GEO bloodbath continues apace

Few operators have given a more damning assessment of the prospects for GEO connectivity than Telesat. During the company’s March 27 earnings call, management acknowledged that it has not purchased a new GEO satellite in nine years and feels no compulsion to change this even with two more satellites, Anik F2 and F3, so low on fuel they must shift into inclined orbits to stave off retirement.

Telesat’s reasoning, per CEO Dan Goldberg: the company hasn’t been able to close a compelling business case for a GEO satellite in some time.

Telesat reported a C$267M ($187M) impairment charge for 2024, up 235% y/y as broadcast customers forgo satellite transmissions and broadband customers increasingly move to Starlink. Some C$39.7M of the impairment was specifically reported against Telstar-18 Vantage, a high-throughput satellite launched in 2018 and once considered a key growth driver. Telesat’s own LEO constellation, Lightspeed, is about a year and a half away from launching.

Telesat is the second major GEO operator to disclose a notable impairment charge reflecting difficulty selling GEO capacity. Eutelsat in February disclosed a €535M ($560 million) impairment on its GEO assets, from which it now expects lower revenues. Here another flagship high-throughput satellite, the Konnect VHTS launched in 2022, is seeing headwinds competing against Starlink.

Over in Japan, Sky Perfect JSAT gave a similarly blunt assessment even while preparing to order a new GEO satellite from Thales Alenia Space. In a transcript of the company’s Feb. 6 earnings call, JSAT President Eiichi Yonekura said that after 36 years in GEO orbit, the company has to look elsewhere to grow.

“Since 1989, we have launched over 30 GEO satellites, but for future growth, relying only on GEO will not work. So, we are expanding into medium and low Earth orbits as well,” he said.

JSAT’s multi-orbit expansion is, so far, LEO-focused through a partnership with Earth observation operator Planet for 10 optical satellites, and a collaboration with iQPS on radar imagery. Telesat is fully committed to Lightspeed as its growth engine, while Eutelsat is investing heavily in LEO through its OneWeb constellation and the EU’s IRIS2 network.

Despite the hype around multi-orbit as the way forward, write-downs in the value of GEO satellites, the perennially underwhelming numbers of new GEO orders, and the surging investments in LEO and MEO alternatives are starting to tell a different story.

SOURCE: https://www.telesat.com/press/press-releases/telesat-reports-results-for-the-quarter-and-twelve-months-ended-december-31-2024/