The common theme among speakers on day one of Comsys’ VSAT2012 event in London was that the VSAT market is healthy and that opportunities for players across the board are plenty.
   Simon Bull, a senior consultant for Comsys, says there is definitely a change in the air for the VSAT business. "Enterprises and consumers are consuming bandwidth as fast as telecoms operators can increase it. By rights, the VSAT business should be dead. But, there are almost 3 million VSATs in service. In terms of revenues, we are doing better than ever, although the growth in the number of sites has slowed. The change to the VSAT industry has been massive. VSAT is seen a much lucrative and viable industry by the satellite industry than it ever has before.”
   Many speakers, including Bull, said a “revolution” was taking place across the industry. David Bettinger, CTO, iDirect said that a perfect storm was approaching where technology advancements and market demand were moving hand in hand together to create a number of new opportunities. Bull added, “Demand (for VSAT services) is exploding. VSAT technology development is accelerating. VSAT vertical value is there. Our days should focus back where we started, providing value beyond bandwidth. There is a real opportunity for this business.”
   The demand for high-quality data and video services is certainly a key behind the drive for the VSAT industry. Segments such as oil and gas, maritime, cellular backhaul, military are bandwidth hungry. The demand for bandwidth as Bull said “is going through the roof”. “Data rates are as high or higher for secondary connections than they were primary just a few years ago. Average rates now running at between 1 and 2 Mbps versus perhaps 512 Kbps 2-3 years,” said Bull. “In the mining business, the primary operations can now demand links of upwards of 50 Mbps. The amount of data people are consuming is going through the roof. Many UAVs are now equipped with 8 or more HD channels, not all of which can be used due to VSAT bandwidth limitations.”
   Bettinger also highlighted the potential for growth across different verticals. “We see a lot of growth in different areas. Maritime is one of the only verticals that really has no other choice but to use satellite. Applications such as crew welfare and monitoring are good examples here. The utilities market and the move to the smart grid will drive some good growth to our industry. Oil and gas is still driven by high crude oil prices. Cellular backhaul growth is also huge. There is new value coming to the backhaul market,” he said.
   The launch of high-powered satellites such as ViaSat-1 and EchoStar-17, to name but two, is driving satellite deep into broadband and data businesses. Hughes Network Systems (HNS) is seeing strong demand in both the enterprise and consumer market, with in particular, the enterprise market starting to come back.
   Pradman Kaul, CEO, HNS said, “We operate over 900,000 VSATs currently. We have almost 800,000 VSATs in North America. In the consumer business, we have around 628,000 subscribers. Now Jupiter (EchoStar-17) has launched, we hope the growth will now start to accelerate again. We have gone beyond providing transport. We are also seeing a resurgence in the enterprise market. For a few years, we thought this market was declining. We will see the enterprise market resume its growth. There is a buoyancy in the sales channels.”
   Interestingly, both Kaul and Mark Dankberg, CEO, ViaSat, spoke of the opportunities for Hughes and ViaSat to pick off more than the low-hanging fruit in the consumer broadband market. “The consumer market is big and getting bigger. We believe in the North American area. We have roughly 14 million under-served or unserved households. The current penetration of these 14 million is around 1 million between ViaSat and Hughes. It is a very robust market for the next 4-5 years. 40 percent of rural users have speeds than less than 10 Mbps. We believe we can provide a better service than DSL in those areas. We can attack the low end of the DSL market,” said Kaul.
   Dankberg said ViaSat had worked hard to change mindsets towards satellite and get people away from seeing it as some kind of “last resort” as regards broadband. “We have to move our choice up (where people perceive satellite broadband compared to alternatives). So, we said this we have to do this ourselves. Our selling point is speed. We thought speed was the value proposition. My total focus was (lets be) ‘better than DSL’. Our story is that satellite is better than broadband alternatives. 42 percent of our new subscribers came from terrestrial. In the United States, there are 30+ million DSL subscribers. The telco industry is bleeding subscribers to cable. Our market could go to tens of millions. We could one day form partnerships with telcos,” he said.
   Dankberg said the satellite industry has to become much more data-centric from now on. He added, “The satellite industry has been built about broadcast, but now it is about data. Everything will have to change in the industry. It does not need to leave people behind. There is room for all the participants. We think the payloads will have to change. I think about Ka-band as a business model. It is changing in profound ways. Consumer is the fastest growing. But, you have aero, maritime, defence, backhaul. If bandwidth is the currency, this is the way to deal with them.”