Connectivity Services : Managed Connections

VoicenData Bureau
New Update

There is a huge opportunity for the players in connectivity services.

According to Gartner, despite slower IT services market growth projections in

the short-term, India and China will continue to be the fastest-growing IT

services markets in the region, growing by more than 17% during the next five

years. India's connectivity market is expected to be 24 bn in 2010-11.


In a turbulent economic scenario, when high quality services have to be

served with the right mix of cost optimization, the connectivity service

providers are focusing on mitigating customers' fears by selling their services

that ensure enhanced business adaptability, scalability and lower risk of


Cost is driving the trends here as well. Today, more and more multi-site

global companies are saving costs by outsourcing their network requirements to

the experts. Much more of this realization has come into being after the global

credit crisis. The continued focus on reducing costs and complexity, together

with the need to concentrate on their core competencies, has resulted in many

companies looking to outsource various aspects of the design, implementation and

management of their IT and telecom systems. This is how managed network services

have come in vogue.


Rural connectivity is the mission for all telcos, who believe their entry is

obstructed by innumerable challenges but there is a pot of gold to be dug from


Story till Now

A number of players are active in providing companies worldwide offer

solutions that enable them to network their offices within India and across the

globe. They provide them infrastructure to run business critical applications

and means to connect with their customers, vendors and employees. These services

include Internet, MPLS-VPN, domestic and international private leased circuits,

satellite services (VSAT), audio and video-conferencing, data center services,

managed network services, corporate value added services, EPBX, Centrex, contact

center solutions, toll free services, and mobile enterprise enabling solutions.

Voice over IP has reduced the voice communication cost drastically, making

the PC to PC call almost free. On the same network, video can also be available

leading to a concept of unified communications with data, voice and video

running on the same network.


A huge interest has been observed toward unified communications and

telepresence which provides ultra-high quality videoconferencing. Across the

board, companies with multi-site presence domestically and globally have taken a

call to embrace such services and technologies as they spend a lot of time and

capital on travel. From a business model standpoint, most of the enterprises are

opting for opex, and pay per use model.

The Ethernet Era

Many companies are at the moment providing services on TDM/TDMA, FTDMA,

MFTDMA, SCPC, DAMA and PAMA technologies in KU and C bands. They are looking at

upgrading their technologies to the latest available features to meet the

present day needs. But these traditional technologies are likely to be taken

over by TDMA mesh. Due to lower operational costs the TDMA mesh technology is

set to play a significant role in designing the solutions for the larger

bandwidth requirements. This in turn will give a boost to bandwidth-hungry


New developments that appear close on the horizon are the Ethernet and

Gigabit Ethernet technologies that are expected to make a major impact. These

will replace the traditional STM4, STM16 kind of TDM links. This will make the

networks much more optimized and flexible. MPLS-VPN has long been a last mile

solution for wireline networks, but in the near future a mass movement toward

wireless infrastructure and WiMax is likely to take off as the best-suited last

mile solution.


There are some specialized services on offer for non-core business of

enterprises. Service providers are offering innovative IT solutions on IP

platform (21CN).

Many players are now focusing on the next generation service oriented

architecture based on ITIL version 3 to manage the client IT infrastructure

including connectivity.

Experts panel

David Nishball, president enterprise services, Bharti Airtel

Sudhir Narang, MD, BT India

Kamal Nath
, country sales manager, India, HCL Comnet

PJ Nath, executive president, Sify Enterprise Service

Shailendra Badoni, COO, Datacraft


Vying for More

The demand is increasing from various industry verticals, and it provides

diversified growth. There is a higher acceptance of VSATs as a broadband access

medium by a much larger addressable market of SMEs that will provide additional

growth compared to the traditional enterprise and government segments. The

industry aims at touching 85,000 VSATs on the shared hub in FY 2008-09, and

1,000,000 VSATs in three years time.

Tips for CIOs
  • Know your network, analyze, plan and define reporting requirements
  • Take a first step to move to 'pay-per-use' models
  • Pick a service provider who understands and can integrate VSAT

    deployment with overall IT infrastructure
  • Implement reliable method of monitoring remote connectivity and

  • Evaluate your VSAT and terrestrial circuit bandwidths and

  • While planning for VSAT deployments set SLA expectations
  • Understand the maintenance and operating cost
  • Other factors to be considered are reliability, feasibility, capacity,

    and connectivity etc
  • Consider network outsourcing
  • Wireless is a good last mile option
  • Shift IT spending from capital to operating expense

Though the per MB cost of connectivity has come down, the requirement of

secure and reliable solutions is not yet accomplished. Enterprises are always

demanding improvement in user application experience and prefer fully managed

and single SLAs by service providers.


Cost of services can be pruned by ensuring that the junk traffic is filtered

at the LAN level, while not crossing WAN. Hardware costs have already been on

the decline since the past few years.

Satellite bandwidth availability for VSAT has always raised concerns for

enterprises. Other regulatory constraints keep from exploiting the benefits of

VoIP to the fullest. Tough terrains and terrestrial infrastructure is yet

another challenge for this segment. VSATs continue to be the preferred media for

SCADA type applications that need relatively smaller bandwidth to operate.

Road to Rural

Rural India has come across as a significant growth driver and we will

continue to harness the power of telecom to trigger rural productivity. Rural

development initiatives like e-governance, e-health and e-education will receive

significant impetus once operators roll out 3G networks, facilitating high-speed

wireless broadband. There have been large scale-mission critical projects aimed

at empowering the rural populace. Due to cost and geographical limitations,

wireless technologies like WiMax and VSAT will play an important role in

improving rural connectivity.


Rural connectivity will lead to some interesting trends. Hybrid services that

combine more than one technology leading to cost effectiveness will be

excessively used. There will be growth in shared hub services model for

delivering services for VSAT service providers. There will be a need for

mission-critical backup connectivity for primary connectivity medium such as

leased lines and MPLS.

Once the rural road is opened to connectivity, small bandwidth and simple but

robust CPE (Customer Premise Equipment) will be in great demand. At present,

lack of enough volume traffic and poor RoI are big roadblocks.

Heena Jhingan