VSATs going hybrid for new growth

(Satellite News via NewsEdge) VSAT systems have established themselves as a technology ideally suited to corporate networking, enabling a new tier of users to take advantage of the enhanced flexibility the platforms offer.

But the industry has had to respond to a growing competitive threat from terrestrial services, which are expanding their offerings and geographic reach. VSAT operators who best respond to the changing marketplace will take advantage of new opportunities developing in this market.

According to a February Frost and Sullivan report titled "World VSAT Markets," the number of VSATs has been growing steadily, benefiting from traditional applications including corporate networks, point-of-sale and Internet access, plus new applications and target markets such as rural telephony, telemedicine and disaster recovery networks.

But industry executives say growth appears to be limited. According to Frost and Sullivan satellite analyst Max Engel, the future for many traditional VSAT companies most likely lies with embracing terrestrial providers and forming hybrid network offerings.

"It used to be that satellite was special, and the industry still has occasional problems in regard to thinking it [remains so]," Engel says. "It has a certain set of very useful characteristics, and those characteristics make it a powerful tool where appropriate, but if you look at the old VSAT model"&brkbar; it was very much a matter of "Ëœwe will take care of everything.'"

"Yet terrestrial generally has more capacity and is cheaper in many applications, so why spend more to do what you can do cheaply and easily on the ground‾" he adds.

Many VSAT providers have realized and embraced the change, says Jorge Vespoli, vice president of global sales and marketing for San Diego-based ViaSat Inc.

"Why would you call [hybrid networks] the future‾ It's been happening for a while, especially in North America," he says.

"In the market sectors that we focus on, we provide managed [virtual private networks] that use satellite as the core technology. Sometimes we use DSL or other terrestrial technology because there's no satellite or no direct view to a satellite, and we want to offer a fully integrated solution. If satellite is only 1% of the system and terrestrial is 99%, that's bad, but if it's the other way around, that's good," he adds.

Engel says embracing hybrid networks does not mean the end of VSATs - just that operators will adjust their expectations about private networks.