All Satellite Network Still In Demand
In terms of growth for traditional VSAT providers, the curve for hybrid networks is moving up, while the curve for networks that are primarily operated over satellite is expected to be holding steady or even declining, but Vespoli is among several executives who do not believe that embracing hybrid offerings means the end of VSAT-only networks. "There are still opportunities for 100 percent satellite" virtual private networks, he says. "In many cases, you still have requirements that only a satellite can provide effectively, such as restoral services, multicasting and general content push. There are areas where the broadcast nature of satellite is the differentiator. The centralized, homogenous and ubiquitous network still has significant value. The problem is that people have the expectation of the functionality of a satellite for the price of the cheapest terrestrial offering. That creates a challenge for satellite."
The demand for satellite also remains strong in regions around the globe where terrestrial infrastructure cannot meet communication demands. Hughes has about 160 major enterprise customers, representing hundreds of thousands of sites, in North America, with the majority using all satellite links, says Cook. "VSAT has survived and continues to thrive in various market segments, with growth rates depending on where we are in product development and performance cycle, and where the market is," he says. "Clearly we've got products today that are much more powerful in terms of performance than the products we had two or three years ago. Our current enterprise grade platform is capable of delivering up to T1 speeds in upload and multiple megabits in download. It's a very powerful platform, and we have the capability to give enterprise customers the bandwidth and performance they are looking for. At the same time, we have become very sophisticated with data compression and acceleration techniques, and when you look at the performance of VSAT versus DSL for Web browsing or Web-based applications, there is no discernable difference in refresh time. These techniques have helped us overcome the impact of latency."
According to Frost & Sullivan, opportunities that will remain strong for VSAT providers in developed regions of the world include digital signage, business TV networks and business continuity and disaster recovery applications. Within less develop regions of the planet, cellular backhaul and rural telephony will still provide business opportunities.
"The perception that VSAT is dying is not backed up by the numbers," Engel says. "If you thought VSAT was going the way of the dodo, it may actually be experiencing something of a rebirth. If you want to send out digital video content to stores you don't need two-way, so set up a one-way VSAT for the video distribution network and the electronic communications network is terrestrial. It is worth your while to do video distribution network as satellite. ... There will always be people that want satellite only," Engel says. "It's fabulous for broadcast. You send content once and it's received all over the place. For a one-way network, satellite is unsurpassed."
Bettinger also does not see the expansion of hybrid networks as the end of VSAT. "Where we're heading is bringing better bandwidth efficiency," he says. "Satellite still gets crushed on cost, but the lower [we can drive our] cost, the lower the cost of transport for our customers. Satellite IP is not going to lead the world in determining which direction IP goes. It has to be the other way around. The big service providers have other connections and they can extend all of those services across satellite to anywhere. That's the vision of where we're headed. ... The large global providers still can't touch 15 percent of their enterprises because of connectivity issues. That's where satellite will play."
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