Segment Analysis of Data Services: VSAT and its Decent Growth

VSAT is one of the few service segments in the Indian telecom which continues to exhibit decent growth. The reasons behind this growth are rapid proliferation of data services within enterprises as the Digitalisation of organisations and businesses continues.

Other than major cities in the country, the other alternatives to connectivity are very limited, giving VSAT an edge over them. Growth in retail, telecom, defence, banking and a few more segments has pushed the demand for a VSAT service.

FY 2017-18 saw on an average 17% growth in the business in terms of service revenues.

Current Challenges

The maturity of cellular networks as well as ability to deliver high speeds with reducing data per GB cost, is a potential competitor to the VSAT services. At the same time, rolling out of fibre to the premise is also enabling wired last mile connectivity capable of high through puts. But, even in such cases, the redundancy preference shall continue to be VSAT.

Future Opportunities

As opportunities like Smart Cities as well as use cases out of Digital India and other such missions ripen, VSAT is going to see more business coming its way. Similarly, in other IoT deployments, it shall have its pie too. With the segment being served by very few players, each one of them is going to see a good growth rate in coming years and there might also not be realignments by way of M&A and exits.