MDA Space Ltd. MDA-T has won a $1.8-billion contract with American telecommunications company EchoStar Corp. to build more than 100 5G satellites that will help extend connectivity to remote regions.
Brampton, Ont.-based MDA Space is the prime contractor for EchoStar’s new low Earth orbit direct-to-device satellite constellation, which will serve customers in the United States, Europe and worldwide when commercial service begins in 2029.
“Space network operators are going to be able to operate services that will be able to talk from a satellite to a cellphone and back and forth, for any 5G-compatible device,” MDA Space chief executive officer Mike Greenley said in an interview.
MDA Space was one of few bright spots on the S&P/TSX Composite Index on Friday, up 18.4 per cent for the day on an index otherwise bogged down by U.S. President Donald Trump’s newly announced tariffs. EchoStar’s stock declined 17.4 per cent on the Nasdaq Stock Exchange.
This deal is the fourth in a series of similar contracts won by MDA Space in a little over three years. Mr. Greenley said the company’s recent success can be largely attributed to its Aurora digital satellite.
The satellite is software reconfigurable, he said, giving operators of space-based networks flexibility in the areas where they provide service.
“The beams of communication that go between the satellite and the Earth are all computer controlled in real time, so you can aim them where you need to deliver communication services,” Mr. Greenley said.
In July, MDA Space acquired Israeli satellite chip maker SatixFy Communications Ltd., improving the vertical integration of its digital satellite production. MDA Space is also in the process of adding 185,000 square feet to its Montreal manufacturing facility, which will allow it to boost its production rate from a maximum of one satellite a week to 10 a week by this time next year.
Bank of Montreal analyst Thanos Moschopoulos called the deal a “win” for EchoStar in a note to clients on Friday. And for MDA Space, its growing exposure to contracts for constellations of low Earth orbit satellites is likely to continue benefitting its stock, he wrote, which has historically suffered from the “potential lumpiness of the business due to the timing of contract awards.”
“We believe MDA continues to have an active pipeline of additional constellation opportunities,” he wrote.
The Canadian company is also the prime contractor for the Telesat Lightspeed network and Globalstar Inc., a U.S. telecommunications company backed by Apple Inc., which are both using its Aurora satellite.
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MDA Space will deliver the first approximately 100 satellites to EchoStar in 2028. Its contract includes the option to expand the order to more than 200 satellites to fill out EchoStar’s initial constellation, which would increase the contract value to $3.5-billion.
EchoStar’s ability to secure financing could be the key determinant in whether the contract is expanded, Mr. Moschopoulos wrote.
MDA Space’s Aurora satellite is a prime example of the types of dual-use products Canada’s federal government may be looking to invest in shortly as well, as it intends to ramp up defence spending. The technology has commercial as well as government and military applications, Mr. Greenley said.
“As Canada looks at expanding its defence capability, military communications using space, including communications in the Arctic, is a very important area for Canada’s security, sovereignty and defence capability,” he said.
MDA Space went public in 2021 at $14 a share. After a choppy few years of trading below its issue price, the stock has climbed over the past year, closing at $45.93 a share on Friday. In 2025, the company is projected to hit $1.6-billion in revenue, Mr. Greenley said.
It’s an exciting time for MDA Space, given Ottawa’s increased focus on defence. Mr. Greenley said he hopes to see space-based capabilities, such as the company’s satellites, factor into the government’s spending plans.
“Canada, as a country, has always had a strong history in communications technology, and we’re now in a position to really lead in communication technology in space.”