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Gilat Satellite Networks CEO Amiram Levinberg said the company’s deal with CAT Telecom Public Co. Ltd. to supply a Gilat SkyEdge 2 broadband satellite network to serve rural locations throughout Thailand is significant as it shows it ability to win deals in Thaicom’s home territory.
This is the second deal Gilat has secured in Thailand recently, which is proving to be a profitable market for the company in 2009. In March, Gilat signed a deal with Nera Telecommunications Ltd., a solutions provider for transmission, satellite communications and infocommunications, to provide a SkyEdge 2 network that will be used to serve a government organization in Thailand. The platform also has mesh capability, enabling direct connections to be set up between two VSATs where communication traverses the satellite only once in each direction. The deal with CAT, announced June 16, sees CAT deploy VSATs to provide rural citizens with telephony and broadband Internet access at public call offices nationwide as part of a Universal Service Obligation).
“These are quite unique considering IPStar is such a strong player in Thailand, sot means that even though IPStar is local, there is room for different technologies," Levinberg told CommunicAsia E-Daily. “In one case, one of the deals was based around meshed connectivity. In the other case, with CAT, it is a rural telephony type deal. These are unique solutions and will see two new hubs going into Thailand. These are standard type deals. We sell many hubs to many networks, but we see these deals as unique, as we have sold them on the home ground of IPStar.”
There also is strong demand in other parts of Asia. “India is a huge market for us, but the margins are not great. In terms of numbers of VSATs, it is huge. Satellite capacity is an issue in the Indian market. It is the same situation in Australia, but in these two countries there are significant opportunities for us in Asia,” said Levinberg.
Gilat also hopes that new technology it is showcasing in the cellular backhaul arena will prove popular among operators. The Ericsson GSM MiniSite, a fully-integrated package for remote BTS sites, incorporates Gilat’s satellite backhaul technology, integrating a Gilat VSAT into a GSM Pico Site. Gilat claims this new solution enables operators to cost-effectively expand coverage to remote areas which could have been viewed before as not commercially viable.
“This is really the next phase of GSM deployment and reaching the next billion customers,” Levinberg said. “Looking at a total-cost perspective, everything counts. It is rural, low density and power is an issue all the time. We see this as one more enabler to meet these areas with GSM coverage. Capacity is a scarce resource and very expensive.”
Gilat derives around 15 percent of its overall revenues from Asia, and Levinberg does not expect to see a fluctuation in this figure in the short-to-medium term. However, with a global economic recession beginning to bite, Gilat could be in for a tough year.
“At the end of the day, the dominant part of our business is selling infrastructure. The economic conditions mean we have been selling less infrastructure, and there have been less deals to be had,” he said. “We have gone through a small restructuring process. However, since I have been in the company, it is nothing like the turmoil of 2000-2001, so you have to have some perspective in how big the turmoil is. The satellite industry is more stable than other industries. We have also had one big issue not really related to Asia at all. We have a contract with the government of Colombia, which has been resolved positively for us and this will impact our revenues in a good way.”
Problems in the U.S. economy have had an impact on Gilat. “You probably notice the economic situation less in Asia and Africa than other parts of the world. Having said that, we saw the United States at the center of the turmoil. It is a terrible time. Everything is much slower for us in the United States Luckily, for us, none of our customers are in any specific difficulties,” Levinberg said.
This is the second deal Gilat has secured in Thailand recently, which is proving to be a profitable market for the company in 2009. In March, Gilat signed a deal with Nera Telecommunications Ltd., a solutions provider for transmission, satellite communications and infocommunications, to provide a SkyEdge 2 network that will be used to serve a government organization in Thailand. The platform also has mesh capability, enabling direct connections to be set up between two VSATs where communication traverses the satellite only once in each direction. The deal with CAT, announced June 16, sees CAT deploy VSATs to provide rural citizens with telephony and broadband Internet access at public call offices nationwide as part of a Universal Service Obligation).
“These are quite unique considering IPStar is such a strong player in Thailand, sot means that even though IPStar is local, there is room for different technologies," Levinberg told CommunicAsia E-Daily. “In one case, one of the deals was based around meshed connectivity. In the other case, with CAT, it is a rural telephony type deal. These are unique solutions and will see two new hubs going into Thailand. These are standard type deals. We sell many hubs to many networks, but we see these deals as unique, as we have sold them on the home ground of IPStar.”
There also is strong demand in other parts of Asia. “India is a huge market for us, but the margins are not great. In terms of numbers of VSATs, it is huge. Satellite capacity is an issue in the Indian market. It is the same situation in Australia, but in these two countries there are significant opportunities for us in Asia,” said Levinberg.
Gilat also hopes that new technology it is showcasing in the cellular backhaul arena will prove popular among operators. The Ericsson GSM MiniSite, a fully-integrated package for remote BTS sites, incorporates Gilat’s satellite backhaul technology, integrating a Gilat VSAT into a GSM Pico Site. Gilat claims this new solution enables operators to cost-effectively expand coverage to remote areas which could have been viewed before as not commercially viable.
“This is really the next phase of GSM deployment and reaching the next billion customers,” Levinberg said. “Looking at a total-cost perspective, everything counts. It is rural, low density and power is an issue all the time. We see this as one more enabler to meet these areas with GSM coverage. Capacity is a scarce resource and very expensive.”
Gilat derives around 15 percent of its overall revenues from Asia, and Levinberg does not expect to see a fluctuation in this figure in the short-to-medium term. However, with a global economic recession beginning to bite, Gilat could be in for a tough year.
“At the end of the day, the dominant part of our business is selling infrastructure. The economic conditions mean we have been selling less infrastructure, and there have been less deals to be had,” he said. “We have gone through a small restructuring process. However, since I have been in the company, it is nothing like the turmoil of 2000-2001, so you have to have some perspective in how big the turmoil is. The satellite industry is more stable than other industries. We have also had one big issue not really related to Asia at all. We have a contract with the government of Colombia, which has been resolved positively for us and this will impact our revenues in a good way.”
Problems in the U.S. economy have had an impact on Gilat. “You probably notice the economic situation less in Asia and Africa than other parts of the world. Having said that, we saw the United States at the center of the turmoil. It is a terrible time. Everything is much slower for us in the United States Luckily, for us, none of our customers are in any specific difficulties,” Levinberg said.
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