‘I think that the government is very clear on continuing to use the extended C-band’ – K Ganesh, CEO, Bharti BT Satellite Communications Services.

-K Ganesh, CEO,
Bharti BT Satellite Communications Services.

AK Ganesh’s, CEO, Bharti BT Satellite
Communications Service, entire 14 years of working life have been spent in the IT
industry. Ganesh took over his current job role in January 1998. A graduate from IIM
Calcutta, Ganesh joined HCL-HP and during his five years of service held several key
positions including that of Regional Manager, Northern Region. Later he joined IT&T, a
multi-divisional computer company. His seven years at IT&T saw the company emerge as
one of the top multi-vendor service companies in the country. Ganesh is also a visiting
faculty member at Jamnalal Bajaj Institute, IIM (Calcutta) and IMT (Ghaziabad) teaching
management courses. Recently, DATAQUEST spoke to Ganesh about the various issues affecting
the VSAT industry. Excerpts:

Considering the bandwidth crisis in
your industry, what was your performance in the last fiscal?

The last year was a good year for the industry
and us. Our estimate is that the industry grew by 60% while we managed about 100%. Of
course, this is not a free growth but restricted growth because of lack of transponder
availability to the industry and the general economic recession.

If the prime commodity for your
survival, bandwidth, was in short supply, how did you manage such growth levels?

Though it may sound ironic but despite the
bandwidth crunch we did cruise comfortably. When Insat-2D went down into the sea, it
virtually killed the industry. Though the government has realized half of a quarter
transponder in March 99, we have been rationing our spare bandwidth from the first quota.
Since the failure of the Insat-2D, the entire industry had become choosy with bandwidth
hungry applications being put on the backburner. We saw the deployment of a lot more
TDMA-based VSATs, a low-bandwidth user, compared to PAMA or DAMA. Hence the growth despite
the constraints.

Do you see the bandwidth crunch
continuing for long and affecting your growth?

I see that situation improving after the
launch of Insat 3B, except around November-December 1999. In terms of growth we are
looking at a figure of about 40%.

However, this fiscal, too, will see
constrained growth, as the Insat-3B bandwidth is expected to be available only for three
months. Of course, we are not taking into account the delays in the launch of the
satellite. I feel that the chances of delays are remote as ISRO has learnt a lot with the
last few successful launches. As a back-up measure, in case there is some kind of delay,
we are hoping that the government would open up the Ku-band for the industry. Also, with
the current availability of half of a quarter transponder, we would be able to insulate
ourselves with the vagaries of the Insat-3B not being successfully launched.

So we do have some fall back option with the
Ku-band and we would be going full stream on this band in case of the Insat-3B failure or
deferment.

Do you see, any delay in the policy
allowing Ku-band if a new government comes to power after the elections?

On the Ku-band policy, I feel this is in the
last stage of finalization, and we can expect some concrete policy decision in the next
few months. I don’t think that this is such a major issue, which could raise much hue and
cry amongst the political parties. Of course, till the time it actually gets converted
into a policy, it is anybody’s guess what and when the same is going to happen. However we
are hoping that between Insat-3B and the allowing of Ku-band, at least one will see the
light of day and get a fresh breath of relief.

Are you facing any other problem apart
from bandwidth scarcity?

Bandwidth continues to be the main problem
area for us. Apart from this, the other minor irritants are restrictions on using VSATs
for internet traffic. Others have been more of a regulatory nature like the 64Kbps
restriction. The 64Kbps restriction is a four-five year legacy. Maybe at that time it was
fair enough, as the technology was not so advanced and hence the need was not there. Today
the need and the technology is there and the government should do a rethink on this.

The other artificial restrictions like closed
user group (CUG) and lack of interconnectivity between PSTN and VSATs network are putting
unnecessary hurdles in the growth of the industry.

The leased line cost is coming down but our
license fee continues to be at Rs55,000 per VSAT. We feel that there should be a
rationalization of the license fees as well.

What we are looking forward to is for a
boundary-less telecom world wherein there are no such restrictions, apart from security
constraints.

According to many people in the
industry, the government has forced the extended C-band on the industry. Do you also feel
the same?

Though debatable, I think that the extended
C-band has been the right decision for India. Most parts of the country experience heavy
rainfall. Take the example of Mumbai. Every VSAT network has a VSAT in Mumbai. In the city
you cannot use a Ku-band because of the rains. What happens is that during the rains the
frequency goes down or rain-fade and affects the network badly. If we have to use a
Ku-band, we would have to pump in more power. This would be the case in many parts of the
country. So in effect, the cost reductions possible with the use of Ku-band would be
offset with the use of more power and poor quality inputs. I think it just balances out.

Why is extended C-band particular only
to India?

It is interesting to note that extended C-band
is only particular to India. The interesting question is how do people use Ku-band or
C-band in other countries with similar climatic conditions. The answer lies in good
terrestrial network, specially the leased lines. The leased lines are easily available and
reliable. So what happens in a country like Mexico, with Indian-like conditions, when the
system senses that the signals are fading because of the rainfall, it will automatically
switch to the leased line, connect to the nearest station with clear frequency and uplink
it from there. This can be replicated in India. For example, I can put a Ku-band dish in
Mumbai and during rain fade, it will switch to a Pune leased line, where it may not be
raining and uplink from there. Technology-wise it is possible to design these into the
system. So India too can exploit the advantages of the Ku-band like smaller antenna and
lower cost, if it has some fallback option in leased lines. However, India lacks a good
terrestrial network, specially the leased line infrastructure, which has been unreliable,
unavailable and expensive and hence the government decided to go in for the extended the
C-band. The other major reason for the decision of having extended the C-band is due to
the strong terrestrial networks like the Railways and Power. The advantage of an extended
C-band is that there is very little interference by these networks. However if one is to
use the C-band or Ku-band, the chances of interference is very high which can affect the
industry very badly. If I am to put up a VSAT network, constantly interfered into by the
railway or the power lines, I would have no choice but to stop the network as nobody is
going to stop the railway network. Hence I feel that the government’s choice of extended
C-band was very positive but the only unfortunate thing was that we went without a backup
plan for any eventualities.

So where did the government go wrong?

And is it planning to correct its past mistake
of only allowing an extended C-band? The government had no provision for any back-up or
contingency plan. So the industry landed up in dire straits as we had nowhere to go.
Ku-band was not allowed and no other satellite had extended C-band capability resulting in
the crisis.

However, we are confident that the government
is not going to commit the same mistake again. ISRO has shared its plans with us and it is
clear that they have realized that they need to have some kind of back-up or fallback
options for each of these eventualities. I think that in the next one and a half years we
will have enough fallback in the system that even if the satellite goes down, we will
carry on with business as usual. For example, the Insat-3B will have 12 extended C-band
transponders. This will be enough for the whole industry for at least the next two years.
Also, next year the government is planning a few more extended C-band transponder
launches.

Why is there so much of confusion
about the VSAT installations in the industry?

My feeling is that most of the companies do
not make the basic differentiation between shared and dedicated/private hub and this is
where conflict is created. A dedicated hub would imply big network installations like RBI
Infinet or the Maharashtra government’s disaster management network. They will get their
own transponder space directly from DoT and import their hub from major equipment vendors.
For example, since we are only servicing the Maharashtra government’s VSAT project, it
does not add to our VSAT numbers. It is not our transponder and hub that is being used by
the government. On the other hand, any number of customers who are sharing my transponder
and hub are real numbers for us. So it is important to make the distinction and any
company not doing the same is not giving the correct picture about itself. l

What is the government stance on
opening up of new areas like broadcast applications or internet applications?

We are talking to the government on one point
at a time. Right now the talks revolve around getting over the transponder crisis and
allowing the Ku-band. The above areas are futuristic and right now what is affecting us is
the basic survival of the industry or bandwidth availability. We don’t want to confuse the
government with a wish list of other things when the basic needs are not in place. Closest
to the basic needs are the removal of the 64 Kbps restriction and allowing VSAT for
internet.

How will cutting down of leased lines
affect your business in the short term?

In the short term, I feel that it will not
affect Bharti-BT very much. One reason is that our focus in on TDMA and data-communication
and not on voice communication. We have very few pure voice networks, which can be
substituted by leased lines. More importantly, since our networks are large data networks,
you cannot replace them with leased lines. Also, as of now, leased lines have two inherent
disadvantages – availability and reliability. Since uptime on leased lines cannot be
guaranteed and we are giving a 99.95% uptime guarantee, it will continue to be in use for
implementing enterprise wide or wide area networks.

Moreover, companies have implemented
VSAT-based solutions despite being much more expensive than leased lines. And I don’t see
a switch to leased lines with the reduction in the cost of leased lines as their cost was
never a reason for buying VSAT-based solutions.

What about the long-term impact of
leased line cuts?

No doubt, in the long term the existing
disadvantage of availability of leased lines can be handled. But the reliability issue
will take a longer time frame to be corrected. I see around 3-5 years for both these
issues to be corrected to give some kind of guaranteed performance. Again, after that I
see a co-existence of all the networks. What can be predicted is companies between metro
and semi-metro areas using leased lines and satellite network between remote places.
Alternatively, corporates maybe using VSATs for back-ups for leased lines as the running
cost of leased lines will be much cheaper relative to the VSATs.

Do you see the trends in India on
similar lines as the developed nations?

In the US and Europe, for example, leased
lines have a very good reliability and availability with lower cost. It is co-existing
with the VSAT network. But the moment you talk of business broadcast or broadcast TV or
application requiring one point to multiple point broadcast, then VSATs are the best
option. In these economies, people don’t make decisions based on the cost, reliability or
availability but the application and usage of a particular medium. Abroad, the distinction
is based on whether one wants a permanent connection (leased lines) or momentary burst
connection/ broadcast application (satellite connection). In India, the distinction has
not existed because of poor terrestrial infrastructure, non-availability and unreliability
of leased lines. I think in 3 to 5 years when leased lines overcome all these problems, we
would have evolved into a model like the US or Europe.

What are the areas and applications
you are looking at in the coming years?

Since the last one to two years we have been
focussed on niche application areas like ERP implementation on a WAN, typically
manufacturing companies. We are providing facilities like management services to our
customers. We have implemented a TNG Unicenter in our hub and we can manage the network of
our customers. Thirdly, we are offering VSAT services outside India. Recently we did a
project for the Czech Republic and installed a hub for a Bharti-BT project. We are
exploring similar opportunities across India and outside.

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