In June, Kazakhstan’s National Space Agency, KazCosmos, announced that it had lost contact with the nation’s first communications satellite, Kazsat 1. News coverage of this event to date has been minimal at best.

Built by Moscow-based Khrunichev Space Center and launched in mid-2006, the 850-kilogram Ku-band satellite carried an estimated price tag of $65 million and was intended to be the first of five Kazsat communications satellites.

Kazsat 1 had been designated as the platform for all Kazakh broadcasters, although only four of its 12 transponders are dedicated to TV services. The remaining eight were allocated for fixed services.

For Peter Kirstein, U.K.-based director of the SILK Project, which provides research and education networks in Central Asia with high-speed links to Europe, news of the Kazsat 1 loss is not welcome. His project involves work with research teams in several major Central Asian cites, including Kabul; Bishkek, Kyrgyzstan; Almaty, Kazakhstan; Dushanbe, Tajikistan; and Tashkent, Uzbekistan.

"This will exacerbate the current shortage. At the moment, the coverage in the region seems very spotty," says Kirstein, who reports that his project was unable to lease capacity on a single satellite in order to cover most of Kazakhstan, for example. "There were some cheaper domestic satellite offerings, but they may have been on KazSat 1. In any case they were not really interesting for bulk usage."

According to Kirstein, the cost of fiber remains very high in Central Asia, although this equation may change once new fiber projects are underway.

This loss "is most of all a significant blow to the prestige of the KazSat project and to Khrunichev — especially because both are closely associated with the highest level leadership in both countries," says Alexandros Petersen, an adjunct fellow in the Russia and Eurasia Program at the Center for Strategic and International Studies, a public policy research center in Washington, DC. "Presidents Vladimir Putin and Nursultan Nazarbayev both took a very public interest in the project. That said, the much-anticipated KazSat 2, due to be launched next year, will provide a chance for what you might call redemption."

Petersen expects that close cooperation between both governments will continue. "The KazSat project is one of national pride for Kazakhstan and in some ways for Russia as well in its self-appointed role as big brother to the region," he says.

But while the loss is common knowledge among users that depend on the spacecraft, of late June, Khabar TV, Kazakhstan’s state-owned TV channel and Kazsat 1’s anchor tenant, does not even mention the Kazsat 1 loss on its Web site.

"Since it is still unclear what exactly caused the failure, there will be a limit as to what Western observers on the outside will be able to glean about its significance," says Petersen.

How or if Kazakh-Russian relations will be impacted by the failure over time is anyone’s guess, at least for now.

"There will likely be a lot of finger-pointing and angry words among space technology and political officials on both sides, but it would be very surprising if those discussions ever became public," says Petersen.

Hopefully, Kazsat 2 will get Kazcosmos back on track next year. At the same time, any plans for Kazcosmos to emerge as a regional capacity provider face stiff and growing competition from several other new satellites which are starting to appear in the region. Turksat 3A was launched just after Kazsat 1 failed in early June, and in 2009, Intelsat 15 will replace Intelsat 709R and NSS-12 is scheduled to replace NSS-703 for SES New Skies.

While the presence of these new satellites will help meet the growing demand for capacity in Central Asia, Kazakhstan has some hard choices to make. Reaching out to satellite vendors other than the Russians represents a monumental shift for Kazakhstan, especially at a time when the Russians seem to be contemplating a possible total abandonment of the Baikonur launch complex by 2020, among other things.

Energy-rich Kazakhstan still has many satellite dreams, and in Kazakhstan’s capital of Astana, making those dreams a reality is not going to be an easy task.