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VSAT services are still a good choice for enterprises looking at dedicated bandwidth because of growing ubiquity of terrestrial data networks and solutions and also because of their cost effectiveness in deployment. VSATs are easy to install, can be deployed fast and serve even the most remote locations. Moreover, in recent times, with equipment and running costs going downwards, they have become more affordable to small and medium businesses.

VSATs have become more superior indoor units with compact, ASIC design and work as full-fledged routers with 10/100 Mbps ports, routing support, serial and Ethernet ports, SNMP, DHCP, QoS and filtering. Moreover, there has been a movement towards more standardization in technologies with DVB-S emerging as the standard for downlink channel; and IPoS, DVB-RCS and DOCSIS for the return channel.

Also, use of Ku band as the frequency band for VSAT communications offers new cost and performance advantage. With government allowing the use of smaller dishes, users can now install VSAT equipment indoors. Overall, VSATs have become smarter and more powerful networking and telecom devices.

The Road Ahead
Though VSATs were being used as a backup to MPLS, ISDN, or any wireless technology, volumes show the satellites are still there on the minds of CIOs. The cut-throat competition among vendors has eroded margins, which are not expected to stabilize this year either. The prices are expected to crash, with some indications already there.

In fact, everything except the open sky policy seems to be working in favor of the industry. The broadband policy supported usage of VSATs in high-speed Internet connectivity. The SOHO and SME segments have huge potential but the general perception towards VSATs and a cultural mind block prevents mass usage in these segments. Unless volumes pick up, this segment would not be a viable business proposition for vendors.

• As of now, VSATs are still not quite affordable for Indian retail users. In the US and Europe, VSATs are used as platforms for multiple applications including the Internet and cable TV, mostly through a rental model. Wildblue, a US company provides Internet service with download speed up to 1.5 Mbps and upload speed up to 250 Kbps through VSATs. In India, lack of a retail credit rating agencies and lack of proper recovery mechanisms has kept vendors away from this segment. Also the cost of satellite bandwidth, though coming down, is still very high for home users. It would see some deviations once Ka band spectrum becomes available.

• The government, including ISRO would be the prime market driver for FY 2006-07. ISRO is expected to expand its EduSat-linked VSAT base. There are plans to connect almost 60,000 schools through the EduSat, but less than one-fourth have been implemented till now. If the government clears the HealthSat project, it will work on the lines of EduSat-to take health services to every corner of the country. It would invite another round of VSAT tender. The proposed satellite would not only serve remote areas of India but also other poor countries in Asia and Africa. There are 650 district hospitals, 3,000 taluk hospitals, and more than 23,000 primary health centers in the country. If everything goes well for both projects, the industry would see massive VSAT deployments.

  Experts panel

  Feroz Khan, country manager, Viasat K Krishna, senior director, Marketing, Hughes Communication Ranganathan Narayanan, COO & GM, GiLat

• With the government chalking out plans to take e-Governance to the Panchayat level, VSATs would be the primary drivers for providing connectivity to remote and rural areas. The various natural calamities as well as many manmade disasters have driven home the necessity of making disaster recovery sites and early warning systems. Here again the government would be evaluating VSATs closely to connect the disaster-affected areas.

• The BFSI sector would continue to expand its network and the value proposition of ATM centers would prompt them to have more ATMs in class B and C cities. Recently, State Bank of India announced to install another 3,000 ATMs by December 2007. This is said to be the largest ever installation announcement made by any bank. This is good news for the vendors. But they have to keep a close watch on the competition from fiber and CDMA connectivity service providers. Though the volume in this segment is huge, the value generated is very less.

• Besides the brokering fraternity, vendors can look forward to gains in this market too. The oil and gas companies have been evaluating VSATs for their retail outlets for sometime now, and this year might see their plans taking shape. Manufacturing and automotive sectors are also looking up and pricing of the terminals would attract many new customers. With big names like Reliance, Wal-Mart and Bharti entering the Indian retail space, the VSAT industry would see a definite growth. Fast food companies like Barista, Pizza Hut, and McDonald's are expanding their business and seriously considering the satellite route to connect their outlets. Similarly, multi-brand stores like Shoppers Stop, Big Bazaar and Subhiksha would look at VSATs to link their shops.
  
  If the vendors are not able to cut on hardware costs further, innovative applications based on rental models are a viable option.

  Using VSATs Effectively

  VSATs should be used for applications that have low TCP handshakes due to satellite latency Use multicasting applications like file broadcast, video streaming, corporate training, and data broadcast Use thin route VSATs for bursty traffic like ATM, POS, lottery, extended ERP and Internet applications Use it as a complementary backup to a primary terrestrial link-it offers more redundancy than ISDN Fine-tune applications to minimize handshaking, to limit impact of latency of 500 ms Use the VSAT indoor unit as a router and save on router costs-as it has sync serial and Ethernet ports, supports routing, SNMP, filtering, spoofing, compression, and DHCP functionality

Buying Tips
Before buying VSATs, an enterprise has to decide upon network size, the type of network, network architecture, technology, and the spectrum band.

• Network Size: The buyer has to first decide upon the total number of sites that will be covered by a VSAT, the number of users per site, and the range of applications to be used. He will also have to ascertain the duration of usage by different applications and users. The various applications can be voice, fax, interactive data messaging, data broadcasting and data collection requirements, and can vary among corporates. Corporates will also have to specify the type of equipment (EPABX, telephone or LAN) to be connected to the VSAT, and the physical interfaces and protocols to be used for the interconnection.

• Type of Network: The corporate has to decide whether he wants a dedicated or a shared hub network. In a dedicated hub scenario, the hub infrastructure is utilized by a single corporate entity with all the VSATs in the network sharing the available resources. Such a hub is recommended only when the number of sites is large and the application is specific to the corporate. Unless the number of terminals is in the range of 300–350, it makes little economic sense to invest in a separate hub and operate as a private captive network.
  
  In the case of shared hub, corporates share the hub along with the other service providers. The shared hub service providers also handle licensing and frequency coordination services. The advantage here is that users can concentrate on their business areas instead of creating expertise and skills in satellite communication systems, for effective utilization of the network.

• Network Architecture: The two types of network architecture in use are star and mesh. Star is the most commonly used architecture and uses VSATs and central hub stations. This architecture works for both point-to-multi-point and multi-point-to-point communication services. However, since the complete communication has to switch through the central hub station, the link uses double-hop satellite links, and hence, there is a delay of 540 ms. While this is acceptable for many data applications, it is not preferred for real-time voice and videoconferencing applications.
  
  The mesh network uses identical-size VSATs for communication, directly through the satellite. Thus, it needs large antennae. Since single hop link is involved, this network is widely used for voice and videoconferencing applications. These networks can be configured on demand assigned basis.

• Technology Type: The corporate also has to decide whether it needs TDM/TDMA or the SCPC/DAMA technology. In the DAMA technology, VSATs are pre-allocated a designated frequency and it is quite similar to the terrestrial leased line. DAMA is ideal for voice because there is minimum delay, whereas TDM/TDMA is ideal for data applications.

  With the government chalking out plans to take e-Governance to the Panchayat level, VSATs would be the primary drivers for providing connectivity to remote and rural areas

• Spectrum: The buyer has to state which band to opt for. Satellite communication evolved exploring C-band and extended C-band, but Ku-band has been found to be more appropriate for VSAT networks. However, this band suffers from some attenuation during rain. Tropical countries like India prefer to exploit extended C-band before using Ku-band, as it is not severely affected by rain. After selecting the above elements, the corporate buyer has to evaluate the type of VSAT that it plans to buy, the VSAT vendor, and the service provider.

• Speed: At present, the return speed varies from vendor to vendor and also from product to product. One can get speeds varying from 156 Kbps to around 1.2 Mbps. So depending on the application and usage requirement, one can choose a particular product, based on a particular technology.

• Throughput: It specifies the end-to-end bandwidth that an enterprise gets and this is where technology plays its role. A few vendors have been talking about bandwidth conservation technologies like TCP/IP spoofing while others have been talking about PCMA/CRMA.

• Cost: The hardware cost varies, depending on the configuration that one goes for. Apart from the hardware costs, bandwidth charges too form an important component. Bandwidth costs can be negotiated depending on the number of VSATs installed, and this approach can prove to be cheaper than the per Kbps option. The annual maintenance cost for the network is roughly around 6-8% of the hardware cost.

• Selection of Service Provider: In an infrastructure project, such as a VSAT network, buyers cannot easily shift from one service provider to another, since the technology platform is proprietary. Hence, one has to carefully evaluate the above criterion while choosing a VSAT service provider. Customer services can vary widely from vendor to vendor. A service provider must provide comprehensive end-to-end services for onsite technical support, integration of VSATs with user terminals, network applications and integration ability, and process and infrastructure for delivering consistent service, optimum utilization of the network. Also, round-the-clock helpdesk service, training of corporate users, provision of transparent billing and service-level agreements, ongoing service reports and review procedures, support during crisis, demonstration of performance quality on demand, and assistance to network augmentation when needed, will be required by the user.

Gyana Ranjan Swain
gyanas@cybermedia.co.in