Cover Story: VSAT Moneymakers: Around The World
By James Careless
VSAT: the acronym means Very Small Aperture Terminals. But for VSAT operators around the world, VSAT means opportunity. Consistently, it seems that someone, somewhere comes up with creative new ways to use VSATs for business ventures. Here are some of the very hottest VSAT applications from around the globe, all of which offer real opportunity for manufacturers, vendors and service providers alike.
Interactive Distance Learning
With its inherent one-to-many distribution pattern, VSATs are tailor-made for interactive distance learning (IDL). "In fact, there simply isn’t a more cost-effective, easily deployable and robust way to reach students continent-wide than via satellite," says Arunas Slekys, vice president of Hughes Network Systems.
Technically speaking, Slekys is right. But what about distance learning itself? Is it a hot business opportunity for the VSAT industry? Is it ever, says Simon Bull, senior consultant at Comsys. While traveling the world to research Comsys’ "The VSAT Report 2003," Bull got an earful about interactive distance learning wherever he went.
"In China, for instance, almost every operator we interviewed cited IDL as the primary area of opportunity in that country today," says Bull. "In fact, interactive distance learning services have sparked a gold rush in China. Distance education over satellite for universities and schools dwarfs almost all other VSAT market segments in the country today. Chinacast has more than 10,000 HNS-manufactured satellite sites deployed for universities and schools throughout the country."
The Australian government has also embraced IDL for delivering education to small rural towns, 239 isolated schools, and isolated homesteads in New South Wales and the Northern Territory. One of Australia’s major telecoms, Optus, is running this IDL network using Gilat Satellite Network’s (Gilat) Skystar 360E VSAT platform. "It is gratifying to know that VSAT technology will enable so many people to take advantage of educational opportunities that were previously unavailable to them," says Oded Sheshinski, general manager of Gilat’s Australian office.
Meanwhile in Mexico, President Vicente Fox launched the satellite-based "e-Mexico National System." Using VSAT technology from Viasat and OneTouch’s distance learning product, e-Mexico will eventually use 17,000 VSAT sites to provide IDL to 85 percent of all Mexicans.
Broadband IP/Internet Access Via VSAT
Next to IDL, broadband IP/Internet access via VSAT is the opportunity that is on everyone’s minds. Small wonder. Whether it is for business, schools or consumers, broadband IP/Internet access is something that everyone wants.
Moreover, money does not seem to be a barrier. For instance, "the real driver in Africa is broadband satellite access," says Bull. "People want Internet access, and, despite Africa’s poor economy, they are willing to pay to get it now."
South Africa’s Telkom SA Ltd., for example, is deploying a Gilat Skystar 360E satellite hub station and thousands of VSAT terminals to support Telkom’s broadband VSAT offering. Throughout the next five years Telkom SA will deploy more than 26,000 Gilat VSATs.
On the other end of the continent, the Ethiopian Telecommunications Corp. selected HNS for a $25 million contract to create a comprehensive broadband network for schools, businesses and government agencies across Ethiopia.
"Multimedia data services in Africa are catching on," says Jorge Vespoli, vice president of sales and marketing for Viasat. "We have one customer whose core business has been broadcasting, but that now is diversifying into multimedia services for a variety of audiences."
Across the Straits of Gibraltar, "the buzz around Europe is satellite-based solutions for SMEs [small-to-medium sized enterprises] and SOHOs [Small Office/Home Office], which provide broadband services fast and affordably," says David Hartshorn, executive director of the Global VSAT Forum. "With an eye to eventually reaching consumers, European satellite service providers are relying on open standards to keep costs down for business."
Of course, some parts of Europe are not well-served by terrestrial networks. This is why Russia’s Crosna Group is installing an HNS Direcway Network Operations Center and 7,300 one-way and two-way broadband satellite terminals to link schools throughout Moscow. But poor terrestrial connectivity is not just an Eastern European issue. In the Netherlands, more than 800 rural schools/colleges rely on Direcway for their IP-based services.
In India, the Indian telecom service provider HCL Comnet is deploying a Gilat 360E VSAT satellite hub and 500 VSAT terminals.
Further east, Speedcast Ltd. is launching two-way broadband service via satellite throughout Asia, using Viasat’s LinkStar VSAT equipment. Based in Hong Kong, Speedcast’s service will provide broadband Internet access and Virtual Private Network channels to business users at speeds up to 1.5 Mbs. "Viasat’s LinkStar system will allow Speedcast to quickly deploy broadband Internet services to the most remote parts of the region, using cost-effective VSATs," says Speedcast CEO Tom Choi.
In South America, broadband IP/Internet access is also in hot demand. For example, despite Brazil’s continuing economic problems, the country’s Communications Ministry selected Gilat to provide two-way "GESAC" (Governo Eletronico-Servico de Atendimento ao Cidadao) Internet service to 3,200 VSAT sites nationwide. "GESAC is a major undertaking that will help bridge the digital divide in Brazil," says Juarez Quadros, Brazil’s minister of communications. "The program brings Internet access and computer usage to citizens with little or no purchasing power."
North America’s rural regions also need VSAT to access broadband services, says Jeff Mathie, president of Patriot Antenna Systems. This is why "Patriot is at the forefront of several new projects in North America supporting cable companies that are reaching out to rural markets with Internet access," he says. "Patriot is offering traditional Ku-band VSATs as well as some multi-band systems that transmit at one frequency and receive on another, allowing traditional video receiving cable headends to receive Internet content."
Data communications, point-of-sale support and credit card checks have long been a staple of the global VSAT industry. There is a wave of other business applications, however, that are turning to satellite for support.
Take the lottery and gaming business, for example. In just the past few months, Gtech Corp. selected Gilat’s U.S. subsidiary Spacenet Inc. to install more than 10,000 Skystar Advantage broadband VSATs for lottery networks in California, Minnesota, Kansas, New York and Idaho.
Meanwhile, the Russian Satellite Communications Co. (RSCC) and the gaming company JackPot contracted to deploy a Gilat Skystar 360E hub and VSAT network with sites throughout the Russian Federation. "The VSAT network will unite sites dispersed throughout a huge territory and will be independent of the difficult infrastructure issues that would have been faced using a non-satellite technology," says Janna Koretskaya, Gilat’s associate vice president of sales and marketing, Africa, Central and Eastern Europe and CIS.
Then there is the Simon Property Group Inc., one of the United States’ largest owners, developers and managers of retail real estate. Mindful that most small retailers cannot afford broadband access on their own, Simon hired HNS to provide mall tenants with shared access to Direcway broadband satellite service.
In a similar vein, Gilat subsidiary Spacenet’s Connexstar service is providing commercial-grade, Wide Area Network (WAN) connectivity to America’s multi-unit retail, hospitality and service enterprises. The service is catching on quickly and among the many recent customers of the Connexstar service are Steak N’ Shake, American Farm Bureau Federation, Dairy Queen and Golden Corral. "These companies appreciate the core benefits of VSAT-delivered data services: ubiquitous availability, single-source service provision and highly favorable economics compared to frame relay, DSL and other terrestrial connectivity options," says David Shiff, vice president of sales and marketing at Spacenet.
Meanwhile, with a steady eye on the Internet generation, Border Foods is using a Direcway broadband network to allow its 80 Pizza Hut franchises in Minnesota, Iowa and Wisconsin to take pizza orders online. The results are faster service, increased spending by customers, and greater in-store efficiency.
In the entertainment industry, the U.K.’s Virtual Music Stores selected HNS’ broadband services to connect its "Music on Demand" retail kiosks throughout Europe. "Music lovers will be able to walk into a store, enter a Music on Demand booth, and download the songs they want via satellite," explains HNS’ Arunas Slekys. At press time, Music on Demand was testing its service at trial locations in England.
On the big screen, the U.S.’s Regal Cinemedia Corp. is now delivering its Digital Content Network via Direcway to Regal Entertainment movie houses in 15 markets, reaching approximately 160 theaters and 2,000 screens. This content includes commercials and behind-the-scenes featurettes typically run before trailers.
Finally, a mainstay of VSAT-delivered entertainment is NTN Communications’ Buzztime Network. Now available in more than 3,500 bars and restaurants across North America, Buzztime is a major league-sanctioned, multi-player trivia game for sports fans.
Mainstream Data signed a five-year agreement with NTN to provide a 4,000-site VSAT network infrastructure supporting NTN’s interactive sports games, as well as an ability for NTN to deliver additional value-added services such as credit card authorization, POS connectivity and even wireless Internet.
"After carefully considering Hughes and Gilat VSAT hubs, we selected a LinkStar system from Viasat and have been successfully operating our hub in Salt Lake City since the beginning of the year," says Scott Calder, president and CEO of Mainstream Data.
Calder adds that large information companies are increasingly realizing that they need alternate delivery mechanisms that are not entirely dependent upon telephone central offices located in vulnerable, often insecure locations. "In addition, we have seen a huge amount of interest from WiFi Internet service providers who need a convenient means of delivering service to sites that are either remote or underserved by terrestrial infrastructure," he says.
Telephony Of All Kinds
VSATs have long carried telephone traffic, yet telephony remains one of the industry’s hottest applications. With its ability to extend services quickly to new areas, and to include data and Internet access as part of the package, VSATs remain the best choice for many telephony clients.
Russia, for example, is notorious for having poor terrestrial telephone service. In response, Boeing, HNS, Thuraya Satellite Telecommunications Co., the Russian-owned wireless carrier TMSat and the Russian Satellite Communications Co. have joined together to bring Thuraya’s service to Russia.
With Thuraya’s coverage, this satellite service is a natural solution to Russia’s telephone woes. This is why "TMSat sees a tremendous market for Thuraya satellite-based mobile telephone service in Russia, which is both complementary to and compatible with terrestrial GSM service," says TMSat CEO Nikolay Prokhorov. Also on the drawing board for Russia’s isolated, income-poor rural communities is a "payphone" version of Thuraya’s voice/data/ Internet services. Essentially, these will be standalone sites that the public can use, with the costs being shared among them through user fees.
In South America, Colombian telecom Compartel has hired Gilat to provide 3,000 rural telephony sites and 500 telecenters, increasing the amount of Gilat VSATs deployed by Compartel to 8,500. "With the arrival of the Compartel Telecentros Program, the digital divide will be bridged in 500 communities, providing the population with cultural, economic and social opportunities they never had before," says Rolando Fernandez, president, Gilat Networks Colombia, SA E.S.P.
Emergency Back-Ups, Telemedicine And More
As September 11, 2001 proved, a "back-up terrestrial network" is an oxymoron. "You can’t protect yourself from AT&T failing by also signing up with Sprint," says Slekys. "If something happens on the ground, whether an earthquake or a 9/11-style attack, both networks will be taken out at the same time."
In fact, the United States Postal Service (USPS) proved the value of a VSAT back-up during 9/11. The USPS had more than 12,000 Gilat VSATs in place connecting its offices, both for distance education and as a back-up to its terrestrial frame relay system. When the World Trade Center attack disabled the USPS’ landlines in New York City, the Post Office restored connectivity by switching to VSATs.
When it comes to delivering telemedicine to remote areas, often no solution is more efficient than VSATs. This is why the China Satellite-Sanitation Science Technology Educational Network is built with HNS VSAT equipment, in a bid to provide telemedicine support throughout the country. This network–which will also support medical distance education for doctors in remote areas of China–will feature a number of originating stations, plus 2,000 receiving VSATs.
With their ability to get signals out, VSAT-equipped remote monitoring stations are increasingly being deployed worldwide. The Chinese Ministry of Water Resources deployed a 400-site Gilat VSAT network to ensure reliable transmission of hydrological and flood control reports from field offices in 10 provinces to the Ministry’s Beijing headquarters. Similarly, the Chinese Bureau of Seismology operates a 150-site VSAT network to transmit seismological reports from its field offices to Beijing.
In Kazakhstan, KazTransCom is using a Gilat DialAw@y IP network of 100 VSATs for oil and gas pipeline monitoring, Internet access, always-on data communications and telephony. The country’s major oil company, KazTransOil is also using a network of 110 FaraWay VSATs throughout Kazakhstan for oil and gas pipeline monitoring, plus Internet access, video conferencing and other enterprise-wide data applications.
Finally, one of the most unique applications of VSAT remote monitoring is in the Amazon jungle. This is where the Brazilian government deployed 300 HNS Direcway remote terminals as part of its $1.4 billion "System for the Vigilance of the Amazon" (SIVAM) project. Meant to keep an eye on two million square miles of rainforest (an area half the size of the continental United States) SIVAM remotely monitors environmental changes in the Amazon Basin. SIVAM’s plans call for more than 1,200 VSATs to be deployed throughout this region.
A Good Time To Be In VSATS
If there is one lesson to be learned from all of these business opportunities, it is that VSATs remain one of the satellite industry’s brightest stars. Granted, the road has not been bump-free. Lingering government restrictions in many areas are hampering VSAT deployments, while the ongoing economic slump is slowing sales.
Still, with 500,000 VSAT dishes deployed worldwide–plus millions more used for consumer DBS–and an ever-growing list of possibilities, it is an exciting time to be in VSATs. Moreover, the future looks promising as well.
James Careless is senior contributing editor to Via Satellite.