5 may 2009

Prime Minister Vladimir Putin met with Chairman of the AFK Sistema Board of Directors Vladimir Yevtushenkov

At the meeting, Vladimir Putin and Vladimir Yevtushenkov discussed the surface-based work on GLONASS (Global Navigation Satellite System) and the commercial aspect of its launching.

Transcript of the start of the meeting:

Vladimir Putin: How is it going?

Vladimir Yevtushenkov: Everything is going well, everything is normal.

Vladimir Putin: What about GLONASS? What about its ground-based infrastructure?

Vladimir Yevtushenkov: I'd like to tell you about it. As for satellites, we have fully completed this work. We now have full coverage.

As for the ground-based infrastrucutre, as you know, we have created a federal network operator that will render (and is already rendering) navigation services to all ministries, departments, and citizens on Russian territory. We have also obtained approval for this project from all ministries, which took us a long time. We are now waiting for the Government to issue an executive order, which is currently on your desk. The federal operator will service (and is already servicing) all departments.

In the Novosibirsk Region, we have practiced the rendering of comprehensive navigation services to all units of the Emergencies Ministry, local transportation, ambulances, and the police. We are now trying to extend these services to the rest of Russia. Nobody has any objections of principle; there were a great many details, but they were all sorted out. I believe we will launch these services in full this year and continue to develop them.

At this time, I'd like to say a few words about the commercial aspect. Needless to say, we should manufacture telephones, navigators and a lot of other equipment in order to both give a commercial gain to average customers and allow us to compete with the already produced GPS devices.

With this goal in mind, we have completed the work on the GLONASS-GPS chip in cooperation with Qualcomm, a recognized leader in this field. Starting at the end of this year, we will produce mobile phones with the GLONASS-GPS chip, hand-held satellite navigation systems for cars, etc.

This allows us to keep a very competitive price on these devices. Most important, they will soon be sold in retail stores. They are in no way inferior to those with the GPS chip, and will even be a little cheaper.

We would like to address the Government with a request to protect our market, like the Americans do. They have a law that prevents mobile telephones without a built-in GPS chip from entering the country. We should do the same. We should somehow encourage foreign producers of equipment and telephones to build the GLONASS-GPS chips into equipment supplied to Russia.

Vladimir Putin: It should be GLONASS. Let them deal with GPS in America.

Vladimir Yevtushenkov: Yоu know, we have made separate GLONASS chips as well, but we believe that the transition should be a little more gradual. We should work on GLONASS and GPS for a year, with the ultimate goal of switching completely to GLONASS. We have to do this because we must learn to do the coverage, which is rife with technical details. It goes without saying that GLONASS should be used for special purposes. As for commercial services, we should offer customers the right to choose, and make our GLONASS system more competitive.

Vladimir Putin: Why should we compel telephone producers to build in both systems?

Vladimir Yevtushenkov: Yоu know, switching exclusively to GLONASS is very easy. It is an absolutely simple technical task. Initially, we did not even know whether we would be able to secure full satellite coverage. Technologically, this was a long process. Now that we are confident that GLONASS has made it, I will tell you honestly that we do not see any problem in switching fully to GLONASS.

We simply need a technically small period of time, and we will make it.

I think that GLONASS will become a commercial project in 2010 because we are currently still involved in all kinds of developments. Any customer, not to mention federal bodies or commercial agencies, will be able to use these services. I think they will be very much in demand. They are already in demand on Russian territory, but via GPS for the time being. In the future, they will be in demand via GLONASS.

This is a short account of how we are finishing our work on GLONASS. Although the market situation has not been very easy, we have not delayed any of our plans for its development. We have covered a lot of ground technically and technologically. In practice, this work proved to be very difficult. Some of the things that seemed simple to us initially proved to be a real technological challenge.

Vladimir Putin: Have you failed to smooth out contacts with your European partners?

Vladimir Yevtushenkov: They have slackened their pace because of the crisis. We have working contacts with them, and we know all the people engaged in the project-but their system will not be ready before 2014-2015.

Vladimir Putin: They have launched only one satellite, while Russia has launched 20.

Vladimir Yevtushenkov: Regrettably, they have put the system on the backburner. Some proposals do come from them, but we have nothing to offer them in terms of pooling-in, because they have launched only one satellite and suspended all other launches. Their base configuration also has ample room for progress.

We also have contacts with China, which is also launching a satellite fleet of the Beidou type.

Vladimir Putin: Yes.

Vladimir Yevtushenkov: They are launching their own fleet, and are anxious to do it single-handedly. I think the Chinese will cope-the work is in full swing.

Vladimir Putin: They don't want any partners.

Vladimir Yevtushenkov: That's right-no partners at all.

Vladimir Putin: As for Europeans, I think it is possible to begin a partnership with them, especially after they pushed back the deadline.

Vladimir Yevtushenkov: So you think it is possible to produce microchips together?

Vladimir Putin: Yes.

Vladimir Yevtushenkov: I also think it is possible. It's no problem even if they start launches in 2015. Time flies, and they initiated contact with us, after all.

They wanted to do everything together with Russia-but when we made our talks more profound, we saw that their desire to join hands was not so great.

Vladimir Putin: Are they less interested than they appeared to be?

Vladimir Yevtushenkov: There is no great interest-but if a relevant decision is made they will need 4 billion Euros immediately. They are all waiting for the decision to fund the project.

Vladimir Putin: It is unlikely to come soon, considering the present situation.

Vladimir Yevtushenkov: If they don't get the money, the job will proceed at a slow pace. We can only regret that there is no opportunity for joint projects yet.