View From the Top: Yuri Prokhorov, Director-General, RSCC
[Via Satellite 02-16-2016] Russian Satellite Communications Company (RSCC) had a busy year in 2015, having launched new satellites that brought the company to new international markets while simultaneously ramping up available capacity to Russia. With the launches of Express AM8 in September 2015, and Express AMU1 in December that same year, the company branched out into Latin America, Sub-Saharan Africa and South Asia. RSCC also increased new Ka-band services and began offering more services for broadband, corporate communications, Comms-On-The-Move (COTM) and broadcasting.
The Russian economy has had some well-publicized struggles, which did impact RSCC, as have launch failures with the Proton rocket. However RSCC continues to grow and expand. More recently, the company has begun considering satellites in High Elliptical Orbits (HEO). In an interview with Via Satellite, Yuri Prokhorov, director general at RSCC discussed the company’s recent investments, market strategies and goals going forward.
Via Satellite: RSCC signed new partnerships with RSC Energia in 2015 and had new talks with China Great Wall Industry Corporation in 2014. Should we expect to see more partnerships, both domestic and international, from RSCC this year?
Prokhorov: In accordance with the Russian Federation legislation, RSCC is purchasing space equipment under the transparent tender procedures — any manufacturer may participate in RSCC tenders and we demonstrate an open policy in terms of building perspective schemes of cooperation. This year we are planning to launch some open tenders aimed at both developing the ground infrastructure and manufacturing new satellites.
Up to 2020, Russian manufacturers will play a key role in RSCC business modeling since the perspective satellites are going to be used for state programs and projects, including the television and radio broadcasting. However, we are confident that the Russian industry will organize their work in cooperation with foreign manufacturers, like they used to do before.
In October 2015, RSCC signed the agreement with United Rocket and Space Corporation. As a matter of principle, this document outlines one contractor while implementing some complex projects aimed at manufacturing, launch and commissioning of satellites for civil purposes on the geostationary orbit. Taking into account the plans to improve quality, economic viability and competitiveness of Russian space equipment and satellite services, both RSCC and United Rocket and Space Corporation consider this work to be highly forward-looking.
Via Satellite: At Satcomrus, you discussed using satellites in HEO. There has been a lot of talk about Non-Geosynchronous (NGSO) constellations recently. What advantage does RSCC potentially gain from HEOs?
Prokhorov: In order to develop broadcasting, fixed and mobile satellite communications, RSCC is planning to launch four satellites on the highly elliptical Tundra orbit which would enable us to deliver services everywhere in Russia, including territories above 70 degrees north.
The principal feature of a HEO is that the elevation angle to the satellite remains high, not less than 40 degrees from any point on the territory of the Russian Federation, including the Arctic Region. This could enable a satellite communications system that effectively solves the shadowing problem. The size of the ground terminals will be 0.4 to 0.6 meters.
It’s not yet definite whether RSCC is going to implement this project. At the moment, our specialists are developing the technical design of the prospective HEO satellites and analyzing the investment case. We are expecting to estimate the technical and financial aspects of this project by the end of 2016.
Via Satellite: What potential do you see for High Throughput Satellites (HTS)? Will RSCC invest in more HTS systems?
Prokhorov: RSCC marked the benefits of this new satellite technology and applied it in Ka-band on two satellites, Express AM5 at 140 degrees east, and Express AM6 at 53 degrees east launched in 2013 and 2014, respectively. We put into use the Network Operation Center (NOC) and gateway stations. At the moment, RSCC and some operators are working together on developing the system of customer terminals. Additional capacity will be provided on the highly populated European part of Russia from the Express AMU1 satellite, which integrates 18 beams in Ka-band.
Based on our evaluation of the perspective demand for satellite broadband services and the potential changes in the customer pool, we can say that the available capacity will quite satisfy the demand in the near future, therefore RSCC does not plan to launch some other satellites for the purposes of consumer broadband.
HTS could as well be used for supporting traffic channels in cellular backhaul solutions, namely new LTE networks and much-anticipated 5G networks. In Russia these networks are successfully developed with traditional satellites thanks to the vast throughput potential of the in-orbit fleet.
Another HTS application is the connection with ground stations on moving objects via Fixed Satellite Service (FSS) satellites. The latest trend in reducing antenna diameter brings a higher energy potential of the radio link, speaking of which, narrow beams appear as highly effective means of addressing this challenge. Getting HEO-based satellites, we can guarantee the elevation angle suitable to keep good coverage in Russian high-latitude regions. In this regard, RSCC is currently studying some key issues of building the communications system with HEO satellites that can as well be used for mobile connectivity and live audio broadcasting. The satellites are expected to provide multi-beam coverage of the Russian territory in Ku-band with steerable antennas. With certain reservations, such satellites might be considered HTS-class.
Via Satellite: The ruble has weakened in value compared to other international currencies in recent years. How has this impacted RSCC? What have you done to overcome this challenge?
Prokhorov: Putting new satellites into the operation in 2015 coincided with the significant fluctuations in the rates of the national currency. In this situation RSCC decided to keep its ruble-denominated tariffs in order to support our customers’ business. The decision brought us a number of clients that transferred their traffic from the other operators’ satellites to work from the RSCC fleet. As a result of this policy, RSCC revenue increased by 21 percent up to 9.2 billion rubles ($118.2 million).
In order to diversify the company business, we keep on increasing the spectrum of our services in the international markets. As of today, RSCC is operating in all major regional markets, and 41.5 percent of our revenue comes from the foreign customers.
However, following the results of 2015, the amount of net profit will be lower than expected. Like in 2014, this figure is greatly influenced by the exchange differences arising from the revaluation of assets and liabilities which are denominated in foreign currency.
Via Satellite: How much of RSCC’s satellite services are dedicated to Russia? What are the main drivers of growth in RSCC’s domestic market?
Prokhorov: RSCC is selling 63.7 percent of its satellite capacity to domestic consumers. The main drivers of growth are linear communications channels for mobile and terrestrial telecommunication operators, some government applications, satellite broadband solutions in Ka-band are gradually gathering pace, and certainly television and radio broadcasting. In 2015 the total capacity that RSCC made available to the Russian mobile operators increased by five times.
RSCC successfully completed the Federal Action Program “The development of television and radio broadcasting in the Russian Federation for 2009 to 2018” under which publicly accessible television and radio programs shall be delivered in five broadcasting areas of our country. That covers 98 percent of Russia’s population. We continued to develop two other segments of TV and radio broadcasting in Russia, i.e. direct broadcasting and distribution to cable networks using RSCC’s technological platform. The number of TV-channels delivered via RSCC’s technological platform for broadcasters doubled in the last year.
Via Satellite: Beyond new spacecraft, what investments is RSCC pursuing with ground segment infrastructure?
Prokhorov: The development of ground infrastructure is of key importance in building RSCC policy. Today RSCC is operating five teleports in Russia with almost 190 transmitting/receiving ground-based stations for satellite communications. We are investing into reconstruction and building new lines in our own fiber optic communications network. DWDM network was developed in Central Russia. We are also delivering traffic exchange services via our own terrestrial media network and bringing integrated solutions including both the satellite and ground segments. RSCC upgraded its Technical Center for signal compression and multiplexing based in Moscow, thus we substantially increased the number of processed TV- and radio channels.
As you probably know, RSCC has got its own VSAT-network with central stations in the Moscow Region and in the Far East of Russia. We are developing traditional VSAT-services and the very promising area of maritime communications. As a result, we are taking a significant share of VSAT-market in Russia (about 10 percent).
In 2015, we put into the operation the east segment of RSCC system of broadband satellite access in Ka-band with the hub in the Far East (Khabarovsk), and this spring, we intend to put into the operation the west segment with its hub in the Moscow Region. Before the sharp fall of the national currency RSCC made some investments in the development of the ground infrastructure for Ka-band services, which allows us to work productively on promoting broadband services now.
In order to deliver high-quality satellite services, RSCC is particularly focused on the state of its ground-based satellite control complexes and the Automated System of Monitoring and Measurements. Besides, we develop our own software products and successfully deliver monitoring and control services to some other satellite operators.
Via Satellite: What are your top goals for RSCC in 2016?
Prokhorov: We are going to increase the amount of the delivered services focusing on value-added services and expanding our presence in foreign markets. In 2016 we intend to start some new Geostationary Orbit (GEO) projects aimed at manufacturing such satellites as Express 103, Express 80, Express AMU3, and Express AMU7.