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GSS: international ambitions

12 December 2013

Satellite Evolution
November/December 2013

Gazprom Space Systems is expanding its portfolio of services and is in the process of augmenting its satellite fleet both within and beyond its domestic market. This is both an exciting and challenging time for the satellite operator. Helen Jameson spoke to Igor Kot, Deputy General Director, Gazprom Space Systems, about the company’s ambitions, capabilities and future strategy.

Question: Gazprom Space Systems is expanding its business both in Russia and beyond its domestic market. Can you tell us about your expansion plans in the international market? Which markets are you most interested in?


Igor Kot: After last year's launch of new Yamal-300K and Yamal-402 satellites, Gazprom Space Systems’ orbital fleet expanded to four satellites, and now it is almost equal in throughput to the Russian state constellation of communication Express satellites fr om RSCC.


The launch of the new satellites in­creased the company’s orbital capacity by 2.5 times. This underlines the fact that Gazprom Space Systems is going to be one of the major players in the Russian telecommunications sector. The satel­lite capacity on offer to the Russian market has grown by 25 percent, and Gazprom Space Systems' share of this market has increased by up to 36 per­cent.


Today, around 1,400 Russian TV channels are broadcast via satellites both from Moscow and the surrounding regions. About 60 percent of those are part of the packages provided by satel­lite pay DTH TV operators, and the oth­ers are dedicated to distribution via on- air and cable networks. The Yamal sat­ellites’ share in the Russian niche of TV distribution is about 50 percent. At present 12 digital TV packages of the first and of the second DTT multiplexes are distributed via Yamal satellites for the benefit of the Russian Federal DTT Program.


The launch of the new satellites con­siderably revived the Russian consumer satellite broadband access market. Based on the new satellite capacity, service providers have started to offer accessible broadband services and this has sparked the steady growth in satel­lite terminals. In terms of the corporate and consumer market as a whole, the total number of VSATs in Russia ex­ceeded 60,000. 20 percent of these are operating via Gazprom Space Systems' satellites.


The new Yamal satellites offer new opportunities to address Gazprom’s technological challenges. The arrange­ment of satellite links up to 155Mbps can enable the provision of communications for new construction sites and then for full redundancy for terrestrial commu­nication links.


Small, cheap VSATs placed on com­pressor, gas distribution and gas meas­uring stations, block valve nodes and drilling rigs are a useful and cost-effec­tive solution for SCADA.


As a whole, about 70 percent of the Yamal orbital constellation capacity is dedicated to serving the Russian mar­ket, and 30 percent the international market.
Presence on the international mar­ket (a larger market than any domestic one) is an important factor in reducing the commercial risks of the national sat­ellite operator. Moreover, the currency revenue from international sales is also important for the company in USS and EURO (this refers to the credits of the foreign banks attracted to building sat­ellites).


The Yamal-202 satellite operating in the 49E orbital position has been known to the world market since 2004. This satellite covers Europe, the Middle East and South-East Asia in C-band. It has been fully loaded for many years. Thanks to this satellite, GSS has be­come a recognizable name in the inter­national telecommunications commu­nity.


With the launch of Yamal-402, GSS expanded the geography of its business and entered into the African market. In total about 800MHz of its capacity is dedicated for use to the benefit of the African and the Middle East countries.


Question: What is driving demand in these international markets?


Igor Kot: All forecasts tell us that the demand for satellite capacity in Africa and Middle East will continue to grow at a rapid pace in the coming years. Everyone acknowledges that the drivers of this growth will be the intentions of the African countries to develop Digital Terrestrial Television (DTT), the appearance of new DTH platforms, video contribution needs, business expansion of big industrial corporations, the increase in shipping traffic along the coast and expansion plans of mobile operators and Internet providers to move services inland. This especially applies to landlocked countries that do not have access to the new undersea fibre-optic cables. Another good sign is the fast growth of the middle class population.


Question: How challenging has it been for Gazprom Space Systems to break into new international markets?


Igor Kot: There have been challenges. Gazprom Space Systems is not yet a widely known company in the African market. Yamal-402 is a new satellite, and its orbital position was not widely promoted. It will take time for GSS satellites to gain recognition in these markets.


The situation is also worsened by the fact that we are coming into the new market at a time of very strong compe­tition with the global and regional op­erators and when supply is going to be exceeding demand. Therefore, we in­tend to find our own niche and strategy that will allow us to consolidate a posi­tion in Africa and Middle East. We un­derstand how to do it as we passed this way in 2004-2005 with Yamal-202 sat­ellite which launched us into the inter­national market.


Question: What is Gazprom Space Systems' strategy for the African market given the existing market conditions?


Igor Kot: GSS will be focusing on the provision of turnkey, cost effective solutions for the African market. To enable us to do this, we will need to enter into partnerships with professional service-providers and system integrators that have long-term work experience in the area and know the market intimately. We very much rely on our partners and clients, with whom we have good, long-term, business relationships. We are also open to new contacts and offers.


GSS tries to create the very best environment for our customers and to share business risks with them. We process all orders carefully and promptly, and we are ready to calculate multiple link budgets to find the optimal solution, to provide satellite capacity for trial periods at any time, and always go the extra mile for our customers.


I would like to highlight, once again, the fact that we offer a high quality prod­uct to the African market. Yamal-402 is a cutting-edge, highly reliable satellite produced by Thales Alenia Space, with wide coverage over the African conti­nent, Middle East and Europe. Yamal-402 has a crossbeam connection be­tween Europe and Africa and high power beam (EIRP - 47-50dBW). This satel­lite also features a more powerful steerable beam (EIRP - 51-54dBW), which is pointed over Africa, and can also be connected with Europe.


Question: How much capacity has been sold on both satellites?


Igor Kot: It is important to note that both new satellites (Yamal-300K and Yamal-402) were launched, not as replace­ments, but to develop new business and therefore are loaded with newly created networks. The satellites are not loaded with existing clients migrating from other satellites or other satellite operators. Filling the capacity on the new satellites is part of a process wh ere potential clients must make a sound decision on their investment and. once made, this deployment of new networks may take from several months to a year. It is also not a simple decision for a customer to move from one operator's satellite to another operator. There should be strong reasons to do it as the process of moving to the new satellite incurs some considerable expenditure. Taking the above into account we expect some acceleration in loading of the new satellites at the beginning of 2014 and we expect to reach the planned fill rate by the beginning of 2015.


Question: What are your short term plans for GSS’ constellation expansion?


Igor Kot: The next part of Gazprom Space Systems’ constellation expansion will be the Yamal-401 satellite which will be launched in the first half of next year. It will replace the Yamal-201 satellite that is set to be retired, and will increase the satellite capacity for Russia.


This will be followed by the reloca­tion of the current Yamal-300K satellite to the East. At the new orbital position, Yamal-300K will provide effective cov­erage for the Far East and sea routes in the northern part of the Pacific Ocean and will extend the business geography of the company.


In the beginning of 2016, GSS will have a high throughput satellite. Yamal-601 will replace Yamal-202 at the 49 degrees East orbital position. Besides C and Ku-bands, this satellite will have a Ka-band payload. 40 beams will cover the entire Russian territory. The satel­lite's throughput (30Gbit/s) will allow GSS to serve up to one billion users. Thanks to the satellite's high through­put. broadband services for the con­sumer market and small businesses will be cheaper than similar services based on terrestrial technologies.


Question: What will your areas of focus be for the coming year?


Igor Kot: Our strategy is organic growth. Within this strategy, our main tasks in the coming year are to fully load the new satellites and, at a minimum, to double our revenue achieved in 2012. We will also launch Yamal-401 and we will begin the Yamal-601 project in order to enter the consumer broadband market in Ku- band. and to prepare for the provision of mass consumer broadband services in Ka-band.




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