Alcatel Space has signed a contract worth between 50 million and 100 million euros ($53.6 million and $107.3 million) with Russian Satellite Communications Co. (RSCC) to supply the payloads for RSCC’s Express AM2 and AM3 communications satellites. The new satellites will carry 16 C-band transponders, 12 Ku-band transponders and one L-band transponder. The AM2 satellite will be positioned at 80 degrees East and the AM3 satellite at 145 degrees East.

RSCC has already pre-sold much of the capacity for both of these satellites. Xenia Drosdova, head of marketing at RSCC, told Interspace: “In terms of AM2, the 80 degrees East position is very good in terms of its coverage of the Russian Federation, so almost all of the capacity is sold on AM2. As regards AM3, we are having negotiations with different Russian operators located in the far eastern region of Russia, as well as the Asia Pacific region. We have sold some capacity. We estimate we have pre-sold 40 per cent of capacity for the AM3.”

The potential in the Russian market could offer more opportunities for Alcatel Space. Eric Lenseigne, the company’s vice president of sales for CIS (Commonwealth of Independent States), commented, “We believe there is very interesting potential in this market, which is not necessarily in the same cycle as the rest of the market. For us, this is very interesting because the overall situation is still quite poor in the satellite telecoms market. The Russian market is dynamic. The market is developing and there is a need for manufacturing satellites right now. They are developing their orbital infrastructure. Most of the major markets are not as dynamic at this time.”

The satellites will be used for communications networks employing VSAT technology across the territory of Russia, other CIS countries, the rest of Europe, Asia and Africa. Alcatel Space has now won seven of eight payloads ordered by Russia’s space programme. Lenseigne expects Alcatel Space will derive similar revenues from other CIS states this year.

The slow down in commercial orders in 2002 has put pressure on satellite manufacturers. The Russian market is particularly suited to satellites because of the outdated infrastructure and vast territorial expanse. A developing satellite broadband market in Russia could also offer opportunities for satellite orders. “The need for satellite is definitely there,” Lenseigne said, adding, “You just have to look at the way the country is structured geographically. The population is very widely spread across the country. Most of the population is on the west side, but there are also significant groups of population on the East side. The climatic conditions are also a factor. They have a cultural tradition of turning to satellites for solving their communications problems. Now with broadband coming, it is more natural for Russia than maybe other countries to look at satellite as a solution to provide broadband access. Clearly, satellite should be a component of their broadband strategy when they develop it.”

The Russian broadcasting market is also showing some interesting dynamics. “The sort of TV that will fuel the need for more transponders in Russia should be the development of regional TV. A number of projects are being developed to allow regional channels to broadcast over satellite. This is certainly an axis for development,” Lenseigne said.

Drosdova believes broadcasting will be the main focus for RSCC. “The basic focus for the company in 2003 will be in the broadcasting arena. There is a lot of demand from the regional TV companies. We are also going to increase our market in terms of ISPs. We think the telecoms market in Russia will be rather good in the next 12 months because the demand for communications services is still high in Russia. In Europe and the US, there may be a decline, but in Russia, there is a lot of demand.”

–Mark Holmes