First came oil. Now comes space. Flush with energy revenues, Officials in Baku are intent on launching Azerbaijan's first satellite by 2011.
The government sees getting into the satellite communications sector as a way to diversify Azerbaijan's hydrocarbons-based economy. But some local critics are expressing doubt about whether Azerbaijan has technological muscle to compete in the global satellite market.
An American defense contractor, the Dulles, Virginia-based Orbital Sciences Corp., has undertaken to manufacture AzerSat, as the satellite is called, at a project cost of between $140 million-$160 million, the government states. Aside from military monitoring, intra-governmental and mobile telephone communications, the satellite will have television, radio and Internet broadcast capabilities, accessible in Europe and Central and Southeast Asia.
The government is entirely financing AzerSat, expected to launch by December 2011. Officials hope to recoup the outlay investment within six to seven years after the first launch, the Trend news agency quoted Communications and Information Technologies Minister Ali Abbasov as saying earlier in November.
Azerbaijan will use about 20 percent of AzerSat's capacity, according to Abbasov [no relation to this EurasiaNet reporter - ed]; the remainder will be leased to companies in Europe and Asia. The satellite is reportedly expected to have 16 transponders, devices used for sending and receiving radio signals.
A second satellite, to be financed by private investors, has also been mentioned, but with no concrete launch date. The government claims that Azerbaijan's total satellite capacity will reach 170 megabytes per second within the next 15 years.
The Ministry of Defense Industry's National Air Space Agency will handle receiving and processing satellite data, according to the government; a yet-to-be-formed state-owned company, tentatively titled AzerSpace, is expected to be responsible for maintaining the satellite itself.
"The development of the space industry is part of the government's plans to transform Azerbaijan's ICT [Information Communications Technologies] sector into the second largest priority after the oil-and-gas sector," Minister Abbasov told a November 11 news conference.
Azerbaijan has little previous experience in the aerospace industry. During the Soviet era, a few Azerbaijani plants produced equipment for the Soviet Union's space projects, but their facilities are now out-of-date.
How Azerbaijan will manage to develop a competitive satellite program by 2011 baffles one local economist. "The ICT and satellite technologies sectors are notable for really fast technological changes and modernization," commented Natig Jafarli, head of the Society of Azerbaijani Economic Bloggers. "Therefore, for small countries like Azerbaijan, it is very difficult to compete with the world's leaders in the satellite industry -- the United States, Russia, the United Kingdom, France, China, and India."
Although officials have talked about promoting Azerbaijan's ICT sector since 2006, "no special conditions for investors" have been set up and "no technological breakthroughs have been made so far," Jafarli said. Internet prices have declined over the last two years, but a tender for the use of 3G frequencies by mobile phone operators was announced only in September, he added.
So far, the scale of Azerbaijan's satellite program is expressed only in general terms. By 2013, the State Program on the Establishment and Development of the Space Industry in Azerbaijan foresees domestic manufacture of satellite parts and the training of "space industry management."
While pride in Azerbaijan's planned cosmic power is driving Baku's satellite program, profits play a role, too. The government's program overview notes that countries with satellite operations can earn $100 billion per year in revenues.
A senior official at the Ministry of Communications and Information Technologies told EurasiaNet that Baku has reached a preliminary agreement with companies in several countries, including Georgia and Moldova, which have expressed an interest in using AzerSat in the future. Domestic clients are expected to use "at least 60 percent" of the satellite's capacity in the first years following launch; the remaining 40 percent would be leased to foreign clients, said the official, who asked not to be named.
One local information technologies expert, however, warns that Azerbaijan may be in over its head.
"Azerbaijan does not have any experience in launching and managing satellites and a premature start of the project could result in huge financial losses," said Osman Gunduz, chairman of the Azerbaijan Internet Forum, a Baku-based information communications technology policy watchdog.
Kazakhstan last year lost a $60-million satellite launched with Russia's help; a $10 million satellite for Belarus exploded during its 2006 launch. "Azerbaijan should seriously research these experiences in order to avoid such failures," Gunduz said. A smaller and cheaper satellite than the one planned might be advisable, he added.
The Ministry of Communications and Information Technologies official responded that the government has made note of these mishaps.
"We are, of course, preparing seriously to avoid any possible failure," he said. "It is one of the reasons why the actual launch of AzerSat is postponed until December 2011."
Gunduz also took issue with the emphasis on satellites for developing Azerbaijan's IT sector. "Small countries . . . develop their fiber-optic infrastructure" as a "cheaper and less risky" option, he said.
The Communications Ministry official argued that Azerbaijan's in-the-works fiber-optics network can coexist with satellites. "[T]he country will also benefit a lot from the launch of a satellite," he said. "One should not replace the other."
Minister Abbasov remains similarly confident in Azerbaijan's future in outer space: "The space industry will be established in Azerbaijan and the satellite will be launched," he said.