Shares of Canadian telecommunications satellite tv for pc operator Telesat surged Friday after the corporate introduced it might swap suppliers for its deliberate Lightspeed international web community.

Canadian house firm MDA will now construct the Lightspeed satellites, taking the place of French-Italian producer Thales Alenia House and leading to “complete capital price financial savings” of about $2 billion, Telesat introduced.

The corporate expects to start launching the primary Lightspeed satellites in mid-2026, with international service starting as soon as the primary 156 satellites are in orbit. The complete community is deliberate to include 198 satellites.

Telesat inventory surged as a lot as 64% with heavy quantity in early buying and selling from its earlier shut at $8.45 a share, earlier than slipping barely to nearer to 50%.

“I am extremely pleased with the Telesat group for his or her modern work to additional optimize … leading to dramatically decreased prices,” Telesat CEO Dan Goldberg stated in a launch.

The corporate had beforehand contracted Thales Alenia House to fabricate the satellites at an estimated price of $5 billion, together with about $3 billion for the satellites, plus the prices of rocket launches, constructing floor infrastructure and growing software program platforms to function the community.

Goldberg previously emphasized to CNBC that Lightspeed will not be meant to compete in direct-to-consumer markets in opposition to SpaceX’s Starlink or Amazon’s Kuiper. As an alternative, it is going to preserve Telesat’s present give attention to enterprise prospects — authorities and business markets that Starlink has expanded into over the previous yr.

Telesat additionally reported second-quarter outcomes Friday, together with $180 million in income, a lower of 4% from the identical interval a yr prior. Telesat’s web earnings jumped to $520 million within the quarter, in contrast with a web lack of $4 million a yr prior, a dramatic shift the corporate attributed largely to a $260 million cost from the FCC for clearing spectrum for 5G use within the U.S.

The corporate reaffirmed its full-year 2023 income steering, anticipating to herald between $690 million and $710 million.