasdaq/TSX: TSAT) signed a $2.3 billion Telesat Lightspeed services contract with Canada’s Defence Investment Agency to provide secure Military Ka-band (Mil-Ka) Arctic connectivity to the Canadian Armed Forces under the Enhanced Satellite Communications Project – Polar program.

The deal includes two five-year option periods of about $200 million each, bringing the potential total to $2.7 billion over 15 years with service starting in 2028. The contract, the largest in Telesat’s history, immediately funds 69 additional satellites, expanding the Telesat Lightspeed constellation from 156 to 225 satellites, increasing network capacity by 44%, and lifting total expected network investment to about $7 billion. The new satellites will be built by MDA Space in Montreal and launched on SpaceX Falcon 9 rockets. Telesat will also act as key subcontractor and overall systems integrator for Mil-Ka, UHF, and X-band networks within the broader ESCP-P program.

Positive

• $2.3 billion core contract value, plus $400 million in options, over 15 years
• Largest contract in Telesat’s history, underpinning long-term revenue visibility through 2028–2043
• Telesat Lightspeed constellation expanded by 69 satellites to 225, a 44% capacity increase
• Total expected network investment rises to about $7 billion, with $2.7 billion invested to date
• Milestone-based government funding begins in Q3 2026, supporting expansion capex
• Secured launches on SpaceX Falcon 9 reduce execution risk for deploying added satellites

Negative

• Total Telesat Lightspeed investment increases to approximately $7 billion, heightening capital intensity
• Service under the ESCP-P Mil-Ka contract will not begin until 2028
• One additional Falcon 9 launch remains subject to completion of a launch services agreement

News Explained

The signed expansion is funded through milestone payments beginning in the third quarter of 2026, while integration and one launch remain separately conditioned.

The signed expansion is funded through milestone-based payments from the Government of Canada starting in Q3 2026, identifying a staged funding mechanism for the added network.

The $2.3 billion services contract covers Mil-Ka connectivity, while user terminals, ground and control infrastructure, training, and support services are to be covered under a separate agreement between the Defence Investment Agency and Telesat.

Although SpaceX launches are described as already secured for the expansion, one additional Falcon 9 remains subject to completion of a launch services agreement.

Market Context

Telesat’s recent record included a 2.59% gain after the July 8 Arctic agreement-in-principle announc...

Analysis

Telesat’s recent record included a 2.59% gain after the July 8 Arctic agreement-in-principle announcement but a -2.01% move after its July 27 spectrum update. The contract adds scale, while refinancing requirements remain a risk.

Key Figures

Base contract value: $2.3 billion Option periods: $200 million each Total contract value: $2.7 billion +5 more

8 metrics

Base contract value $2.3 billion 15-year Telesat Lightspeed services contract

Option periods $200 million each Two five-year option periods

Total contract value $2.7 billion Including two option periods

Service period 15 years Including the option years

Additional satellites 69 satellites Fully funded Telesat Lightspeed expansion

Initial constellation 225 satellites Expanded from 156 satellites

Milestone payments begin Q3 2026 Government of Canada funding

Expected network investment Approximately $7 billion Total expected investment in 225 satellites

Historical Context

5 past events · Latest: Jul 27 (Positive)

Pattern 5 events

Date	Event	Sentiment	24h Move	Catalyst
Jul 27	Spectrum transition plan	Positive	-2.0%	Telesat became eligible for up to US$189 million in FCC incentive payments.
Jul 09	Board leadership change	Neutral	-5.8%	Ralph Kittle joined Telesat’s board, succeeding Michael Targoff.
Jul 08	Arctic communications agreement	Positive	+2.6%	Telesat reached an agreement in principle for Mil-Ka Arctic connectivity.
Jul 02	Satellite capacity donation	Neutral	-1.4%	Telesat donated satellite capacity to support Venezuela’s recovery efforts.
Jun 04	Annual meeting results	Neutral	-19.0%	Shareholders approved all items of business at Telesat’s annual meeting.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Pattern Detected

Positive news reactions were mixed: the July 8 contract-in-principle announcement aligned with a gain, while the July 27 regulatory development diverged with a decline.

Key Terms

uhf, x-band

2 terms

uhf technical

"an Ultra-High Frequency (UHF) and X-band constellation"

Ultra-high frequency (UHF) is a band of radio waves used for wireless communications such as TV broadcasting, mobile networks, Wi‑Fi, and device-to-device links; think of it as a specific lane on the airwaves highway where data travels. For investors, UHF matters because spectrum access, equipment that uses these frequencies, and regulation of this band affect a company’s ability to offer fast, reliable wireless services, reach customers, and generate revenue from connectivity or broadcasting.

x-band technical

"an Ultra-High Frequency (UHF) and X-band constellation"

X-band is a slice of the microwave radio spectrum (roughly 8–12 gigahertz) used for radar, satellite communications and certain military and weather systems. Think of it like a particular station on a radio dial chosen because its wavelength works well for high-resolution radar and relatively compact satellite links; that makes it important for companies that build radars, satellite terminals, antennas and related chips. Investors watch X-band activity because demand, regulatory access to the spectrum and new product wins can drive revenue and competitive advantage in defense, aerospace and telecom supply chains.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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Largest contract in company’s six-decade history expands Telesat Lightspeed constellation to 225 satellites and delivers secure Mil-Ka Arctic connectivity for the Canadian Armed Forces

OTTAWA, Aug. 04, 2026 (GLOBE NEWSWIRE) -- Telesat LEO ULC, a subsidiary of Telesat Corporation (Nasdaq and TSX: TSAT), one of the world’s largest and most innovative satellite operators, today announced that it has signed a $2.3 billion Telesat Lightspeed services contract with Canada’s Defence Investment Agency (DIA) to deliver secure Military Ka-band (Mil-Ka) Arctic connectivity to the Canadian Armed Forces (CAF) under the Enhanced Satellite Communications Project – Polar (ESCP-P) program. The contract also includes two five-year option periods valued at approximately $200 million each, bringing the total contract value to $2.7 billion. All amounts are in Canadian dollars unless otherwise noted.

The contract is for a period of 15 years of service, including the option years, with service under the contract beginning in 2028. The expected start of Telesat Lightspeed global service delivery remains on track for Q1 2028.

This is the largest contract in Telesat’s history and will significantly expand the scale and capacity of the Telesat Lightspeed network, positioning the company for accelerated growth. This agreement allows Telesat to immediately expand its Telesat Lightspeed network by 69 fully funded satellites, bringing the initial constellation from 156 to 225 satellites, all to be built by MDA Space, with both commercial and Mil-Ka capacity. The expansion will be funded through milestone-based payments from the Government of Canada starting in Q3 2026.

“This contract ensures the Canadian Armed Forces will have access to secure, resilient and sovereign connectivity years earlier than originally planned, at a great value for money, and with a scalable architecture designed to meet future global operational requirements and support interoperability with Canada’s allies and partners,” said Dan Goldberg, Telesat’s President and CEO. “High speed and low latency connectivity is critical for modern military forces, and Telesat Lightspeed is expected to be foundational for future CAF and allied governments’ operations.”

Goldberg added, “This contract also represents a step change in the scale and commercial potential of Telesat Lightspeed. The significant expansion of our constellation, combined with burgeoning demand for secure satellite communications worldwide, positions us to accelerate the growth of our business while serving the evolving and mission critical requirements of defence and commercial customers.”

This initial contract represents the first phase of the ESCP-P deliverables to meet the Mil-Ka service capability with Telesat Lightspeed. Under the agreement announced today, Telesat will deliver Mil-Ka connectivity across Canada’s Arctic region to the CAF, spanning 65 to 90 degrees North latitude. The Mil-Ka portion of the ESCP-P program also includes end-to-end network integration services – including user terminals, ground and control infrastructure, training, and support services – which will be covered under a separate agreement between the DIA and Telesat.

With secure Mil-Ka capabilities integrated into the constellation, Telesat Lightspeed is positioned to meet not only Canada’s Arctic requirements but also the broader needs of NATO members and other allied partners, supporting interoperability and mission coordination across geographic regions and warfighting domains.

The 69 additional Telesat Lightspeed satellites announced today will be built by MDA Space at its state-of-the-art, high-volume satellite manufacturing facility in Montreal and launched by SpaceX on already-secured Falcon 9 rockets in addition to another Falcon 9 rocket that remains subject to the completion of a launch services agreement. This expansion brings Telesat’s total expected investment in its network of 225 satellites to approximately $7 billion, with $2.7 billion invested to date. The program is expected to create and sustain thousands of high-quality jobs in Canada, spur domestic exports, and ensure Canada is at the forefront of the New Space Economy.

The ESCP-P program also includes an Ultra-High Frequency (UHF) and X-band constellation and services, for which MDA Space will be the prime contractor responsible for end-to-end mission delivery. MDA Space continues to advance the definition and development of this portion of the ESCP-P program, for which Telesat will serve as a key subcontractor, including acting as the overall systems integrator for the implementation of the Mil-Ka, UHF, and X band networks.

Investor Call

Telesat will host an investor call on August 4, 2026, at 8:30 am EDT to discuss the contract and the company’s updated financial outlook.

Webcast:
The investor call, including accompanying slides, can be accessed on a listen-only basis, at https://edge.media-server.com/mmc/p/48zvan8d/

Dial-in instructions:

The toll-free dial-in number for the teleconference is +1-800-715-9871. Callers outside of North America should dial +1-646-307-1963. The access code is 9712484 followed by the number sign (#). Please allow at least 15 minutes prior to the scheduled start time to connect to the teleconference. In the event of technical issues, please dial *0 and advise the conference call operator of the company name (Telesat) and the name of the moderator (James Ratcliffe).

A copy of the presentation materials for the investor call will be made available on Telesat’s website at https://www.telesat.com/investor-relations/investor-relations-resources/ after the call.

About Telesat

Telesat Corporation (Nasdaq and TSX: TSAT) (“Telesat”) is a global satellite operator and leader in advanced satellite communications, redefining connectivity through its Telesat Lightspeed Low Earth Orbit (LEO) network.

Designed from inception for interoperability with enterprise and government applications, Telesat Lightspeed delivers secure, resilient, high-performance broadband Carrier Ethernet connectivity with fibre-like speeds. Its advanced, software-defined architecture supports both commercial and military Ka-band services, enabling mission-critical communications with enhanced security and protection against evolving threats. Purpose-built to meet the most demanding requirements, Telesat Lightspeed provides telecom, enterprise, aviation, maritime and defence customers with unprecedented flexibility and control to dynamically manage their own services and deliver differentiated, end-to-end connectivity solutions worldwide.

With nearly 60 years of innovation, engineering excellence and a collaborative approach to customer success, Telesat is uniquely positioned to deliver secure, scalable and future-ready connectivity solutions that help customers solve their most complex communications challenges, drive growth, and achieve mission success. For updates on Telesat, follow us on LinkedIn, X, or visit www.telesat.com.

Media Contact
Monique Scotti
pr@telesat.com

W2 Communications for Telesat
telesat@w2comm.com

Investor Relations Contact:
James Ratcliffe                                        
+1 613 748 8424                        
ir@telesat.com   
                      
Forward-Looking Statements Safe Harbor

This news release contains statements that are not based on historical fact, including, but not limited to, the estimated timing of the commencement of global commercial service on Telesat Lightspeed, commencement of service under specific contracts, the impact of certain contracts on Telesat’s scale and capacity, the timing of milestone payments under certain contracts, the impact of certain contracts on the Canadian economy, the growth opportunities of Telesat Lightspeed and the increasing demand from defence and other vertical segments and the execution of additional contracts in the future and are “forward-looking statements’’ and “forward looking information” within the meaning of the Private Securities Litigation Reform Act of 1995 and Canadian securities laws. When used herein, statements which are not historical in nature, or which contain the words “will,” “ensure,” “planned,” “anticipates,” “expected,” “positioned,” or similar expressions, are forward-looking statements. In addition, Telesat or its representatives have made or may make forward-looking statements, provide forward-looking information, orally or in writing, which may be included in, but are not limited to, various filings made from time to time with the U.S. Securities and Exchange Commission (“SEC”) and Canadian securities regulatory authorities, and news releases or oral statements made with the approval of an authorized executive officer of Telesat. All statements made in this news release are made only as of the date set forth at the beginning of this news release. Telesat undertakes no obligation to update the statements made in this news release in the event facts or circumstances subsequently change after the date of this news release.

These forward-looking statements and this forward-looking information are not guarantees of future performance, are based on Telesat’s current expectations, and are subject to a number of known and unknown risks, uncertainties, assumptions, and other factors, some of which are beyond Telesat’s control, are difficult to predict, and could cause actual results to differ materially from those expressed, forecasted or implied in the forward-looking statements and forward-looking information.

Known risks and uncertainties include but are not limited to: risks associated with financial factors, including swings in the global financial markets, access to capital to construct our LEO satellite constellation and the ability to refinance Telesat GEO Inc.'s debt, the outcome of litigation related to Telesat GEO Inc.'s debt and the 62% equity distribution, volatility of securities values in an industry sector where values may be influenced by economic and other factors beyond Telesat’s control, inflation, rising or prolonged elevated interest rates, fluctuations in foreign exchange rates, and tariffs; risks associated with operating satellites and providing satellite services, including satellite construction or launch delays, launch failures, in-orbit failures, impaired satellite performance or dependence on large customers; the ability to deploy successfully an advanced global LEO satellite constellation and the timing of any such deployment; Telesat’s ability to meet the conditions for advance of the loans under the funding agreements for the constellation; technological hurdles, including Telesat’s and Telesat’s contractors’ development and deployment of the new technologies required to complete the constellation in time to meet Telesat’s schedule, or at all; the availability of services and components from Telesat’s and Telesat’s contractors’ supply chains; competition, including with other LEO systems, deployed and yet to be deployed; risks associated with domestic and foreign government regulation, including government restrictions and regulations, access to sufficient orbital spectrum to be able to deliver services effectively and access to sufficient geographic markets in which to sell those services; Telesat’s ability to develop significant commercial and operational capabilities; and the ability to expand Telesat’s existing satellite utilization. The foregoing list of important factors is not exhaustive. Investors should review the other risk factors discussed in our filings, including Telesat Corporation’s Annual Report on Form 20-F, Quarterly Reports on Form 6-K and other filings, made with the SEC and Canadian securities regulators, available at www.sec.gov and at www.sedarplus.ca.

FAQ

What is the value and duration of Telesat (TSAT) Arctic military satcom contract announced on August 4, 2026?

The contract is valued at $2.3 billion, with options lifting it to $2.7 billion over 15 years. According to Telesat, it covers Mil-Ka Arctic connectivity for the Canadian Armed Forces, with service starting in 2028.

How does the new Canadian military contract change the Telesat Lightspeed constellation for TSAT shareholders?

The contract funds 69 additional satellites, expanding Telesat Lightspeed from 156 to 225 satellites and increasing capacity by 44%. According to Telesat, this expansion is fully funded by Canadian government milestone payments starting in Q3 2026.

When will Telesat (TSAT) begin providing Mil-Ka Arctic services under the ESCP-P program?

Service under the Mil-Ka Arctic contract is planned to begin in 2028. According to Telesat, the expected start of global Telesat Lightspeed service delivery remains on track for Q1 2028, aligning with this program’s timeline.

Who are the key partners for Telesat’s $2.7 billion ESCP-P Mil-Ka contract and Lightspeed expansion?

MDA Space will build the 69 additional satellites in Montreal, and SpaceX will launch them on Falcon 9 rockets. According to Telesat, MDA Space is also prime contractor for UHF and X-band, with Telesat as systems integrator.

How much is Telesat investing in the full 225-satellite Telesat Lightspeed network?

Total expected investment in the 225-satellite Telesat Lightspeed network is about $7 billion. According to Telesat, $2.7 billion has been invested to date, with expansion funded by milestone-based payments from the Government of Canada starting Q3 2026.

What Arctic coverage will Telesat (TSAT) provide to the Canadian Armed Forces under the Mil-Ka agreement?

Telesat will deliver secure Mil-Ka connectivity across Canada’s Arctic region between 65 and 90 degrees North latitude. According to Telesat, this supports Canadian Armed Forces operations and interoperability with NATO members and other allied partners.

When is the Telesat (TSAT) investor call about the ESCP-P contract and where can investors access it?

The investor call is scheduled for August 4, 2026, at 8:30 am EDT. According to Telesat, investors can access a listen-only webcast online and use toll-free dial-in numbers, with presentation materials posted afterward on its investor relations website.