WASHINGTON — Providers of Very Small Aperture Terminal (VSAT) satellite services are holding their own in an increasingly competitive communications marketplace by partnering with their ground-based counterparts , finding new niches and expanding their reach in traditional markets.
Rather than trying to compete head-to-head with terrestrial telecommunications firms in all conceivable market segments, VSAT providers are increasingly joining forces with them, according to industry officials and analysts.
“Formerly pure satellite communications companies now find themselves selling DSL and vice versa,” said David Hartshorn, secretary general of the Global VSAT Forum, a London-based industry association.
The reason, Hartshorn and others said, is simple: in some cases, terrestrial solutions make the most economic sense, whereas in others, satellites are the answer. And for a growing number of businesses, experts said, hybrid networks incorporating both satellite and terrestrial capabilities are the preferred solution.
Some VSAT companies are creating specific products and services that incorporate satellite and terrestrial technologies for a variety of business customers. Hughes Network Systems of Germantown, Md., for example, launched its HughesNet Managed Networks service, which targets business customers who want the best of both worlds , according to Hughes spokeswoman Judy Blake.
Recent HughesNet customers include BP Global of London, which has a mix of retail outlets, some of which require satellite connectivity and others that are hooked up to cable or DSL networks, Blake said. Another customer, outdoor merchandise retailer Cabela’s of Sidney, Neb., is using VSAT technology to provide initial connectivity to its outlets while it transitions to a DSL-based network, she said.
Small-enterprise customers, such as companies with anywhere between 100 to 200 employees, want satellite to be part of their communications solution as a backup to terrestrial options, said David Rehbehn, senior director of international marketing for Hughes.
Hybrid networks are critical for another growing market for VSAT service providers: e-government initiatives. These are government -sponsored programs designed to provide broadband connectivity to places such as government offices and rural households. Rehbehn said the majority of e-government projects that Hughes has been involved with have been hybrid networks, because of cost. Hybrid networks make sense, for example, when the project is to bring Internet connectivity to schools; some city schools may be able to use DSL, while rural schools would require satellite connectivity.
E-government projects long been a big driver of VSAT deployments, Hartshorn said. One project he cited, Colombia’s Compartel rural connectivity program, required deployment of more than 9,000 VSAT terminals and hub stations.
“It’s not something new, but what is new is that there are now significant deployments being made which continue to yield very high numbers,” Hartshorn said. And while these programs have been big in regions such as Latin America, Hartshorn said VSAT providers have barely scratched the surface of other promising markets such as Asia, the Middle East and Eastern Europe.
Disaster recovery is another growing market for VSAT providers, as demonstrated by last year’s hurricanes that devastated parts of the U.S. Gulf Coast and knocked out terrestrial networks for days.
Uninterrupted communication is critical during emergencies, and that places a premium on hybrid networks that offer satellite as a back-up option, Rehbehn said.
Hartshorn cautioned, however, that disaster recovery may not always be a thriving market for VSAT providers.
“It remains to be seen to what extent it endurably will be a strong market,” Hartshorn said. “It’s like childbirth; the memory of the pain fades quickly, and with that fading of memory comes a fading of budget.”
While hybrid networks represent an important growth area for VSAT providers, certain bread-and-butter applications, such as corporate training and business television broadcasts, remain almost entirely satellite based.
“I see that trend [of hybrid networks] continuing, but I also see, as I’ve always seen, a market for 100 percent satellite-based solutions for a long time to come,” said Chris Leber, vice president and general manager for the VSAT networks group of ViaSat Inc. of Carlsbad, Calif.
VSAT networks have long been the preferred means by which businesses transport information from one point to a variety of locations .
Some analysts had predicted a decline in demand for one-way VSAT communications services due to the growth of wireless networks , but in fact this segment of the market has been growing in recent years, according to Tim Street, an analyst with San Antonio offices of Frost & Sullivan. Behind the increased demand, he said, are new applications such as digital signage, which uses VSAT networks to broadcast advertising and other material from a business’ central location its retail outlets .