Upstart company Virtual Connexions is looking to tackle the satellite modem market with a new approach that it believes will provide the foundation for a profitable business: applying the terrestrial mindset to the development of a new satellite modem that the company is unveiling this week at the SATELLITE 2005 conference and exhibition.

“Everyone in the world understands what is happening in the terrestrial networks arena,” Virtual Connexions President and CEO Paul Bolduc told Satellite News in an exclusive interview. “So we developed something in that line and in doing so, we are enabling satellite service providers and terrestrial service providers to [look at] satellite” more closely as a solution to extending the broadband capabilities of private networks to remote locations.

That look at the satellite modem market through terrestrial eyes has yielded the company’s new VC-1000 satellite access modem. The modem operates over the C- and Ku-bands. Bolduc highlighted some of the modem’s key features that he hopes will help Virtual Connexions carve out a significant portion of the satellite modem market.

“First, it is a hubless solution,” Bolduc said. “There is no hub. There is no master controller. That provides important cost savings. If you have no hub, you have no expensive teleport to maintain.” In addition, the hubless solution also makes connections more secure. “You are not sharing anything into an existing hub so you do not have to deal with any complex security mechanisms.”

The modem also incorporates features common in the terrestrial world, making it compatible with other terrestrial-based solutions. “It is an Ethernet connectivity solution,” Bolduc said. “And the beauty of creating an Ethernet networking device is that end user IT managers can connect our solution to any existing type of terrestrial solution. There are no complex integration issues. It is a true peer-to-peer networking solution. Everybody [operating] terrestrial networks understand how that works. We are just introducing that to the satellite world.”

Bolduc said the company has not received any orders yet for its new modem, but it has brought in some strategic partners, which he did not specifically name, but described as “some of the world’s leading satellite service providers.”

But as far as customers are concerned, Bolduc said the company is targeting smaller networks with this product. “Historically, the satellite industry has been very good at addressing large networks,” he said. “But for corporate networks that have five to 10 to 30 sites to connect, existing satellite solutions have been less efficient at targeting that market.”

“There is nothing like that in the market and it would be a huge architecture change for most of their competitors to do something like that,” Natalie Giroux, partner at Sky Point Capital Corp., a venture capital partner of Virtual Connexions, told Satellite News. “We think there is a high growth potential.”

–Gregory Twachtman

(Natalie Giroux, Sky Point, ngiroux@skypointcapital.com; Lisa Koppel, Virtual Connexions, 301/318-4381)