Canadian satellite firm MDA Space says its contract with EchoStar Corporation has been cancelled after the U.S. company agreed to sell wireless spectrum to Elon Musk’s SpaceX for $17 billion US, mainly to power the future of Starlink and satellite 5G service. So that new Starlink play from today had implications for a Canadian company.
The deal, first announced on August 1, 2025, would have seen MDA build satellites for an EchoStar constellation. But EchoStar has since shifted its business strategy following spectrum discussions with the U.S. Federal Communications Commission (FCC). As part of that shift, EchoStar is selling its AWS-4 and H-block spectrum licenses to SpaceX, which will bring Starlink Direct to Cell 2 satellites that will be capable of 5G.
The August deal was worth $1.3 billion US ($1.8 billion CAD) from EchoStar to build more than 100 of its software-defined AURORA D2D satellites. The deal included options that could expand the network to more than 200 satellites, raising the contract’s value to around $2.5 billion US ($3.5 billion CAD).
EchoStar said the long-term plan could eventually grow to thousands of satellites, designed to deliver global talk, text, and broadband services directly to standard 5G smartphones. But yeah, looks like that deal was nixed in favour of SpaceX instead.
The deal caught MDA Space by surprise, said CEO Mike Greenley in a call to analysts today. “This is a very unexpected event,” he said. “This is obviously very sudden and a drastic change to the entire trajectory of EchoStar’s business. And so that’s a highly, highly unusual situation.”
MDA stressed the cancellation had nothing to do with its performance and said it will be paid termination costs under the contract. The company also noted it still has a $4.6-billion order backlog and is maintaining its 2025 financial outlook.
You may know about the Canadarm and Canadarm2 robotic arms used on the Space Shuttle and the International Space Station—those were made by MDA Space.
The Brampton-based company added it will continue pursuing new contracts in digital satellite constellations for broadband and direct-to-device services.
The news today sent shares of MDA Space plunging by 25%, down to $32.98 per share.
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