‘Customers do not want to take risk with leased lines due to poor reliability and uptime’ – Vineet Nayar, President, HCL Comnet Ltd.

com-2.jpg (7814 bytes)“Customers
do not want to take risk with leased lines due to poor reliability and uptime.”

–Vineet Nayar, President, HCL
Comnet Ltd.

Vineet Nayar joined the HCL Group way back in 1985 as a
Senior Management Trainee. He has held various portfolios in sales and marketing within
the group before taking over his current mantle in 1994. HCL Comnet being one of the early
entrants in the VSAT industry, Nayar has quite a few experiences to share. Excerpts from a
candid interview to DATAQUEST:

The New Telecom Policy
recently announced attempts to create a level playing field for private ISPs, VSAT service
providers and other value-added datacom players. But what does the industry feel about it?
In our NEW section, Datacom Dais, presented here and in subsequent issues we attempt to
present their viewpoints as well as those of the policy makers. Watch these pages for the
latest and the hottest in the datacom world!!

I see
the situation changing dramatically from one of short supply to excess supply within the
next 3-6 months due to the availability of wider options to VSAT operators.

What are the problems faced by the
industry?

The basic issues for the industry is that the extended C-Band transponder space is still
in short supply. Other problems are in the areas of restrictions placed on
interconnectivity and speed. Also, the VSAT equipment faces a high custom duties.

Has the government done anything to sort
out the problems?

Certainly! The announcement of new telecom policy (NPT) will help the industry to get onto
the growth path. As per the NPT, we can use foreign satellites and Ku Band transponders.
These will solve our problem considerably and so we feel that this is in the right
direction and will provide multiple options to the VSAT provider in the short and long
term. Moreover, even the short supply of extended C band will be over by the end of the
year with ISRO’s launch of INSAT 3B in October 1999. It’s a fast track satellite
with 12 extended Cband transponders. So I see situation changing dramatically from a short
supply to excess supply within the next 3-6 months due to the availability of wider
options to VSAT operators.

Will these changes translate into lower
cost to the users?

The cost reduction will occur if the shift happens from extended C-band to Ku band. The
cost of VSAT equipment in Ku band is lower as compared to the former, however, it remains
to be seen how much will be the actual impact on the users as the final details are not
available.

Will the TRAI’s recent
recommendation on cutting the leased line cost impact on the VSAT industry?

With so many changes in the industry, it is difficult to quantify the impact of leased
line cost reduction at this stage. However, one thing is clear that irrespective of the
cost, customers do not want to take risk with leased lines due to poor reliability and
uptime. On the other hand, no one can dispute the high reliability and uptime of VSATs. So
irrespective of the areas and cost of leased lines, customers hate to put their network on
DoT’s leased lines for mission critical applications. Also, for remote areas, VSATs
are the best option since availability of leased lines is a big question mark.

What are the global trends in the
industry?

In terms of transponders worldwide, the trend is to use mix of bands (C as well as Ku) and
there is a choice of satellites available in most countries. Unlike India, most countries
do not restrict operators to their domestic satellites. No wonder the growth outside has
been very good. On the other hand, on the applications front, they are being increasingly
used in specialised applications such as rural telephony, distance learning and internet
backbones among other growth area. Of course, in the traditional application area like
datacommunication market, the size of the networks is also increasing rapidly. A recent
example is the VSAT network planned by United States Postal Services, which is planned to
go to 30,000 sites.

What are the application areas you are
looking at in the country?

We are looking at areas like internet, training, distance learning, ecommerce and video
conferencing.

How would the removal of CUG restriction
help the industry?

Removing the CUG restriction will enable us to interface with other networks and provide
greater option and flexibility to the end user to utilise the benefits of VSAT technology.
For example, if VSAT interconnectivity is allowed, we can supplement the telecom
infrastructure of the country in many important areas such as rural telephony, distance
learning and internet.

Who are your target customers?
We have a very wide canvas of industries and companies to cater to. The prime contenders
are the companies who have mission-critical applications with network segment spread
across the country. Our target customers can range from manufacturing, financial, banking
to the services sector.

What is your marketing strategy?
Our business plan is based on providing end to end integrated multi-technology, multimedia
networking solutions and services to our customers with the best price-performance ratio
over the life cycle of network. Again the point is not just to supply VSATs but offer
hybrid wide area networks to customers, comprising a mix of satellite, leased and wireless
technologies. Apart from VSATs, we have also ventured into several new application areas
such as network security, ecommerce, messaging, internet access and enterprise management
and are currently providing state-of-the-art solutions and services in these areas.

How do you see the future of the VSAT
industry?

We are living in a fast technology changing environment. We keep hearing of new
technologies being developed across the world. Technologies like ISDN, ATM, FDDI and
others are being deployed and will pose challenges to our industry. No doubt, it will
influence our industry, but I believe that VSATs will continue to be the preferred options
for CUG data, voice and video network due to the flexibility and ease of the last mile
offered by this technology. So in the future, it will be a mix and match of technology,
satellites and terrestrial and hybrid networks that will be be deployed in increasing
numbers.

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