Gazprom Space Systems’ international aspirations

20 September 2018

Gazprom Space Systems (GSS) is a Russian satellite operator with business interests crossing the boundaries of domestic market. The company owns Yamal satellites operating at a significant geostationary orbit arc segment (from 49°E to 183°E), with the service zone covering the most part of the Eastern hemisphere and reaching the western part of the North American continent. The operator provides capacity in the markets of Eurasia, Africa and the Middle East.

How important is the export component of business for GSS?

GSS’ business has crossed the Russian boundaries long ago, and now the company is essentially an international operator. The fact that 40% of the company’s revenue come from the provision of satellite capacity on the international market, evidences that the international market is important for us. The international market is much broader than the Russian one, hence such geographical business diversification makes it more predictable and sustainable.

How is international business of GSS organized?

On the international market GSS acts only as a satellite operator providing the main service - satellite capacity. We do not develop a ground infrastructure and sales offices outside Russia for end customer support, but we cooperate with providers being strong and competent in different local markets outside Russia. This is our conscious position that allows us to minimize business expenses and avoid competition with our customers. Within the conditions of market transition and at a time when operators are seeking for new forms of doing business, this approach may seem rather old-fashioned, but it still works.

What assets do you have on the international market?

GSS owns four satellites, and foreign customers lease capacity on each of them. The leader in terms of export revenue is Yamal-402 positioned at 55°E. Europe, the Middle East and Subsaharan Africa are the regions reached by its beams. One of the competitive advantages of Yamal-402 on the African market, especially being popular among media companies, is the well-chosen service area, allowing to cover both the francophone West and the English-Portuguese-speaking South and East. Another advantage valued by service providers is cross-trap option between Europe and Africa and the ability to organize channels from data centers to regions consuming such data.

Judging by the coverage areas of Yamal-300K in 183°E, GSS is even more focused on the international market, isn’t it?

Yes, that is true, the percentage ratio of Russian and foreign customers evidences that Yamal-300K is the most targeted on the international market. And although its coverage area is very important for Russia with the East experiencing a shortage of satellite capacity and low-cost services, we also see that this satellite is in demand with companies providing inflight and maritime connectivity.

Yamal-202 is the veteran of GSS space fleet. What are you preparing for replacement?

We started our active international efforts with Yamal-202. This satellite has a semi-global C-band beam, covering Europe, Middle East, North Africa, South-East Asia. Early next year we are going to replace this satellite by Yamal-601. The coverage area of new satellite almost repeats Yamal-202 in C-band. All existing customers will move to new satellite getting some benefits: EIRP on a new satellite will be two decibels higher. It will allow customers to use more efficient coding modulation systems and use the bandwidth more cost-effectively. Yamal-601 is also equipped with Ka-band payload providing 32 beams covering the most populated regions of Russia. GSS is focused on growth with Yamal-601, the company intends to develop cost-effective wholesale services of broadband Internet access.

Therefore, Yamal-601 is the very picture of our development strategy, combining traditional satellite capacity with operation in traditional bands in wide areas, and capacity organized on the principle of high-throughput satellites (HTS) with multi-beam coverage and frequency reuse.

What throughput has Yamal-601?

The throughput is 30 Gbit/s. For Russia this is quite enough now. During the first five years of satellite operation, we intend to increase the customer base to 200-300 thousand user terminals, both for individual and collective usage.

Following Yamal-601 launch, you are starting operation in Ka-band. What does this business mean for you?

Ka-band services is a new business for us, but in general, the satellite broadband is already familiar to us, as we sell similar services in Ku-band. On this market we can play two roles. In the first instance, we provide services to end users. In the second, we provide satellite capacity to VNOs. Using this approach, we are going to realize up to 80% of the system capacity. Currently, there are dozens of such companies operating via GSS satellites. And then, they provide services to customers using our capacity and our technological platform. And they are willing to develop this business in Ka-band further.

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