[Satellite News 04-10-09] Russia’s Gazprom Space Systems could need to lease capacity from other operators while it waits for the launch of a slew of new satellites, according to a company executive.
    Igor Kot, deputy director general at Gazprom Space Systems, told Satellite News, “During this current period, and until our new satellites launch, we will consider different forms of cooperation with other satellite operators with the purpose of temporarily using their capacity to fill the vacuum created by the delay of the launch of our Yamal-300 satellites.”
    The operator has found itself in a tricky situation due to problems with the new Yamal-300 satellites, and Kot believes Gazprom has been let down by prime contractor RSC Energia. “The main challenge of our company for the last year and for the next two years is to survive — to run the business under the conditions of no spare existing capacity on our Yamal satellites. Our operating satellites Yamal-100, Yamal-201 and Yamal-202 were full in 2007,” he said. “We relied heavily on the fact that our two new Yamal-300 satellites would enlarge our constellation by the end of the last year. On the conditions of a very successfully developing market environment they would have come online at the right time for us. However, to our great disappointment, the prime contractor, RSC Energia, has been breaking its obligations under the contract.”
    The situation has created problems for Gazprom. Kot said, “Energia did not launch Yamal-300 satellites in 2008 (as per the contract) and according to Roscosmos’ information, did not submit an application for their launch in 2009. Energia has not even started the satellites’ assembling yet, so the launch date has not still been defined,” he said.
    RSC Energia could not be reached for comment.
   
Hampering Revenue Growth
Gazprom revenues jumped 20 percent in 2008, as the operator generated $84.7 million in sales. “We achieved it by the further development of value-added services that we provide using our own teleports, hubs and regional satellite networks. However, these possibilities are also limited by the lack of satellite capacity, therefore next year we don’t expect strong revenue growth,” Kot said.
    Despite the struggling economy, Kot believes there is still a strong demand for satellite capacity in Russia, which accounts for 75 percent of Gazprom’s revenues. “We have a waiting list for clients keen to get any released bandwidth on our current satellites, so we do not expect any decrease in sales.”
    The broadcast market in Russia is growing, and domestic and international operators are benefiting, “According to our estimates, about 640 Russian and foreign TV channels (including about 300 TV channels broadcast in DTH packages) are broadcast via the satellites of the Russian satellite operators [Gazprom] and RSCC. Moreover, due to the absence of free capacity on Russian satellites, TV companies and DTH operators lease capacity on foreign satellites covering the Russian territory. Around 120 Russian TV channels are broadcast by the foreign satellites Intelsat 904, ABS 1, Eurobird 9,” Kot said.
    Looking beyond the Yamal-300 satellites, Gazprom signed a deal in February with Thales Alenia Space for two Yamal-400 next-generation communications satellites. “Unfortunately, Russian manufacturers do not have qualified offers for such a size (of satellite),” Kot said. “The important factor of the choice, especially considering the global financial crisis, was that the supplier would help arrange project financing with preferable conditions,” he said.
    Gazprom also  could turn to other manufacturers in the future. “We are considering placing an order for a mid-sized Yamal-300K satellite to be built by the other Russian manufacturer, ISS – Reshetnev Company, with a launch date in 2010. The financing basis of the project is Gazprom Space Systems’ own funds and borrowing against current assets. However, this contract is not signed yet.”
    Once new capacity does come online, Gazprom hopes to be participating in growth markets such as broadband and high-definition (HD) TV. The broadband market “is quite fast developing in Russia. There are state programs as well as commercial projects. About 10 hubs of our clients are providing broadband services operate via our Yamal satellites. Also, we provide such services based on its teleports. We have also built a videoconferencing system for Gazprom, and together with Tomsk University (one of the biggest scientific and educational centers in Siberia) and the regional administration, we have built a teleport that has become the basis for the educational network of the Siberian region. Finally, in the framework of the project Gymnasiums Unit of Russia we are building a wide network for videoconferencing and access to educational resources for two thousand gymnasiums all over Russian territory,” Kot said.
    The HD market is another market Gazprom expects to grow. “Russia has definite potential for HD service development. However, the development of the standard pay-TV proves that the Russian citizens are quite slowly getting accustomed to the necessity to pay for TV of a higher quality. Nevertheless, the process is going on and its success is directly connected with the growth of Russian economy, the enhancement of living standards and with the social middle class consolidation,” Kot said.