Projected drop in revenues While Lightspeed will compete indirectly with SpaceX’s global Starlink communications network, which is already well-established, Telesat says it is going after enterprise customers such as airlines, cruise ship operators, governments and telecom companies rather than the direct-to-consumer market targeted by Starlink and other competitors like Amazon’s Kuiper. During Thursday’s call, Goldberg acknowledged that Starlink is already “cannibalizing” some of Telesat’s enterprise customers, particularly in the cruise ship space. That’s a major reason why Telesat is projecting a significant drop in revenues this year. The firm said Thursday it expects fiscal 2023 sales in the range of $545 million and $565 million, down from $704 million in 2023. Goldberg said about half of the projected decline is due to falling sales to direct-to-home satellite customers as more consumers ditch traditional satellite and cable connections in favour of streaming services. Declining revenues from enterprise customers such as cruise ship lines account for most of the rest, he explained. As Telesat’s contracts with cruise ships and their service providers come up for renewal, some of those customers are signing with Starlink. Still, the CEO told analysts he’s optimistic that Telesat will win back much of that business once Lightspeed comes online, adding that the customer exodus to Starlink is a “strong validation of the market embrace of LEO” satellites. “We fully anticipated the transition to LEO, and it’s precisely why we’re building Lightspeed and why we’re so bullish on it,” Goldberg said, later adding that clients who’ve jumped to Starlink are “well aware” of Lightspeed’s capabilities and could return. “The big enterprise customers are sophisticated about what’s happening out there in the market,” he said. “They have quite a bit of flexibility to add networks, drop networks. They like what we can offer and the flexibility that we offer and our ability to concentrate capacity at ports and on key shipping lines.” Goldberg said Lightspeed is generating “great interest” from customers in a range of verticals, including governments and airlines as well as maritime clients such as cruise lines. “As good as SpaceX is and as fast as they’re moving, no one is going to own this entire market,” he said. “The market is huge; it’s growing fast. I’d say particularly for enterprise customers, they never want to put all of their eggs in any one basket.” Telesat’s revenues fell seven per cent last year compared with 2022. The company attributed the decline to rate reduction in the renewal of a long-term agreement with a North American direct-to-home customer combined with a reduction of capacity and rate by another one of its North American direct-to-home customers, as well as an equipment sale in 2022 that was not repeated last year and lower revenue from certain Latin American customers. Telesat turned a profit of $583 million in 2023, compared with a net loss of $82 million the previous year. The company said the turnaround was mainly due to C-band clearing proceeds recognized in the second quarter of 2023 as well as lower foreign exchange losses on the conversion of its U.S.-dollar-denominated debt into Canadian dollars and a higher gain on the repurchase of debt. Telesat’s shares were down 61 cents to $11.63 in late-afternoon trading on the Toronto Stock Exchange. Get our email newsletters Get up-to-date news about the companies, people and issues that impact businesses in Ottawa and beyond. Sign me up