Gazprom Space Systems Celebrates Its 25th Anniversary

21 September 2017

Satellite Executive Briefing
Vol. 10 No. 6 September 2017

Gazprom Space Systems (GSS) steadily moves forward to its 25 anniversary. The company holds strong position in the Russian satellite communications market (with 30% market share), being one of two Russian satellite operators. GSS is well known on the international market as well. GSS ranks among the Top 25 Fixed Satellite Operators.

On the occasion of its 25th anniversary, GSS Director General Dmitry Sevastiyanov, gave us his insights on his company and its position in the industry: «Our primary achievement involves sustainable development and revenue growth over a number of years. The company started satellite operator business in 2000. Since then our annual income became 35 times more and, in 2016 amounted to approximately 5.5 billion rubles (82 million US dollars). Despite the economic crisis, drop in the value of the national currency and falling demand for satellite capacity at a global scale, the revenue growth for the last year was 9%.

Our first satellite Yamal-100 was launched in September 1999, almost seven years after the company incorporation. The core business of GSS today comprises modern space and terrestrial assets: four Yamal satellites in orbit, large teleport, TV center and satellite communications network in Russian regions. Three of the four satellites were launched between 2012 and 2014, i.e. they are still quite young.

The total capacity of GSS orbital constellation is about 9 GHz. Most part of the capacity is intended for utilization within Russian telecommunications. A third of the capacity is concentrated in the beams serving the territories outside of Russia. This capacity is the basis for the international business of the company.

In recent years, thanks to Yamal-402 and Yamal-300K satellites, with service areas covering Europe, the Middle East, Africa and the Asia-Pacific region, GSS has significantly increased its sales in the international market. In 2016, the international sales share comprised 36% of the company’s total revenue, while in 2010, before the launch of new satellites, this share was not more than 25%. From 2012 to 2016, the revenue from international market sales, in the US dollar equivalent, almost doubled.

In the domestic Russian market, GSS operates as a satellite operator and as a satellite communication service provider, based on its own ground infrastructure. These services are provided mainly to subsidiaries of the Russian gas giant Gazprom.

On the international market, the company operates only as a satellite operator. We provide the capacity of our orbital satellite fleet, but we do not develop our own ground infrastructure and agency network abroad. Thus, in its international business, GSS relies on a variety of service providers focusing on various sectoral and geographic markets, having relevant experience, personnel and infrastructure and providing communication, television, Internet access services to end users on the basis of the contracted capacity of Yamal satellites. This approach allows GSS to minimize the commercial and operational business expenses and not to compete in the end-user market with its customers of the satellite capacity. The end users of the services are oil and gas, energy, mining, transport, financial sectors, government institutions, companies implementing educational and humanitarian projects, international nongovernmental organizations, cellular operators, TV companies, etc.

Yamal-300K satellite with a wide fixed Ku-band beam, extending across the Pacific Ocean from the Russian Far East to the west coast of North America, is actively used for avionics and maritime broadband satellite services.

If we consider the «nationalities» of the largest GSS customers, these service providers are represented by the USA, Hong Kong, Singapore, the Netherlands, South Africa. In total, there are approximately 50 foreign service providers that use Yamal capacity (they represent 30 countries, mostly from Europe and the Middle East). These companies provide services to end users in more than 100 countries of the world (just over 40% — in South and South-East Asia, approximately equally 25% in Africa and in the Middle East, and the rest in Europe).

Besides, the World Teleport Association (WTA) in its recent independent study, based on a survey of service providers and teleports leasing capacity from satellite operators to provide services to end users, in many respects highly appreciated the quality of GSS services."

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