e-Commerce: A successful example is the use of around 6,000 VSATs by ITC Chaupal.

e-Governance: The Central Government, and many state governments have embarked upon the use of VSATs for e-Governance.

e-Finance: Use of more VSATs for ATMs and other banking activities.

Tele-medicine: High potential market, but the high cost of service is a barrier at present.

Internet Broadband Penetration: A recent policy change has cleared the way for commercial service providers to deploy VSATs for proliferation of Internet, and broadband services in rural and remote areas.

Speed Breakers
VSAT services are tied to INSAT satellites. If operators can use any satellite, services will become affordable in a competitive environment. The TRAI has repeatedly said that VSAT is a viable solution not only for rural connectivity, but also for penetration of Internet and broadband in these areas. The government will not be able to meet its broadband targets for 2010 unless it takes bold and radical steps such as the use of satellite technology, which is most suitable for short-term results.

The biggest constraint to growth in rural areas is high artificial cost incurred due to government policies. The obstacles like large distances and inadequate infrastructure can be overcome by access to virtual institutions that provide banking, education, health care, neonatal information, agriculture advice, and so forth. VSATs can play a major role here.

VSAT services in urban areas are taking a beating from alternate technologies. Its future market lies in the rural areas where VSATs can be deployed effectively for Internet and broadband services such as e-education, e-Governance, e-commerce, e-finance, telecom, tele-medicine, and entertainment. VSAT services have to become more affordable in rural areas. It can be used to meet the national objectives for rural upliftment. Any half-hearted approach will stagnate the industry.

Whats in Store
There is a robust demand for both Ku as well as Ext-C band services from various industry verticals, and it provides diversified growth. The key industry segments that are expected to contribute strongly in FY 08 are banking, e-Governance, stock/commodity trading, defense, distance education, and retail. There is a high acceptance of VSATs as a broadband access medium by a much larger addressable market of SMEswhich will provide additional growth compared to the traditional enterprise and government segments. The industry aims at touching 75,000 units on the shared hub in FY 08, and 1,000,000 in three years time.

Like last year, the industry this year is quite enthusiastic about digital cinema value proposition. The value of the Indian cinema market is around $1.5 bn, but 80% of films being made in India do not give the expected returns due to various factors. One of the major factors is the high price on distribution. The industry feels that if cinema could be distributed digitally, it would be a win-win situation for both the industriesno doubt the viewers would be king again.

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 toward VSATs and a cultural mind block prevents mass usage in these segments. Unless volumes pick up, this segment will not be a viable business proposition for service providers.

Gyana Ranjan Swain
maildqindia@cybermedia.co.in

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