Good, but…

Notwithstanding the fact that the recently announced TRAI
recommendations for VSAT services have failed to do away with the restrictive
nature of the regulations, they are being seen as a positive step however, it
still remains to be seen, if the recommendations get the elusive nod from DoT.
In case they are accepted, the VSAT services will certainly benefit and so will
their users.

A More Business-friendly Regime

As against the abnormally high license-fee of Rs 50,000 per
VSAT that exists today, TRAI has made an effort to introduce a business-friendly
regime. It has come up with a new license fee structure that would entail lower
fees for service providers, as they install more VSATs. The new recommendations
have also pushed for a zero license fee regime. This will certainly entail a
lower usage charge, ultimately benefiting the users. However, the 25 percent
discount for an inclined orbit operation would not mean much — as most of the
existing service providers do not favour the use of inclined orbit operations.
This discount has more to do with TRAI’s perception that service providers
need to be encouraged to do so, "for efficient use of satellite transponder
space".

For service providers, this would mean a new lease of life,
as the falling leased-line prices and their growing availability had troubled
them. "The fee is still on the higher side, but still lower than the
existing Rs 50,000", remarks an official associated with a top service
provider. Claiming that the growth of industry is hampered by the license fee,
Mr. Sanjiv Mital, CEO, Bharti BT, urges that there should not be any license fee
at all. "For any other infrastructure like DSL, this kind of fee is not
levied. We feel that satellite communications should also enjoy the same
benefits," he asserted. According to Mital, a significant impact on the
industry once the recommendations are approved and accepted, would be–there
will be no license fee for ‘receive-only’ terminals. TRAI is of the view
that the use of receive-only VSATs needs to be encouraged, in order to reduce
the costs of distance education, dissemination of news and important messages,
document delivery, tele-medicine and other public services.

Bandwidth Cap Increases

The good news here is that the TRAI has recommended the
removal of 64 Kbps barrier on data-traffic speed, in favour of 512 Kbps. If
accepted, this would allow the use of VSAT networks to run bandwidth-hungry
applications–which are not possible now, because of the 64 Kbps barrier.
However, the problem here is that this recommendation comes with a rider. The
service providers will have to pay a higher fee, as they go up the speed ladder.
It is suggested that for speeds up to 64-128 Kbps, the fee should be Rs 10,000,
for 128-384 Kbps it should be Rs 20,000 and for 384-512 Kbps, it should be Rs
50,000. "The new TRAI recommendation has softened the blow, but there are
still restrictions. Why should you decide that it should be 512 Kbps? Why is
there no such cap for the terrestrial networks?" asks Feroz Khan, country
manager, India and South East Asia, Viasat Satellite Networks, urging in favour
of removal of all bandwidth caps. Emphasizes Mital, "We feel that with the
new need of offering broadband solutions, there should not be any limitation of
capability nature. Customers should be free to use any amount of capacity, as
per their requirement".

Even though I V Rajesh, general manager, satellite services,
HCL Comnet Systems and Services Ltd., welcomes the intention to raise the cap,
he finds the idea of incremental surcharge for higher bandwidth speeds
unreasonable. "This would be a constraint on bandwidth expansion,
especially in case of TDM/TDMA networks — as bandwidth there is shared as a
common pool," he observes. Rajesh, however, has no objection for such a
surcharge on PAMA networks. P S Mankad, CEO, Telstra Vcomm says, " The
surcharge on the speed, needs to be looked into as it is very high and can slow
down growth".

Besides opening VSATs for high bandwidth applications, the
removal of the 64 Kbps barrier can also aid in the entry of new service
providers. This is because many found the barrier, among other things, too
suffocating to start operations in India. Take for example, the case of Maksat
Communications Pvt. Ltd. Maksat, a Russian Satellite Communications Company,
promoted venture and had entered India in 1998 with the purpose of offering VSAT
services, but found the regulations, including the bandwidth cap, too
restrictive. "Allowing a speed of up to 512 Kbps, would open up the market
for high speed communication, encouraging companies like us to start VSAT
operations", says Tarun Malhotra,

director, Maksat.

Wider Interconnectivity

The new TRAI recommendations suggest not only relaxation of
CUG interconnectivity rules — by allowing different user groups sharing common
interests or in the same business to connect to each other, but, is also
positive on other interconnectivity issues. The relaxation of CUG norms could
prove useful for users with common interests as they can share resources,
thereby bringing down capital and usage costs.

The biggest regulatory hurdle affecting growth in the
industry, is the restriction on interconnection with ISPs, PSTN networks and
other service providers. VSAT service providers consider this the most
unreasonable of all the regulations — as this does not allow users to go in
for mixing the different media. This, in turn, creates problems for users, who
would prefer going for a different media depending upon costs and availability.
The new TRAI recommendations, if accepted, would take care of this view to a
great extent, by allowing interconnection with different terrestrial data lines,
including the Internet leased by customers of VSATs, provided they are not
connected to the PSTN network. However, TRAI is of the view that permission for
free interconnection with other networks, would have implications for other
telecom service licenses that have been issued or are under issue.

Even though these recommendations have left VSAT service
providers clamouring for more, they do accept that TRAI has taken a step in the
right direction. They foresee a new vitality in the VSAT industry and also
benefits for the users, if the government notifies these recommendations.

Ravi Shekhar Pandey