MDA Space Ltd reported a significant extension to its work for Telesat LEO ULC, with a $474 million contract expansion that will add 27 AURORA satellites to the Telesat Lightspeed program. The additional units raise the total number of satellites MDA is building for Telesat from 198 to 225.
As part of the expanded agreement, 500 MHz of military Ka-band spectrum will be incorporated into Lightspeed satellites that are currently being manufactured. That military spectrum is being substituted for an equivalent amount of commercial Ka-band spectrum. The amendment also covers other long-lead items tied to the constellation build.
The constellation growth follows a Strategic Partnership Agreement announced last year involving MDA Space, the Department of National Defence, and Telesat. That partnership was intended to deliver connectivity across the Canadian Arctic under the Enhanced Satellite Communications Project-Polar program.
Telesat confirmed it is enlarging its LEO fleet by 69 satellites, moving the number of fully funded satellites from 156 to 225. In connection with related government procurement, the Government of Canada announced on the same day that MDA Space will act as prime contractor for the ESCP-P program's secure Ultra-High Frequency and X-band constellation in Medium Earth Orbit. The announcement noted that negotiations to define and develop those services are in progress and that contract specifics will be disclosed when finalized. Telesat will serve as a subcontractor to MDA Space on this MEO component.
All MDA AURORA satellites destined for the Telesat Lightspeed constellation will include the 500 MHz of military Ka-band in addition to commercial Ka-band capacity, enabling military communications across high-latitude regions. Production of these satellites will take place at MDA Space's manufacturing facility in Montréal.
The market reacted to the deal: MDA Space shares rose 4.6% on Tuesday following the announcement. Company disclosures indicate that the majority of the $474 million contract increase will be recorded in MDA's backlog in the third quarter of 2026.
Summary
MDA Space's contract with Telesat increases by $474 million to cover 27 additional AURORA satellites and a 500 MHz transfer of Ka-band spectrum from commercial to military use on satellites now under construction. The Government of Canada has also selected MDA as prime contractor for an ESCP-P UHF and X-band MEO constellation, with contract negotiations ongoing. The bulk of the contract value will be added to backlog in Q3 2026.
Key points
- MDA's build commitment for Lightspeed rises from 198 to 225 satellites, following a $474 million contract increase.
- The expanded deal includes 500 MHz of military Ka-band spectrum replacing the same amount of commercial Ka-band on satellites currently being built.
- The Government of Canada named MDA prime contractor for an ESCP-P secure UHF and X-band MEO constellation; contract details are pending as negotiations continue.
Sectors impacted
- Aerospace and defense manufacturing - increased satellite production and government prime contracting.
- Satellite communications - spectrum configuration and capacity for military and commercial users.
- Government procurement - development of secure communications for high-latitude operations.
Risks and uncertainties
- Contract specifics for the ESCP-P MEO component have not been finalized; negotiations are ongoing, creating uncertainty about final scope and terms. (impacts aerospace and government procurement)
- The timing of backlog recognition - the majority of the $474 million will be added to backlog in the third quarter of 2026, which affects financial reporting timelines. (impacts corporate finance and investor expectations)
- The agreement includes a reallocation of 500 MHz from commercial to military Ka-band on satellites under construction; the implications of that spectrum reallocation for commercial services are noted but not detailed. (impacts satellite communications and commercial capacity planning)