Global VSAT Review: Where There’s A Water Tower, There’s A Way

By David Hartshorn

For anyone puzzled by the sharp increase in water towers throughout Africa in recent months, this correspondent is pleased to divulge what’s driving thirst on the continent: VSATs.

“Water towers,” it turns out, make excellent camouflage for the interactive satellite antennas hidden inside and–as an added design feature–the towers’ drain pipes serve as effective VSAT-cable conduits.

The method to this madness? As explained by Geoff Daniell, the Global VSAT Forum’s (GVF’s) Southern Africa Affiliate, local entrepreneurs have learned that pent-up demand for basic communications can be met by voice over IP via satellite (VoIP), both quickly and cost effectively–even when you factor in the cost of the water tower.

This awkward business model emerged in the absence of clear local regulations for the provision of voice over IP, which has driven service providers underground–or in this case above ground–and has given rise to what could be fairly described as the mother of all grey markets.

During a presentation given recently at the GVF’s African and Arab States VSAT Summit in Johannesburg, South Africa, Daniell reported satellite-based VoIP services now routinely are offered throughout the region and, in at least one African country, its entire supply of voice services is provided via satellite. Quietly.

Africa, however, is not an isolated case. In the Middle East, it’s swimming pools–replete with chlorine-blue canvas covers–that have been added to some of the more inventive communications portfolios. And in less-affluent markets, a thatch-covered dirt pit fits the bill nicely. (We’ll address camouflage attenuation in a future column.)

Similarly, on a remote Pacific island, demand for IP-based distance learning is so great while the local monopoly’s response to local needs was so apathetic, the community finally took matters into its own hands. They installed an unlicensed VSAT-based distance-learning solution for the island’s school, switched it on and began educating. Faced with the project’s high-visibility success, the local monopoly had no choice but to permit service to continue.

Fortunately, many governments have begun taking a more enlightened view toward facilitating the use of advanced IP-based satellite solutions. Pakistan is a good example. Back in the mid-1990s, a number of multi-national organizations were providing communications traffic via satellite between Pakistan and various regional offices throughout Asia. By then, VoIP had emerged on the scene and had begun to mix with video and traditional data services.

When the government of Pakistan learned that VoIP was being provided via international satellite circuits, their response was decisive and immediate: They shut down all international satellite links. Suddenly, major corporate enterprises’ lines went dead. A scramble ensued, and Pakistani authorities advised all parties that they would have to re- route their satellite traffic via landlines to the local monopoly.

Fast forward five years. Recently, the GVF secretariat in London received an unexpected visit. A representative of the government of Pakistan was in the lobby and wanted to meet, Pakistan was making preparations to deregulate, and VSAT had been identified as a strategic area of interest. The GVF was asked to send a notice to its global membership, requesting interested service and system providers to contact Pakistani authorities regarding new opportunities. “And tell your members this,” the government representative added: “We want international voice over IP. Via satellite.”

IP-driven reform is not unique to the satellite industry, nor is there an unusual tendency for VoIP grey markets to play a defining role in liberalization. On April 28, 1999, Beijing’s Ministry of Information Industry (MII) ended China’s de facto long distance and international monopoly by issuing competing IP telephony licenses to China Unicom, Jitong and China Telecom. (Since then, China Netcom also received a license.)

As recounted in “ITU Internet Reports: IP Telephony,” the opening of China’s IP telephony market had been preceded by a “substantial amount of ‘grey market’ activity by ISPs, computer shops and local CATV networks. What galvanized the market was a lawsuit brought against the MII by two brothers in Fujian province.”

In 1998, the Chen brothers began offering IP phone service through their computer store. The ITU report notes China Telecom insisted the brothers had broken the law, and filed a judicial demand to get them arrested. After the police detained the brothers and seized their equipment, the Chens filed suit against China Telecom for the illegal seizure of their computer equipment.

The case captured national headlines and focused attention on VoIP’s strong potential. In the end, the Chens got their equipment back, the MII “quite successfully” created a partially-liberalized VoIP market, the Chinese people obtained greater access to basic services, and the stage was set for satellites to play an expanded role in China’s development. Everyone was happy…except perhaps the local suppliers of water towers.

David Hartshorn is the Secretary General of the Global VSAT Forum. For more information, e-mail: [email protected].