Vand D100 On The Fast Track

2013-01-28

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VSAT

On the Fast Track

Banking and finance rocked the VSAT industry in FY12 with
steadfast deployments
Highlights
 Banking and Finance have been

the major growth drivers in FY12

 Rural Penetration for CSCs

APDRPs is already gaining
grounds
 Panchayat connectivity, RRBs,
ATM Digital Cinema and
Signage, shall drive the growth
for VSAT industry
 On-the-move mobility
applications for voice and video
are growing
 Enhanced VSAT CPEs for
security, routing and multiservice integration, dual hubs
and adoption of Ka Band are
new key trends

V

SAT deployments in FY12
showed prominent growth
taking overall revenue for
this industry to `500 crore.
The industry registered close
to 6% growth while showing prominent
developments last year. These include,
first use of Ka-band spectrum (18-28
Ghz), on-the-move mobility applications
for voice and video, large scale adoption
for ATMs by white label and managed
service providers, enhanced VSAT CPEs
for security, routing, and multi-service
integration business continuity through
dual Hubs.

Market Scan
First in the lead is Hughes Communications. The company registered a whop-

ping 18.4% growth with total revenue
clocking `167 crore for FY12. Hughes
bagged an order to provide network connectivity for police stations across 400
locations in Jharkhand. It also provided
satellite based ‘receive only terminals’
(rots) network for Edusat project of the
Government of Punjab.
State Bank of India gave Hughes an
order for setting up 2,000 sites recently.
Hughes also bagged the contract for Jaipur
Vidyut Vitran Nigam (Jaipur Discom) in Rajasthan under which Hughes will provide
broadband satellite services connecting
825 locations.
The second contract was awarded
for the 5 utility companies in Karnataka
(BESCOM, CESCOM, MESCOM, GESCOM,
and HESCOM) to deploy a network of 713

90 | VOICE&DATA | JULY 2012 | voicendata.com | A CyberMedia Publication

satellite terminals where Hughes is the
secondary network bandwidth service
provider.
The mandate for Hughes across both
states is to expand the R-APDRP solutions
platform to urban as well as rural areas.
The Rajasthan and the Karnataka agreements have been signed on for 3 years
and 5 years, respectively.
Also, Hughes has received approximately 5,000 orders from January 2011
till now for setting up VSAT terminals of
‘Brown Label’ ATMs’ service providers
across the country.
Second is Bharti airtel. Even though
the company witnessed flat growth in
VSAT with `107 crore in FY12 as compared to `95 crore in FY11, Bharti airtel
has deployed VSATs (13,000+) for Gu-

VSAT

Top VSAT Players in Revenue Terms (FY 2011-12 in crore)
Players

FY11-12

FY10-11

Change (%)

Hughes Communications

167

141

18.4

Bharti airtel

107

95

12.6

Tatanet

84

77

9.1

HCL Comnet

78

83

-6.0

Essel Shyam

28

35

-20.0

BSNL

21

20

5.0

Others

15

20

-25.0

Total

500

471

6.2

Others include: Infotel Satcom,GNFC
V&D Estimates

jarat for its E-gram project. In addition
to large statewide deployments, it has
also installed services for large private
and public sector banks for their branch
connectivity and for carrying critical core
banking applications.
In FY12 airtel focused to further
build around available infrastructure
by deploying technologies like Gilat
Skyedge2.
Tatanet deployed 129 VSAT stations
as part of the optimum seismological
network for Indian National Center for
Ocean Information Services (INCOIS).
Tatanet’s revenue clocked `84 crore
showing a growth of 9.1% in FY12. The
company has bagged an order for 3,000
VSATs from Wipro to be deployed as part
of the financial inclusion project managed
by this nodal agency (NABARD).
Also, Tatanet installed connectivity for
close to 4,000 ATMs managed by service providers like Prizm Payments, Tata
Communications Banking Infrastructure
(TCBIL), Euronet, FIS, and AGS.
Essel Shyam, even though with not
much addition to the VSAT deployments,
has bagged a few projects to its credit in
FY12. It deployed a VSAT network for
North Eastern Electric Power Corporation
(NEEPCO) project and for deep water resources (ONGC). The company showed a
degrowth of 20% last year.

Growth Drivers
Banking and finance have been the
major growth drivers with applications—ATM and core banking—driving
numbers. Key projects have been NABARD where system integrators namely,
Wipro, CÃ-Edge undertook to roll out
about 5,000 VSATs for rural branches
of cooperative banks.
Last year PSU banks went slow on
ATM deployment due to a decision of

Market Share

Total Market Size: `500 crore

33.4%
Hughes
Communications

21.4%
Bharti airtel
16.8%
Tatanet
15.6%
HCL Comnet

4.2%
BSNL

92 | VOICE&DATA | JULY 2012 | voicendata.com | A CyberMedia Publication

5.6%
Essel Shyam

MoF to consolidate the ATM procurement across all PSU banks. These statespecific tenders are expected to provide
a major fillip to the VSAT industry, with
a significant portion of the 60,000+
numbers being deployed on VSAT in the
current year (FY13).
Beyond the above, multi cast has
been the major driver for VSAT sales.
Thus, projects leveraging on this one feed
beam to ‘unlimited’ locations at a flat
annualized cost has enabled applications
like digital cinema, distance learning to
leverage VSAT networks.
On the manufacturing and distribution front, VSATs are increasingly being
used as back-up medium for business
continuity.
The oil & gas sector has been a major
driver of bandwidth sales for VSAT service
providers. Tatanet runs a Earth station
based on i-Direct technology which is the
leading platform for this sector.
The VSAT connectivity space has
been dominated by institutional financial
inclusion projects. Reaching out to the
unserved and underserved at a reliable
but an economical cost, leads to VSAT as
the chosen mode of connectivity.
Deployments such as VPN & internet
services in different flavors, varying from
pooled bandwidth to bandwidth-on-demand, is gaining popularity. Availability
of VAI (value added internet) with applications like media, videoconferencing,
tele-education, medicine presents an
interesting proposition for VSAT industry
in the consumer/SOHO segments.
Accelerated VSAT as a product, which is
something new in the market, was built to
kill the slowness of applications on VSAT.
Going forward, bandwidth-on-demand and value added services of airtel
will contribute and drive the demand for
VSAT. Also, with the increasing thrust
on internet penetration in India, we
can look forward to similar trends in
the future.

Innovation at its Peak
3%
Others
V&D Estimates

Many new innovations in VSAT industry were seen in the last year. These
included the ���������������������������
use of smaller antenna for
easier VSAT terminal deployment, use

VSAT

Top VSAT Players in Number Terms (FY 2011-12)
Players

FY11-12

FY10-11

Change (%)

Hughes Communications

55,803

44,500

25.4

Bharti airtel

46,895

43,912

6.8

HCL Comnet

23,922

25,427

-5.9

Tatanet

20,884

16,100

29.7

BSNL

9,269

8,200

13.0

Essel Shyam

2,743

2,728

0.5

Others

3,047

1,980

53.9

Total

162,563

140,867

15.4

Others include: Infotel Satcom, GNFC

Reaching out to
the unserved and
underserved at
a reliable but an
economical cost,
leads to VSAT as
the chosen mode of
connectivity

V&D Estimates

of enhanced CPEs for better security,
throughput and triple-play integration,
use of latest coding for higher bandwidth, mobile VSATs for use in strategic
areas like police, railways, defense, multiple warehouses for faster deliveries, and
installation tools integrated on mobile
phones and iPads.
Even though terrestrial links have
brought down the cost of bandwidth,
there are several areas where shared
bandwidth leads to lesser cost compared
to terrestrial bandwidth. These areas are
e-learning, rural communication market,
banking, oil & gas exploration, e-governance, and healthcare.
The technical modifications required
are those technologies which have a
very strong QOS capability and reduce
the idle bandwidth on the users’ CUG
bandwidth hired by the customer. At the
same time they should also take care that
innovative technology better suitable for
a particular kind of application is used.
These technologies are slowly coming
into the market and being accepted by
the users.

transponders from ISRO to the industry,
latest Ka-band satellites not being available in the country, continuation of the
obsolete ‘Closed User Group’ definition
for VSAT services, etc.
USO Fund is also not being given to
VSAT technology where natural use is
for rural services. Other issues include
permitting ‘open skies’ for free access to
global satellite transponders, permitting
smaller antenna size (0.74 m) for Ku-band
as per international norm, and reduction
of revenue share/service taxes for services
in rural areas.

Market Size (in `crore)
Revenue (FY 2011-12)
5000

250

6.2%

500

471

2011-12

2010-11

Hiccups
Most of the issues being faced by the
industry are a result of government
processes or policies. These include
availability of spectrum from ISRO (Ku,
Ext-C band), severe crunch in getting

0

94 | VOICE&DATA | JULY 2012 | voicendata.com | A CyberMedia Publication

V&D Estimates

Key Trends
As mentioned earlier also, addressing various challenges with innovative
technologies in VSAT industry is bringing
down the cost of ownership and improved
bandwidth on the given spectrum. The
state of technologies which will enable
this are:
 Ka Band: Ka band can be considered the future. It will have very
high bandwidth over VSATs, whose
drastically reduced prices will make
VSAT a competition to the terrestrial
service providers
 Carrier in Channel Multiple Access:
This is a bandwidth saving technology
which exploits the excess power available with the satellites and reuses the
bandwidth again, which effectively is
twice the bandwidth that has been
leased
 Improved Encoders for Broadcast and
DTH Markets: The latest encoders
have greatly reduced the bandwidth
required over the air. This effectively
means better quality of video transmitted with less bandwidth
 SCPC Return with DVB-S2: This type
of combination is suitable for high
bandwidth requirement and also realtime applications, and still be able to
reduce the total cost of ownership.
Akanksha Singh
akankshas@cybermedia.co.in



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