Interview Via Satellite Magazine

Via Satellite asked Rashad Nabiyev, the Chairman & CEO of Azercosmos (Open Joint Stock Co) more about Azercosmos and its activity

 How was business for Azercosmos in 2015?

One of Azercosmos strategic targets for last year was to become the leader for satellite communications in Azerbaijan. For us, 2015 is the year when we became the exclusive satellite supplier to all TV channels in Azerbaijan and the year we rapidly grew the Occasional Video business in our domestic market, Georgia and Turkey. Most of our Azerspace-1 satellite is now commercialized and the customer base from over 16 countries include operators from Turkey, Russia, Georgia, UAE, Germany, UK, Ukraine, and others.

2015 is also the year we started the commercial operations for Azersky / Spot 6, a business cooperation with Airbus, Europe’s leader in Earth observation services.

 Azercosmos has telecommunications capacity over Europe, the Middle East, Central Asia and Africa. What trends are you seeing in these regions?

It is well known that there are wave of changes currently affecting the satellite sector. Technological progress is not only increasing the competition and generating shifts in consumption patterns, but also creating additional demand for satellite services. I am optimistic about opportunities for increased satellite usage in the Central Asian region, also in Maritime and Mobility sector that cuts across many regions. We now have HDTV channels on Azerspace-1, and in 2016 we plan to add more local TV channels not only from Azerbaijan but also from other Central Asian countries.

As a national satellite operator, how has the country of Azerbaijan benefited from your services? Can you give some specific examples?

 Azercosmos is Azerbaijan’s national project aimed to diversify the country’s economy through development of non-oil sector and making our company a data bridge between East and West. Today, this strategic target was achieved thanks to our visionary leadership provided by His Excellency President Ilham Aliyev.

Realization of Azercomos project not only enhanced Azerbaijan’s importance as a leading satellite player in Central Asia but also enabled all National TV and Radio channels to broadcast using our own satellite.

Azerspace-1 also enabled direct telecommunication links with Nakhchivan Autonomous Republic, a landlocked enclave of Azerbaijan where before communication was only possible through infrastructure belonging to other countries. Azerspace-1 provides mission critical operations that is now a favorable solution from national security standpoint.

In a previous interview (2012), you mentioned a small fleet of Earth observation satellites, including possibly in LEO. Is this something you are still pursuing?

In December 2014, Azercosmos signed a strategic cooperation agreement with Airbus Defense and Space taking over the rights to operate and commercialize SPOT 7 – a high resolution (1.5m imagery products) Earth observation satellite, previously launched on June 30, 2014. The satellite, renamed as Azersky, is used in a constellation with Airbus Defense and Space SPOT 6 giving both companies a strategic cooperation agreement.

The ground segment currently being constructed in Baku, Azerbaijan will allow Azercosmos to access images acquired from Pléiades 1A and 1B, another set of optical imagery products with 0.5m resolution that are currently commercialized by Airbus Defense and Space.

The combined acquisition capacity of Azersky and SPOT 6 is equal to six million square kilometers per day, and this means, every day, every point on the globe can be viewed in high-resolution.

Azercomos and Airbus Defense and Space combined satellite constellation opens up opportunities for many applications by providing the latest images within an unprecedented time frame.

Now that Azercosmos owns the Azersky Earth observation satellite what is your strategy for the remote sensing market?

With Azersky, our first high resolution Earth observation satellite, Azercosmos opened a new business filling the need for up to date imagery over Azerbaijan. Earth Observation is a new practice for our country, one that creates new applications and our goal is to intensively educate stakeholders within Azerbaijan on the advantages this brings to their business.

We are already cooperating with Ministry of Emergency Situations, State Aerogeodesy, State Committee on Property Issues, Ministry of Agriculture, Ministry of Ecology, State Oil Company, Azerbaijan National Academy of Sciences, Aviation Academy to help them unleash the full potential of satellite imagery. The applications include a wide range of fields such as defense, security, emergency response, agriculture, environmental protection, science, urban planning, and others. Azercosmos future strategy is to make the new available satellite imagery and associated value added products a key component in assessment, evaluation and planning for all Azerbaijan key holders engaged to date.

Our satellite imagery is available to commercialize in other Central Asian countries and we have started working on promoting the services and creating JV / partnerships to expand our capabilities beyond Azerbaijan borders.

Azerspace-2 is a joint satellite with Intelsat. What was your thought process behind the condo-sat approach? Might Azercosmos pursue similar partnerships in the future?

Azerspace-2 orbital position (45° E) is only 1 degree away from the current Azerspace-1 orbital location (46° E) creating good opportunities for existing and new customers to start expanding their current satellite solutions. The new satellite will be placed at the orbital position of 45 degrees east longitude, a position leased from Intelsat, which also acts like a lessee of satellite resources. The coverage area for Azerspace-2 was also a decision factor as it includes Azerbaijan, many European countries, Southeast Asia, Middle East and Africa. Telecommunications satellite market is now a very active market segment and once Azerspace-2 is operational and generating revenue Azercosmos is prepared to evaluate other mutually beneficial strategic partnerships.

What potential do you see for HTS? Could Azercosmos operate an HTS satellite one day?

 The World just wants more data, and HTS satellite is delivering this while driving the costs down. As consumers are moving from emailing and web browsing at home to sharing photos and video on demand this will drive data everywhere including remote locations where satellites are key to serve this market. While HTS are good fit for data applications, when it comes to video and DTH their competitive advantage over traditional satellites is fading. If you look at the HTS design, it becomes clear that is does not make sense to fill lots of spot beams with the same video channels. While Azercosmos is driving the business on all market segments, we don’t exclude the possibility of a partnership to own and operate an HTS satellite.

What would you describe as the biggest market vertical or new business opportunity for Azercosmos today?

 Traditional satellites have increased the number of Video channels and Azerspace-1 is no different than this. We consider Video to be our number one vertical market. As for the new business, we see complete solutions for Mobility and Government market segments a good 2016 opportunity, closely followed by corporate networks.

What ground segment advances is Azercosmos currently pursuing?

Our new satellite addition Azerspace-2 is driving new projects to upgrade and advance our ground infrastructure. As a satellite operator, we also see the need for partnership and the associated value it can provide. New business models are part of the picture, as we seek greater cost efficiency and better technology coming to market. Larger satellite operators are as convinced of the need to partner regional ones, as we are to partner them for HTS solutions. The new partnerships will change the ground infrastructure to enable full monitoring across networks. On Azersky, this year we will complete and start operating our own Digital Remote Station and Archive Storage for our customers.

What are your goals for Azercosmos in 2016?

Although our customers for Azersky and Azerspace-1 are different, we have for them common goals as revenue growth, expanding customer base, increasing fill factor and customer satisfaction. In 2016 our goals also include delivery of new value added products to Central Asia enabling Agriculture industry to take better decision. For Forestry, Water Management, and Monitoring, new image acquisitions and associated value added products will improve efficiencies to levels seen in more mature markets as Western Europe.

In 2016 we are continuing to supervise and assist our suppliers on the manufacturing of Azerspace-2 satellite that is due to enter service towards the end of 2017.