http://www.izvestia.ru/news/508997
This is the best view on situation I've read so far!
Rought translation (with some sections ommited):
Every mission has three parameters: complexity, resources and risks. If we ask someone to send a complicated mission with little risk, it will involve huge resource. If you plan to send a mission to Mars in such a way, you would first test hardware on Earth orbit, then Lunar orbit, then model all aspects of the target mission. With F-G situation was a bit different - we did not fly to other planets for 25 years. There was a huge amount of new hardware without flight history. Practically only fuel tanks from Fregate were previously flown.
Project itself was very complex, with a large number of instruments and many algorithms.
Maximum complexity and minimum resources translated to maximum risks.
It was decided the risk is ok to fly F-G. Apparently we stumbled right in the beginning of the flight. F-G flew well for two hours after the launch. It turned itself on, extended elements (solar panels), orientated to Sun and began to receive energy. It turned on all required hardware, and Chinese satellite. It was all confirmed by telemetry. And then... it flew out of Russian zone of communication. Burn did not happen.
Our communication stations are designed for deep space and could not track fast-moving object in low orbit long enough to complete long link establishment procedures.
In the beginning we could not target the satellite. It was tracked only by ground means, and position was inaccurate, calculated up to 6 degrees. That's why us, and European stations had to add modified antennas emiting wide beams. As a result we had a few sessions and received some telemetry.
It said that radio module works, link with onboard computer is up. Photos of on-orbit F-G showed that it was not tumbling, meaning Sun orientation module worked correctly.
We do not know when and why burn sequence was aborted. There could be many hypothesis, but fact is only one: F-G is Sun-orientated, onboard computer fulfills its function.
Logic says that when sequence is aborted, F-G will await commands from ground. Apparently it is still in that mode and we will continue attempts to make it alive.
As for the failure, there are many possibilities. For example it could be a programming error that could not be detected during modelling on Earth. Difference between model and real situation could be large enough to "stupify" computer.
It could have also been a hardware problem. Before we lost contact with F-G we enabled power to several modules, and theoretically damage during launch (?) might have caused problems with power supply.
But those are all working versions, official reason should be established by appropriate commission.
As far as we know the rocket worked nominally. However we think that launcher should have been chosen differently, not Zenit, but Proton, which could take F-G directly to required orbit. Then F-G could be turned on and verified module by module, new comms line would be tested, and trajectory corrections made.
Decision about launcher was taken in 90s, and project was based on that.
F-G was a sort of jumping forward (cavalry charge?) over 25 years gap. It was understood that risk was high, but imagine if it were a success! However it is necessary to work step by step, systematically. That's why we should go back to Lunar exploartion.
....
I would not get fixated on F-G. We have many projects. This year we launched Electro-L, a new generation sat. Our Fregat boosters have done their job on 8 launches from 3 locations, with one more launch from each location by end of this year.