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Teletimes: Oversupply of satellite capacity is now a serious issue

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Chief editor Khalid Athar spoke with Andrey Kirillovich, RSCC Director of integration services and projects


RSCC celebrated its 50 years this year – Please share your feelings on the completion of this milestone and how the company has evolved and achieved success throughout this journey?

After pioneering the space age in 1957 with Sputnik (first artificial object sent into space by humankind) and first man in space in 1961, both events being a great breakthrough for the world science and technology, Russia started to apply the benefits of satellites for the country’s development. This included satellite TV distribution, when an analogue TV signal of national TV program was broadcasted live from Moscow to Siberia and Far East of Russia for more than 8 thousand kilometers. This is how RSCC was established in the end of 1967, utilizing a High Elliptical Orbit satellite called “Molniya” and an uplink earth station in Moscow, serving the world first satellite TV distribution network to FTA towers.

Throughout these 50 years ГП КС has evolved from a small teleport facility at the early days of satcoms to a world class satellite operator and service provider. This five decades journey was not easy, as RSCC has suffered from the launch failures, satellite malfunctions and demand fluctuations, but we have stepped into the second 50 years period as very successful company with a good position   on the market and strong value proposition to our customers.  As of today we are operating 12 GEO satellites in C, Ku, L and Ka bands, 5 Teleports, and providing full range of satellite communications and broadcasting services to customers in more than 50 countries of the world.

 

The Satellite industry was troubled in 2016, how has RSCC managed to grow revenues by 23.7%?  What unique services are RSCC offering?

 

Oversupply of satellite capacity is now a serious issue in almost all regions of the world. RSCC has done a great job recently in total renewal of its orbital fleet, when we launched 7 new satellites in the period of 24 months.  So one part of our success is new birds with updated and enhanced footprints tailored to specific markets and applications. The other parts are: a) expansion to new geographical regions (Sub-Saharan Africa, Latin America and South Asia), b) enhancement of operations in traditional markets (Russia & Central Asia, Europe and MENA), c) expanding vertically  (proprietary Maritime service offering), and d) creating new markets (satellite consumer broadband in Russia).   Besides that, for most profitable and high demand orbital slots we have added Extended and even Planned band capacity (Appendix 30B). This was a great help to our current data customers willing to expand their networks with minimum investment on ground by using this capacity for downstream carriers. We have also opened a new video neighborhood in 140E, so now RSCC with 3 video hot spots is the best one stop shopping point for any video content provider willing to have access to almost all TV viewers in Russia. Our video neighborhood at 56E for Middle East broadcasters has been also developing quite well, offering TV channels from Middle East a convenient tool for distribution to regional cable headends. Data applications also occupy a large part of our satellite capacity, and we have got a number of long term customers, who are growing their business in corporate VSAT and backhaul together with RSCC expanding the bandwidth offering all over the world.

 

How has the year 2017 been so far for RSCC?

Like for the rest of the industry every next year becomes tougher than the previous one due to increased pressure from competitors and terrestrial solutions. But RSCC has got a very well-balanced portfolio of video, data, domestic and international customers. Video applications will be bread and butter for GEO satellite in the near future, and as mentioned before, we have opened another video hot spot, 3-d one in total.  RSCC has also strengthen its position on primary domestic market – Russia, where it is satellite operator No.1 holding around 70% of the market. International sales have been also playing a significant role in RSCC business reaching 40% share in total revenues of the company. A steady growing successful business has brought RSCC into the list of Top 10 Russian telecom operators this year.

Which areas (both geographical and industry verticals) do you see as most profitable for RSCC in the coming future? 

Our approach combines enhancement of activities at traditional international markets, further expansion to new regions (Latin America and Asia) and more vertically integrated business at domestic market. Vertical markets where RSCC is acting as a fully established service provider are: Maritime communications, Video distribution, Cellular Backhaul and Enterprise VSAT. We are planning to expand our current expertise to international markets and Middle East is one of the first to benefit from this. Being a long term vital player at Middle East satellite market, RSCC plans to strengthen its position by forming new partnerships with vertical service providers and by expanding video platforms across the region: from Pakistan to Morocco and further to Europe.

How do you see the Middle East market for your services? How has the market evolved over the past years?

Middle East was one of the first international markets our company entered to 20 years ago providing connectivity for data networks and broadcasting channels between Europe and the region. Since then the market has strongly matured with more traffic and content generated and staying inside the region. Various political, military and social activities, as well as heavy investments of many regional economies into infrastructure development, made satellite communications a vital part of regional connectivity during these two decades. Besides that, Middle East has been always generated a strong demand for satellite broadcasting, both distribution and contribution. I assume our video business in MENA region is the second largest after domestic one in Russia.  RSCC currently provides a seamless connectivity from Europe across Mediterranean Sea to North Africa, and further to the East from Turkey up to Pakistan. Region is well covered in Ku-band from western (14W and 11W) and eastern positions (40E, 53E).

 

Moving in to 2018, do you have any plans for any new satellite or any changes coming in terms of strategy?

We have already made a total renewal of our satellite fleet a couple of years ago and most of our primary satellites over Europe, Middle East and Africa are in the early years of the lifetime. There are two satellites under construction right now – Express - 80 and Express -103, which are a planned renewal scheduled for launch in next few years to traditional orbital slots providing coverage over Russia.

Would you like to comment on Teletimes International that is the only tri-regional magazine focused towards satellite communication, ICT and Telecom in the Middle East, Asia and Africa?

I assume this is a good multiple regions approach, but you should not stop on this.  It is worth moving further by adding a LatAm edition, as many of contributors to your magazine and readers, including companies from Middle East, are doing or planning to do business in Latin America. RSCC is using the same approach. First, it helps to diversify business risks geographically. And second, it allows your customers to grow their business together with the satellite operators to new regions and continents. A few of our long-term customers started as European satellite service providers, then expanded to Middle East, and further to Africa, Asia and Latin America. All with the help of RSCC satellites.

Interview of Dr. Andrey Kirillovich in January 2018 issue, Teletimes International 

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