Barring an unlikely mishap, Azerbaijan in February will become the latest developing nation with its own telecommunications satellite. With a population of just 9 million — about the same as Tokyo — the former Soviet republic might not appear to be the most obvious candidate nation for a commercial satellite operation. But under guidelines set by the government, the Azercosmos space agency, led by Chairman Rashad Nabiyev, has placed information and communications technologies, and specifically access by all Azeris to the global information grid, as a high priority.

Azercosmos has struck a deal with Malaysia’s successful satellite operator, Measat, to help close the business case, has secured financial backing from the French and U.S. export-credit agencies, and is already planning a second satellite after Azerspace-1, and an Earth observation satellite program as well.

Nabiyev spoke with SpaceNews reporter Peter B. de Selding.


Why does Azerbaijan want to develop its own telecommunications and Earth observation capacity instead of leasing/buying capacity or images on the commercial market?

One of the strategic projects carried out by the government of Azerbaijan, as a part of a wider plan of economic diversification and introduction to new industry fields, is the launch of a telecommunications satellite into orbit, Azerspace-1. Plans are already in place to launch a low Earth orbiting satellite in the near future and other telecommunications satellites in the upcoming years.

With a population of over 9 million and a terrain of mountains and plateaus — almost 60 percent of the country is mountainous — Azerbaijan has its own specific challenges in bringing connectivity to the people, especially to those residing in remote, mountainous areas. Our government has decided to address these challenges by harnessing space technology. The satellite will provide high-quality broadcast and telecommunication services and will eliminate the dependence on other satellite networks. Satellite connectivity will change the way in which the country obtains information.

It isn’t only a question of connectivity, though. It is a question of economic wealth. The development of communications infrastructure brings with it new economic prospects and opportunities. It opens doors of global marketplace, stimulates improvement of local education, and promotes overall development.


What are the technical details of the satellite — power, transponders and so on?

Azerspace/Africasat-1a will generate approximately 5 kilowatts of payload power for 36 active transponders. Azerspace-1 has 24 36-megahertz C-band and 12 36-megahertz Ku-band transponders that will provide services to Azerbaijan, Central Asia, Europe and Africa. It was manufactured by Orbital Sciences of the United States and will provide broadcasting and telecommunications services for government and corporate customers.


Azerspace-1 is a joint effort with Malaysia. How much capacity on the satellite do you have, and how much does Measat have?

Azerspace/Africasat-1a will be operated by Azercosmos OJSCo. at 46 degrees east, a slot that had been used by Measat and was given to Azercosmos for the satellite’s service life. Measat has secured enough transponder capacity on board to enable the company to serve the African market.

In general terms, the cooperation with Measat will support Azercosmos’ objectives of launching the first national satellite, which is to cover not only the territory of Azerbaijan, but also Central Asia and Europe. In the meantime, the Azeri satellite also supports Measat’s objectives to replace the Africasat-1 satellite, which is reaching its end of life. Measat is closely collaborating with Azercosmos in staff preparation, technical assistance as well as capacity-building measures.

Of the 24 C-band transponder capacity of Azerspace/Africasat-1a, Azercosmos has given 16 to Measat for the service life of the satellite. The remaining eight C-band and 12 Ku-band transponders are available for our commercial and government needs.


You said Azerbaijan will use 20 percent of the total for domestic demand. Is this equally divided between C- and Ku-band?

There is no exact division between bands as this percentage is the forecasted estimation for the national market. However, the percentage can be even greater than 20 percent depending on customers’ requirements in terms of band. We don’t expect an increase in this demand for the upcoming years; therefore we have concentrated on sales for the foreign markets in our coverage area.


Azerspace-1 is 40 percent full as it nears its launch. Who will be marketing the remaining available capacity — Measat, Azercosmos or both?

Unless it is commercialized, the benefit of the space project would remain underused. We expect to have our capacity leasing targets fully reached for the year 2013 after the start of operations of our satellite. Azercosmos will market the remaining capacity. However, we are working closely with Measat on a number of issues, and we will work to possibly develop a joint marketing and sales strategy for all of the C-band capacity.


How will you position Azercosmos in the market relative to other regional operators?

We will offer our services in neighboring countries with a competitive advantage that stems mainly from our flexible transaction costs and common language with the principal players in the regional markets. We will also focus on neglected emerging markets, which have not been attractive to industry giants.

We see ourselves as a reliable and responsible player in the global space market.


How much commercial satellite bandwidth does Azerbaijan currently purchase, and will this traffic transfer to Azerspace-1 when the contracts expire?

Today Azerbaijani communication companies lease the equivalent of two transponders. We are investigating possible opportunities to migrate current and potential local customers to Azerspace-1 space segment.


How much is the Azerspace-1 project costing the government? How long do you estimate it will take to generate revenue to recoup this cost?

Only 15 percent of the project was financed by the government. The rest was obtained through cooperation with banks. The overall project cost for the Azerspace-1 satellite is approximately $230 million. The project is expected to recoup its costs by the seventh year of operations.

Azercosmos was also able to secure a robust insurance coverage and highly competitive premium rate for Azerspace-1, the lowest in the satellite insurance market since 1999.


You have spoken about a second telecommunications satellite. Will you wait first to see how Azerspace-1 develops in the market, or will you proceed directly with a second telecommunications satellite?

Our company’s near-term priority is to ensure the financial success of Azerspace-1. That being said, our sustainability and success as a satellite operator will also depend on our ability to grow our business and offer additional capacity and services to meet the increasing demand in our region. We are proceeding with our plans for the second satellite, which will incorporate market feedback and lessons learned from our early commercial activities on Azerspace-1.


Will the second satellite also operate at 46 degrees east, or do you have access to another slot?

Negotiations between the Ministry of Communications and Information Technologies and International Telecommunication Union started some years ago for obtaining an independent orbital slot for Azerbaijan. They are continuing but we are also considering alternative slots that belong to existing satellite operators.


Ka-band for broadband for universal service obligations is getting popular for getting rural populations onto the Internet. Are you considering any Ka-band for your second satellite or is it too early to say?

The increasing presence of Ka-band systems for broadband access is very interesting to Azercosmos and cannot be ignored as we develop our plans for future satellites and services. How much Ka-band capacity we ultimately implement on the second satellite will naturally depend on the outcome of our market assessment and business planning exercises, but we can safely say that we are considering it for our second satellite.


You have spoken of an Earth observation satellite. What is the status of this program?

The applications of remote-sensing satellites in Azerbaijan have been studied in detail based on both local and foreign market research.

Consequently, the relevant work has commenced on building the satellite based on the existing demand and within the required technical parameters. Governmental assessments are continuing for choosing the winner of the bid on procurement of a low Earth orbit satellite.

Peter B. de Selding was the Paris Bureau Chief for SpaceNews.