The emphasis on value-added services will continue as stand-alone VSAT service providers like HECL, Comsat Max, HFCL, and Essel Shyam begin to feel the heat. The rules of the game will be slightly different for integrated service providers like Bharti Broadband and Tata Net, and solution providers like HCL Comnet—with emphasis on ability to provide best-of-breed solutions.

With the easing of regulatory conditions, prospects are expected to become considerably better for service providers. The increase in connectivity speeds up to 2 Mbps and decrease in antennae size already bring good news for the sector.

With the cost of VSATs fast declining due to decline in hardware costs, reduction in customs duty, and moving to revenue-sharing regime: customers with low bandwidth requirements at multiple locations find VSATs more cost-effective than leased lines.

While competition may increase from different modes of connectivity including leased lines, GSM, and CDMA clearly VSAT is no pushover and shall give every other connectivity media a run for its money.

Traditional sectors like banking and financial institutions will continue to drive growth. Just as lottery or ATM will be favored applications; distance education, a much-hyped concept, is expected to take off soon as more corporates get into the learning mode.

New segments like commodity exchanges and digital theatres will be new big-time deployments. As digital cinemas find favor, VSAT deployment will surge with distributors using digital transmission to kill the piracy issue.

The expansion of VPTs is likely to be a key driver for VSAT growth during the year. BSNL has already floated a tender for procuring 19,000 VSATs.

With TRAI recommending an open-sky policy, the industry is waiting for government approvals, which will overhaul the delivery of services. It is in anticipation of this policy that GE Americana is expected to slash bandwidth rates, with revised rates expected to be at a par with the INSAT rates.

However, there are still some loopholes that need to be done away with. For instance, the numerous SACFA clearances cause unnecessary delays in VSAT deployment and need to be done away with, and service providers want the government to exclude the cost of hardware, installation, and maintenance from the revenue-sharing formula.

The industry is sure that if the government meets these conditions, they will be on a level-playing field with the other connectivity providers—ushering in an era of broadband connectivity.

Balaka Baruah Aggarwal