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Canada proceeds with CAD1.4bn Telesat investment; OneWeb agrees satellite deal with Northwestel

13 Aug 2021

Canada’s federal government has entered into an agreement-in-principle with Telesat to invest CAD1.44 billion (USD1.15 billion) into Telesat’s advanced low Earth orbit (LEO) satellite constellation, Telesat Lightspeed, through a CAD790 million repayable loan and a CAD650 million preferred share equity investment for which the government would receive a dividend. As part of this investment, the government would also receive warrants that can be converted into common shares in Telesat so that Canadians can share in the financial upside from Telesat Lightspeed.

A press release added: ‘Telesat Lightspeed will enable broadband internet and LTE and 5G connectivity in Canada starting in 2024, ultimately connecting approximately 40,000 households in rural and remote regions. It will also allow for significantly better service offerings in many regions of the country where current speeds struggle to meet the demands of an increasingly digital world, and it will improve the company’s service for business clients in industries like air transport and shipping. This technology will help the government reach its goal of connecting all Canadian households to high speed internet by 2030, including many Indigenous communities throughout the north and near north that lack the connectivity required for social, economic and cultural prosperity.’ Telesat has committed to investing CAD3.6 billion CAPEX in Canada.

Separately, LEO satellite operator OneWeb and Bell Canada subsidiary Northwestel – northern Canada’s largest telecoms provider – signed a Memorandum of Understanding (MoU) to deliver new connectivity services to remote mines, businesses and governments across Canada’s north using OneWeb’s LEO backbone. Northwestel president Curtis Shaw commented: ‘This agreement with OneWeb allows us to provide improved broadband services to remote enterprises and governments using state-of-the-art LEO satellite technology. We look forward to providing innovative solutions for northern businesses to go along with our significant residential service improvements over the coming years.’

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