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VSATs: Exploring New Skies

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VoicenData Bureau
New Update

In the recent months, the entire ecosystem of VSAT services in India has

undergone a significant change. This change has been driven by a number of

significant policy changes, which in turn, have allowed service providers to go

in for new technologies and services. Besides, a paradigm shift in the marketing

strategy of the service providers can be seen in the fact that they are now

moving away from plain-vanilla connectivity offerings to the attractively

suitable solutions for the corporate enterprises.

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Market Trends

One of the important amendments that was recently affected in

DoT’s VSAT policy was the allowance of data speeds up to 512 Kbps. This opened

up avenues for new higher bandwidth applications. Moreover, with the government

allowing the use of Ku-band as well as more powerful foreign satellites,

enterprises using VSATs or contemplating to use them, can look forward to a set

of new services. Even though all this is yet to impact the users in a

considerable way, the changes surely would have far-reaching consequences in the

coming months, as service providers begin to deploy new services, aggressively.

The VSAT services market has witnessed a number of other

changes as well.

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In the mesh market, things have moved away from shared hub

and now, many dedicated networks are happening, primarily in the government

sector. Four-to-five broadband networks and five-to-six SCPC networks are now

operational. Shared hub operators are also expected to implement Ku-band.

Several data networks on SCPC are coming up. People are now talking about data

speeds of 128 Kbps with Internet applications on SCPC network. SCPC can provide

up to 2 Mbps links.

Prices of VSATs have also become reasonable and are down by

more than 50 percent. A VSAT that used to cost Rs 15 lakh a year ago, now costs

around Rs 6.5 lakh. And that too, with added features like 2 Mbps links,

asymmetric data and video conferencing. Video conferencing is now a possibility,

as higher bandwidth has been allowed by DoT.

In the star market, Gilat, Hughes Networks and Viasat, have

become quite active in the recent months. "In this market, broadband is

presently based on TDM-TDMA, which is an older technology. They are yet to come

up with products that can get higher returns with 300 Kbps as the upper speed

limit. The world market is maturing fast with new technologies and high-return

bandwidth", points out Feroz Khan, country manager, Viasat in India. He

adds that PCMA, CRMA and MFTDMA, are taking speed and throughput to a much

higher level. With this, the rhythm of traditional VSAT on TDMA/TDM, is also

going to change.

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However, the Indian market has been less receptive to the new

technologies. "There has been a lack of interest between the service

providers and the users in going for new technologies because some of the

regulations are either still restrictive or vague in nature", observes

Puneet Jhingan, director, business development, Gilat Satellite Networks India.

Even without regulations, some industry players feel, the

market has been slow in adopting new technologies. Citing the case of acceptance

of DVB standards of outgoing link, Khan claims that only a couple of months back

Indian Oil Corporation had rejected a DVB solution on certain technical grounds.

"Today, STPI, NIC and ERNET are happily using DVB", says Khan.

Throughout, the world shakeout is imminent on the broadband

side. However, this would not be the case here, in India, as very few service

providers are going to be active in this space. Still, service providers will

have to be more innovative with their products and services, and will have to

offer better speeds and throughput. Price too, will be more competitive.

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Services on Ku-band

Of the nine VSAT service providers in India, three–Hughes

Escorts Communications Ltd (HECL), Comsat Max, and HCL Comnet–have been quite

aggressive in introducing new services. Incidentally, these three have under

them the major share of the market. Obviously enough, the three had been the

first to talk about the launch of services on Ku-band. HECL has already deployed

ninety-four Ku-band VSATs and HCL Comnet has deployed fifty-eight. Comsat is

expected to follow them soon.

HCL Comnet is now offering a range of Ku-band services, on

both TDMA and DAMA systems, targeted to fit different business requirements.

"As a first initiative towards targeting high-potential market segments,

including dealers, brokers and ATM through utility-based pricing, we have also

introduced several unique propositions branded under this banner. These services

encompass the country’s first VSAT, priced at Rs 99,900; connectivity for ATMs

and retail POPs for only Rs 99 per day; and connectivity for SAP users for only

Rs 199 per day’’, says I V Rajesh, general manager HCL Comnet. The service

provider has also introduced a service called "Magic of Nite Services"–evening

connectivity for day-end applications, such as file transfers, back-up services

and the traditional end-of-the-day applications for only Rs 99 per day. HCL

Comnet is also planning to launch several other customized and focused

initiatives, individually targeting segments, such as finance, manufacturing,

PSUs, education, etc’’, adds Rajesh

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From its Ku-band hub in Gurgaon, Haryana, HECL is offering

its Ku-band services. The hub caters to such services as high-speed Internet,

webcast, newscast, multimedia, etc, for both corporate as well as consumer

markets.

Comsat Max, the Mumbai-based VSAT service provider, is also

expected to launch services on Ku-band frequency, broadband services and

point-to-point, high bandwidth, on-demand links. "VSAT services via Ku-band

will allow Comsat Max to provide remote terminals, which will use a smaller

sized antenna and a lower RF. This is expected to bring down the remote cost for

the customers. The use of Ku-band will also allow Comsat Max to use

international satellites, thereby improving the availability of services across

the country", says Joyjit Chatterji, general manager, sales and marketing,

Comsat Max.

What Next for Corporate Customers?

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It is now a reality that VSAT services today, are much more

attractive, and service providers are offering much more than what they were

offering so far. In the past, VSATs were often seen as a reliable alternative to

the costly, unreliable as also scarcely available terrestrial links. And they

were, as mentioned earlier, just plain-vanilla connectivity options. Today, they

are much more than that. And on the other hand, today, terrestrial links too,

are neither that scarce nor that costly. What does all this mean for those using

VSATs or planning to do so? Should they stop considering other connectivity

options in favor of VSATs? After all, are they not much more reliable than the

other links? Is it not much easy and less time-consuming to deploy VSAT networks

than getting a leased line?

Take it from the horses’ mouth. "We feel that both

leased lines and VSATs would continue to co- exist, in the future. In fact, they

would compliment each other to provide reliable and cost-effective connectivity.

Today, corporates not only need customized, reliable and high-performance

solutions, but also require cost-effective propositions", emphasizes Rajesh

of HCL Comnet. Rajesh recommends the use of hybrid networks with a mix of VSATs,

lease lines, radios and VPN, for ensuring reliability and cost-effectiveness.

No doubt, all the leading service providers, in India, are

now offering a mix of VSAT, leased line, radio link and VPN, service to their

customers. With emphasis on cost-effectiveness and zero downtime, customers can

consider the option of using hybrid networks.

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Another important issue for customers is that of pricing,

especially in the face of declining terrestrial rates. Stating that cost

comparison between VSAT and terrestrial links is always complex, Chatterji

remarks that for a true "apple-to-apple" comparison, redundant links

need to be considered in the terrestrial scenario. "With the VSAT prices

today at a two-lakh level and with the shift to a revenue-sharing regime, VSATs

will compare quite favorably". Trying to make a point, he says that

terrestrial links are usually available only in sizes of 64 Kbps or 2 Mbps.

"This means that if a customer needs 10 Kbps at a site as bandwidth or say

256 Kbps, he needs to pay for 64 Kbps or 2 Mbps respectively", points out

Chatterji. The lesson for customers is to always be on guard while signing up

for services.

Another important issue for customers would be the pricing of

different types of services, within the VSAT services. They should always demand

different cost structures for different kinds of services. In other words,

customers should demand different package of pricing for Internet services

because their bandwidth requirement is going to explode. Similarly, the price

for Internet applications has to be different from the TDM/TDMA pricing. Also,

customers need to understand there is always a difference between speed and

throughput, as such, they should be cautious when signing up for new

broadband-based services.

Ravi Shekhar Pandey

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