By Robustiano Fernandez

With all the excitement and attention the new LEO MSS and developing Ka-band satellite systems have been generating, it is easy to overlook the traditional, time-tested technology of the VSAT. VSAT networks have formed the foundation of the satellite industry’s success as a global communications solution for businesses. VSAT companies continue to advance this perception by providing services around the world that range from the most fundamental rural telephony systems to the most current demands for enhanced Internet connectivity.

Global Hot Spots

There appears to have been a shift over the past few years regarding which geographic regions are generating the most demand for VSAT networks. The People’s Republic of China (China) seems to be a rising star, according to several VSAT manufacturers. Many VSAT providers are waiting for the economic recoveries of the once-booming Asia-Pacific, Russian and Latin American markets, although others report they are still seeing significant business in these areas. According to several manufacturers, India is promising to become a strong source of VSAT demand with the recent softening of the regulatory climate there, and of course, the United States and Europe continue to see strong growth in the more advanced VSAT networks providing data and Internet transmissions.

According to Vinod Shukla, senior vice president of Hughes Network Systems (HNS) satellite network division, data is driving the growth of HNS’ VSAT business. “We are continuing to see growth in the U.S. market, but we also see a need for global networks,” Shukla says. He explains that the U.S. multinational companies are seeking solutions for connecting with regional offices overseas. Shukla also points out that international data markets are expanding at twice the rate of the United States.

To highlight the prominence of data networks, Shukla points to several recent contracts. HNS was retained in summer 1999 to provide an extensive network for SAP, a German provider of enterprise and resource planning software for companies. SAP will use this network to distribute a multimedia package including training videos, distance learning and new software releases on a global basis to both their internal dealers and to external customers. Although the network is still in the planning phase, Shukla estimates that it could connect easily 20,000 sites in Europe, North American, Latin America and the Asia Pacific.

HNS is also continuing to deploy a VSAT network for the United Nation’s Comprehensive Nuclear-Test-Ban Treaty Organization (CTBTO). This network connects remote seismic monitoring stations to the CTBTO’s data analysis offices in order to monitor compliance with nuclear testing treaties. The network, when fully deployed, will include 337 worldwide monitoring facilities, the International Data Centre in Vienna and the treaty’s signatory states (currently 151), according to Shukla, including one monitoring facility in the Himalayas that holds the distinction of operating at the greatest altitude of any VSAT. The network will routinely transmit up to 11.4 gigabytes of data daily. This contract is a 10-year, $70 million project for HNS.

Erez Antebi, Gilat Satellite Network’s vice president of marketing and general manager for Asia, Africa and the Pacific Rim, agrees that Internet/Intranet applications have become strong drivers of the VSAT business. In addition, he points to rural telephony as the other top application for Gilat.

On the data side, Antebi gives the example of a recent contract with Accent Health, a company that delivers video content to doctor’s waiting rooms. Currently, this customer serves 9,000 sites with content delivered via videotape and played back on waiting room monitors via VCR. Gilat is providing its Skyblaster product to equip each doctor’s office with a two-way VSAT link. In addition to the content that is transmitted for viewing by the patients, Accent Health will be able to use the return channel to provide high-speed Internet access, fast credit card authorization, interactive distance learning, and verification and monitoring of advertisements, such as determining when the monitors are turned off or on. Additional applications, such as insurance verification and online ordering of medical and office supplies, are in development.

For rural telephony applications, Gilat is seeing the most activity in Latin America and the Asia Pacific, evidence that these regions are recovering from earlier economic slowdowns. In Colombia, Gilat, through its affiliated company Global Village Telecom (GVT), is helping Combertol, the Columbian PTT, fulfill universal service obligations (USOs) to provide telecommunications services to small villages throughout the country. GVT has already had similar experience with this kind of contract in Chile and Peru. In Colombia, GVT is installing a VSAT system of 5,000 sites to provide more than 6,500 phone lines, a system that Antebi expects to begin service by the end of 2000. These VSAT sites take the form of phone-booth kiosks in each village.

In Indonesia, Gilat is providing a similar network with a slightly different spin. Under a contract with Miratel, a subsidiary of Cable and Wireless, Gilat is providing Dialaway VSAT links in the larger villages, with populations around 1,000-2,000 inhabitants. These Dialaway VSATs connect public call offices, small facilities that can accommodate several patrons at once. According to Antebi, various service providers are also looking at expanding the capabilities of these public call offices by providing high- speed IP connectivity for use by local businesses such as general stores and local mining operations.

For Scientific-Atlanta (S-A), China, India and Australia have proven to be areas of increased demand for VSAT services. The applications each region is demanding vary, however, according to Stephen Spengler, S-A’s director of worldwide sales and regional operations. In India, S-A works through three service providers: Bharti BT Ltd., Telstra V-Comm Ltd. and HFCL Satellite Communications Ltd. Because each of these service providers is pursuing different applications for different customers, S-A has adopted a “one size fits all” approach, providing VSAT systems that are suitable for a wide range of applications and not optimized for any one solution.

In China, S-A’s relationship with the customer is markedly different. In this country S-A deals directly with large government ministries or government-owned industrial consortiums with a captive user base. In Spengler’s experience, such users have shown a trend towards initially purchasing traditional VSAT networks providing a combination of video, voice and low-speed data, but eventually upgrading to enhanced data networks to implement IP and high-speed data.

In Australia, S-A is providing VSATs to Telstra, which is in turn helping the Australian government meet its USO obligations by providing a national VSAT network, primarily carrying voice communications, to scattered communities in the Australian outback. Telstra is also using S-A VSATs to upgrade its Iterra service, targeted at small company operations as well as remote mining sites, offshore oil and gas platforms, crisis relief centers and the defense forces. Again, a typical connection will provide single-channel voice communications. Although this contract is only 18 months old, Spengler expects the final deployment to reach thousands of sites.

The Future

Looking ahead, all of the VSAT executives interviewed for this story agree the “killer ap” is high-speed Internet and multimedia. For Shukla, Hughes’ Spaceway system, and its promise of global, high-speed broadband connectivity, is the main focus for HNS in the long term. In the short term, Shukla sees continuing economic recovery in Russia, Latin America and Southeast Asia creating new opportunities for his company. For Gilat, Antebi has high hopes for the newly-launched Gilat-To-Home initiative, which seeks to provide consumers, initially in the Untied States, with high-speed Internet and multimedia services direct-to-home. S-A’s Spengler is understandably preoccupied with the recent acquisition of S-A’s satellite businesses, all but the Powervu product line, by Viasat. However, he does see these units continuing with the current vision of being very active in Ka-band development, as well as more IP-related and asymmetric services. As he puts it, the entire VSAT industry is looking toward a broadband satellite future.

Robustiano Fernandez is the Senior Editor of Via Satellite.