Closing Bell - Manifest Space: MDA Space Strikes $1.1B CAD Partnership with Globalstar with MDA Space CEO Mike Greenley 2/11/25

Episode Date: February 12, 2025

Globalstar, which provides the space-based emergency services for Apple’s iPhones, is tapping MDA Space to build satellites for its next-gen communication satellites. MDA CEO Mike Greenley joins Morgan Brennan to talk the new contract, the future of connectivity, and how the Canadian company is navigating the possibility of tariffs.

T-Mobile's Starlink service unveil at the Super Bowl isn't the only direct-to-sell satellite news this week. GlobalStar, which provides the space-based emergency service for Apple's iPhones, is tapping MDA Space to build the satellites for its next-gen communications constellation. For MDA Space, it's a contract worth about $770 million. CEO Mike Greenlee says it represents new business in addition to the work MDA Space is already doing for GlobalStar and for Apple. Our contract with them three years ago,

which we're currently delivering on this year, was to build 17 satellites with an option for nine more to expand their historical analog direct-to-device communications capability. And that's for them to provide emergency services to smartphones, among other things. And then this new contract is for a new constellation or constellation expansion with much more capability to be able to use our MDA Aurora digital satellite product with over 50 satellites.

So great new operational enhancements for them in their space-based networks for direct-to-device communications and presumably maybe some internet of things at some point. It all speaks to this new space-enabled era of more connectivity, more consistently, for more places. It's a dynamic evidenced by T-Mobile's splashy move to open its SpaceX Starlink beta service to mobile users regardless of their carriers. It's reflected in the build-out of AST Space Mobile's Constellation, which will work with AT&T and Verizon. And it's on display every time the satellite image pops up in the top right corner of an iPhone. We talk about a third of the

earth population not being available to be able to have data access right now, persistent data access. We'll all talk about our rural regions in a country like Canada, the northern regions, not being able to have access to communications. I think with all of the communication networks, we're going to have persistent, high speed communications globally moving forward. So there'll be multiple network providers that do that, GlobalStar being one of those. You mentioned some others looking for high-speed connectivity. And then I think we're going to see over time, you know, gradual increases in performance capability.

These services have started out with emergency tech services, and logically over time with more capacity, we'd go to, you know, steady tech services, maybe data services, maybe voice someday. On this episode, MDA's CEO Mike Greenlee on the new contract, the future of connectivity, and how the Canadian company is navigating the possibility of tariffs. I'm Morgan Brennan, and this is Manifest Space. It's an important day for us at MDA Space today. We were announcing that we've just signed a $1.1 billion Canadian project with a contract

with Global Star to be able to provide them with over 50 of our MDA Aurora digital satellites for their direct-to-device communications constellations. And so when we talk about this Aurora satellite, this is different than what you're already doing with MDA Space. I mean, already doing at MDA Space with GlobalStar that as it relates to Apple and current connectivity. That's correct. Our contract with them three years ago, which we're currently delivering on this year, was to build 17 satellites with an option for nine more to expand their historical analog direct-to-device communications capability.

And that's for them to provide emergency services to smartphones, among other things. And then this new contract is for a new constellation or constellation expansion with much more capability to be able to use our MDA Aurora digital satellite product with over 50 satellites. So great new operational enhancements for them

in their space-based networks for direct-to-device communications and presumably maybe some internet of things at some point. And how quickly do we see those satellites get deployed and that constellation build out? Pretty quickly, actually. So we've been working on this for a while. We announced in November of

twenty twenty three that we were starting a new constellation with an unnamed customer because commercially that's what we were required to say at the time. And that was actually this this piece of work. So this we've been working on an authorization to proceed,

which was at about the three hundred to three hundred fifty million dollar Canadian level that we've been working on an authorization to proceed which was at about the 300 to 350 million dollar canadian level that we've been working on through 2024 and now we're turning that into a definitized contract that i've just explained that we're announcing today so we've been well into this now for 14 to 15 months and we will be delivering satellites uh you know in the latter half of 2026 and this contract goes into 2027. The Aurora aspect of this platform, what does that bring to the table that's new and provides a capability that maybe we haven't seen before? Yeah, the digital satellites are pretty impressive

and pretty useful. The main item is it's a software-defined satellite with digital beam forming that allows the operator to have a much greater number of communication beams from the satellite down and the ability to dynamically reconfigure those beams during operations, which means you can point them to where your customers are. You can aggregate your smaller beams together into bigger beams with bigger capacity for communications or break them up into a series of smaller beams and aim them where they need to go so much more efficient operations the the ability to make money with all your communications capability all the time is greatly enhanced with the digital satellites

so that's uh that gives global star much more operational leverage in delivering their communication services to their customers how does this satellite offering compare to the low Earth orbit constellation that you're building for Telesat? The MDA Aurora product is largely the same product. There's a lot of commonality between the product variant for Lightspeed and the product variant for Global Star. The Aurora is emerging in two variants. One, which is the broadband variant for more you know data internet like communication services like light speed is providing and then the second is more of a direct-to-device configuration which is the configuration for global star there's a lot of

commonality between those two variants probably around 70 percent um but uh they they do have you know slim slight differences based on those two major application area, broadband communications or directed device communications. And you're building all of these satellites in a new factory that you started constructing back last fall, correct? How quickly does that come online?

Yeah, it's coming online as we go through the year, this year in 25. So we're doubling our manufacturing capacity and with a with a satellite with a high volume satellite manufacturing expansion um we'll be able to produce this time next year two satellites a day so uh the uh external construction of that building is complete and it's being sealed in right now it'll be fully sealed in as we go through the next couple of months and then through the the remainder of 2025, be kitted out

with all the high volume satellite manufacturing equipment for the lines that will be able to produce two satellites a day as we enter 2026. Do you think that this market is going to grow so much that you will see years and years worth of potential business for two satellites a day? We think so. We may not get to two satellites a day in persistent production, but we feel we need that capacity for surge when overlapping interests of different customers hit at the same time. We need to be able to produce at that rate to be able to meet their needs. I think that this is our third constellation order now in three years. We have a very active pipeline for additional communication satellite constellations and that we, you know, we're going to need this capacity to be able to keep up. And as we can see from Global Star, we can get into some nice persistent relationships whereby as people's space-based networks continue to load up with traffic, they're going to want to

expand them. They're going to want to modernize them. Over time, they're going to need to replace their satellites because satellites have a defined lifespan, as we know. And so getting with a good handful, I always talk about it'd be nice to have a six pack someday, but to be able to have a number of satellite constellation customers that we can deliver to and then refresh and regenerate over time and use that two satellite a day capacity to be able to meet their schedules. We're coming off of the Super Bowl, a lot of folks recovering from that. And actually, one of the commercials that seems to have been the splashiest was T-Mobile's unveiling of access to the Starlink beta service, not just for T-Mobile customers, but for everybody for a certain period

of time. How does it speak to this new chapter of connectivity through your smart devices that we're now entering? Yeah, I think globally we're going to see this. We're going to see, you know, global connectivity. There's some, you know, we talk about a third of the earth population

not being available to be able to have data access right now, persistent data access. We'll all talk about our rural regions in a country like Canada, the northern regions not being able to have access to communications. I think with all of the communication networks, we're going to have persistent high-speed communications globally moving forward. So there'll be multiple network providers that do that, Global Star being one

of those, you mentioned some others, looking for for high speed connectivity. And then I think we're going to see over time, you know, gradual increases in in performance capability. This these services have started out with emergency tech services and logically over time with more capacity, we go to, you know, steady tech services, maybe data services, maybe voice someday. We'll see where all this goes. But the certainly the roadmaps for this technology are going to be able to afford um increasing enhancements to capacity over time and and uh you know we're there to provide these uh these satellites with increasing levels of

capability to the space network operators do you think there is going to be room for for everyone as this market shakes out i mean there's global star there's spacex with starlink uh we know amazon is working on kyper right now there's uh Star, there's SpaceX with Starlink. We know Amazon is working on Kuiper right now. There's, you know, a number of players that have been in the market for a while. There's AST Space Mobile. I mean, it does seem like there are a lot of different companies looking to work on this issue of connectivity and bring more service more quickly to more places. And I just wonder, I just wonder how to think about this competitive landscape. Yeah, I think that humanity has never demonstrated that there's such a thing as

not enough bandwidth. And so as we've done things terrestrially, as we've laid fiber around the world, as we have put up mobile phone networks around the world, in terms of like getting access to those networks and then increasingly wanting more and more capability on those networks whether it's for texting or data or voice or streaming video or just keep going we just keep looking for more and we haven't really seen a lot of maxing out of interest in those things over time as we use space networks now to fill in all the gaps around the world and start to, you know, work towards having capability and performance that's similar to terrestrial

networks, I think there's still a lot of room to grow for folks. There's going to be some limit, for sure. But certainly all the players that we speak with in our pipeline, we evaluate the folks in our pipeline pretty carefully. They've got strong business cases. They've got strong financing. Their business models seem to stand up. They've got anchor customers identified. And so there seems to be a good lift to come still to get a series of networks around the world in this area. And if I could just go back to how you're actually building these Aurora satellites specifically. I know with your last contract with Global Star,

you were using Rocket Lab buses. Is it going to be a similar situation here where maybe you're working with other suppliers? The MDA Aurora satellite has a number of suppliers around the world. It is an MDA space bus and an MDA space payload. But we do have all sorts of elements of that bus and all sorts of elements of that payload that come from a global network of suppliers to us. And it's been really important actually in selecting the suppliers to the MDA Aurora product and the partners that we're working with to ensure that, like always, you have good quality and a good price, but also that we have partners that are ready and able to

scale with us. You know, we're building a factory that can produce two satellites a day. We have a large pipeline, multiple billions of dollars of opportunity that we are actively pursuing. And we need that supply base and the partners that we're working with to scale with us. And we're selecting people that we believe can. And so that's been really important with the suppliers we've selected from around the world. And of course, we're just speaking about one piece of your portfolio, something you and I have talked about in the past as well as some of the lunar activity, some of the lunar hardware that you're building as well or competing on right now as well. And I would love to revisit that with you, especially as we have multiple lunar landers either on their

way or poised to be on their way to do these commercial landings on the moon. And it does seem like the momentum is, dare I say, starting to ramp up around bringing more activity to the moon. You can definitely feel that. If you look at the Artemis Accords with the United States, we're over 50 countries now, I believe, 52 or something like that, that have signed the Artemis Accords to work together to be able to live and work on the moon moving forward. You mentioned the commerciality of this whereby companies are now having a range of commercial activity to be able to get to and operate on the moon. We're definitely involved in this opportunity, as you mentioned. Our MDA SkyMaker robotic systems are working with a range of different opportunities there.

And certainly Canada Arm 3 with the Government of Canada for Gateway, the new space station that will orbit the moon. And then a number of rover projects, rover teams with Lunar Dawn in the United States, chasing the rover opportunities there. And a solid rover opportunity in Canada that we're pursuing, which will be for the moon as well. So all of these things are very active files at the moment and it's a very exciting time, I agree. The lunar expansion seems to be in full flight. When you look across your portfolio

and you look across some of the opportunities in space as they're manifesting in real time, what are you most excited about? The persistent nature of the space economy. I just, I always liken it to being in the 1500s and living in Europe. And some folks started to discover North and South America. It's like a new continent of opportunity with all kinds of resources and opportunity for people to engage in and discover.

And it feels like space is like that right now. It's not, it's not just a go to space to say that we did, like we did in the sixties and early seventies. It's now a persistent economy that right now. It's not just a go to space to say that we did like we did in the 60s and early 70s. It's now a persistent economy that's emerging, that's affordable to access, that multiple countries and multiple companies can engage in. And it's a legit growing economy that's starting to emerge. That's the exciting part. And finally, just if I look at some of the policies here on earth, I wonder how they might affect some of the policies moving forward with space. wonder how they might affect some of the policies moving

forward with space i you know mda space for example canadian company i know there's no tariffs by the us on canada right now there's like a 30-day pause but it's something that is being bandied about it and being discussed how are you gaming out things like trade policy right now we pay close attention to it um and uh we get asked a lot of questions and inputs from governments and we give that those inputs as we go so we're you know we get asked a lot of questions and inputs from governments. And we give those inputs as we go. So we're, you know, we definitely are a voice in the crowd. And, you know, we feel our voices are being heard. We pay attention to what people are looking at and considering.

And we, you know, as a result of that plan, tariff management and or mitigation activities as we go. That's all a work in progress as all of these conversations are emerging. The great thing is, is that our customers and our pipeline are completely with us. They really appreciate our technologies. The orders, as are

evidence today, are coming in and there's lots more are in discussion. So it's a you know, it's a it's something to manage. But the business business continues. Space is a highly collaborative global enterprise and the all the activities continue to move forward. But the business continues. Space is a highly collaborative global enterprise.

And all the activities continue to move forward. Mike Greenlee, the CEO of MBA Space. Thank you so much for the time today. I appreciate it. Thank you. Always good to talk. That does it for this episode of Manifest Space. Make sure you never miss a launch by following us wherever you get your podcasts and by watching our coverage on Closing Bell Overtime.

I'm Morgan Brennan.