By Julia Ioffe, contributor

Late last month Moscow celebrated the birthday of Father Frost, the Russian iteration of Santa Claus, with a new-fangled announcement: Father Frost’s retinue would move through the holiday skies aided by Glonass, the Russian answer to GPS.

Eagerly waiting children could track his movement online, while he could simultaneously improve his gift-giving efficiency. “Now Father Frost can be sure,” his press release said. “He can monitor his helpers through the Internet, even when he himself leaves for another city.”

It is unclear, however, how well Glonass will be able to aid Team Frost. The Glonass network (much like America’s Global Positioning System, a Cold War defense and missile-tracking system that was eventually opened to civilian use) was envisioned as an equal competitor to its U.S. counterpart.

But Glossnass recently has suffered some technical setbacks.

Here’s why: For complete coverage of the earth’s surface, Glonass, which stands for Global Navigation Satellite System, requires 24 satellites evenly distributed among three orbital planes. This includes three in-orbit spares – one per plane – in case anything goes wrong.

Russian “birds” fall flat

Currently, however, there are only 19 in orbit and just 15 of them are operational. (Three broke down just around the time of the war in Ossetia, in 2008, and, last week, the Russian space agency announced it was taking yet another satellite out of commission for technical reasons.) And because 18 operational satellites are needed for 100% coverage of Russian territory, the current Glonass configuration falls just short of that milestone, too, providing spotty coverage even at home. Coverage around the world is still more fractured and unreliable.

This, of course, makes it hard for Glonass to compete with the GPS system, which is fully operational and has nearly spotless coverage almost everywhere in the world.

In the system’s early years — when the Soviet space mission and the Cold War arms race were in full throttle — almost 50 satellites of various quality and life-span were lobbed into space. By the time the Soviet Union collapsed, however, there were still only 12 functional satellites in orbit.

The system was briefly operational in the mid-1990s, but quickly fell into disrepair as the Russian economy spun out of control and budget revenues plummeted. Meanwhile, the GPS system, developed for American military use, was made available to the public free of charge in 1993, without any major setbacks.

Then in 2001, a young and energetic new president, Vladimir Putin, sought to revive Glonass.

Putin’s pet project?

The project’s rebirth came just as the consumer GPS market was taking off and was tinged with both geopolitical and nationalistic considerations, not all of which made sense. On one hand, it was perfectly rational for Russia to not want to rely on the United States – an wary ally at best — for its military navigation systems.

And Russia was not the only country trying to wean itself off its American satellite dependency. At the time, China and Europe were working on similar GPS analogs. Europe later froze the development of its system, Galileo, because it didn’t seem profitable, but China and Russia, two countries capable of pouring vast sums of money into giant state ventures, plowed ahead.

Putin made Glonass his pet project, insisting that he wanted a system that could compete with GPS on an equal footing. For this he brought out the big guns. Legislative projects were launched that would require all government vehicles to have Glonass compatible systems.  Parliament proposed tariffs on imports of GPS devices to encourage Glonass’s development at home.

And, in the oil-boom years, money was no object: The Kremlin allocated almost half a billion dollars to Glonass in 2006-2007, and, in 2008, Putin pledged even more. That year, he alloted an additional $2.6 billion, promising two big three-satellite launches in September and December 2009.

And then reality intervened.

In addition to those dud satellites whirling around space, the three satellites scheduled to be launched in September were found to have an unspecified “malfunction.” Still, Putin, now prime minister, came out on September 28 and publicly charged one of his deputies to make sure all six made it into space “by the end of this year.” But, less than a month later, the three satellites scheduled to be launched in December went back to the manufacturer. It is now December, and not one of the six satellites scheduled to be launched before the new year will make it up there on time.

And so Glonass hobbles on with 15 satellites, a full nine satellites short of the number needed for 100% worldwide coverage. This, of course, has forced a subtle shift in the Kremlin’s rhetoric. While Putin and current President Dmitry Medvedev continue to insist on an impeccable satellite navigation system in the near future, the point now, they say, is to compliment, rather than compete with, the GPS system. Two systems, they argue, are better than one. “Undoubtedly, GPS provides much better service,” says Sergey Filipov, a spokesman for Sitronics, which partners with the government in developing microchips for Glonass-reading devices. “We’re not trying to compete. The thinking is that it should be a double system.”

Experts suggest that this is in fact the case: the more satellites are in view of a navigation device equipped to read both GPS and Glonass signals, the more accurately it can pinpoint location and avoid blocks like trees or skyscrapers.

And Russia’s navigation project received a shot in the arm recently when India joined the project and agreed to pay for one satellite launch.

Where are the cool phones and gadgets?

But Glonass still faces an uphill battle. Not only are there too few satellites to provide reliable service, but Glonass devices are still in the earliest stages of development. In a country full of the most elaborately conspicuous cell phones, there are no mobile devices with Glonass readers.

The Glonass handheld market is equally underdeveloped.  They are not user-friendly, and are bulky and far more expensive than their GPS counterparts.

Nor are foreign satellite navigation companies jumping into the Glonass market. Some make specialized agricultural equipment that can read both GPS and Glonass signals, but Garmin, (GRMN) the largest producer of consumer GPS devices, still does not make a dual-signal device. “Since Glonass isn’t fully functional yet, it’s too early to say if our current production handhelds will be compatible,” says a company spokesman. (Garmin controls some 60% of the North American market.)

“Will the system be realized, or not? That’s the big question,” says Anna Lepetukhina, a technology analyst with Troika Dialog. “Sooner or later, we’ll see it used more in the military-industrial sector. Will we see a large consumer market for Glonass? Probably not.”

But this has not stopped Putin from trumpeting whatever small successes Glonass offers. According to one of Putin’s deputies, Glonass has made police work easier and has even helped Russian police departments save on gas because police chiefs can keep a close eye on their ranks. Now, Putin joked, officers “have to visit their girlfriends on the bus now and not in official cars.”