[Satellite News 09-21-09] Comsys senior consultant Simon Bull sent a warning about capacity pricing to VSAT operators at the analyst firm’s VSAT 2009 event in London.
    Bull told Satellite News that while the industry was robust, capacity was the industry’s biggest weakness. “Scores will be settled when bandwidth becomes available. Some operators may end up regretting decisions. [VSAT operators] see satellite operators behaving in the same way as banks and making money their God. Space segment operators could be made to feel the consequences when the boot is on the other foot,” he said.
    Despite the warnings, Comsys painted an upbeat picture of the VSAT industry as a whole, highlighting the 2008 performance which saw the sector rake  in $5.4 billion and shipp 380,000 terminals. “Rural telephony is off the agenda, but rural connectivity is on the agenda. We are seeing evidence of companies in Russia looking at their business. We also see strong demand from the banking industry. For example, banks are by far the largest buyers of VSATs in Nigeria. Mining is also seeing strong demand across the world,” Bull said.
    Mike Cook, senior vice president of Hughes Network Systems, also was optimistic. “The industry is light years ahead of where we were a few years ago. We are at the points of technology and efficiency that we could not dream of 10 years ago. You are seeing revenues at record levels. We see tremendous improvements in architectural flexibility, as well as tremendous improvements in [adaptive coding and modulation], enabling us to maximize the ability of the individual terminal,” he said.
    According to Cook, adding new services is key to the Hughes success. “We have shipped more than 1.9 million VSAT terminals. The most interesting part of the business is the expansion of the scope of services we offer. The customer is looking for more than simple connectivity. They are looking for a range of services. We have been able to respond to that. Today, we offer a whole range of services which encourages them to feel part of the HughesNet community,” Cook said.
    David Bettinger, CTO of iDirect, agreed that flexibility was the key for VSAT operators. “Mobility is a major focus of what we are seeing. Military [personnel] are using VSATs more than ever. The clear thing we are recognizing is that these diverse applications are becoming more important. There are more challenges for service providers. The consumer VSAT market is the largest part of the market, but the easy pickings of the VSAT market are gone. You cannot ignore mobility and maritime,” he said.
    Amiram Levinberg, CEO of Gilat, said one of the challenges facing the VSAT industry is whether to try and compete or complement terrestrial alternatives. “Terrestrial communication is continuing to expand and the satellite industry is under constant pressure. There are two alternatives to either competing with terrestrial or complementing terrestrial. There are many diverse customer needs, network topologies and multiple applications. Direct competition with terrestrial is viable, but complementing terrestrial maybe a better approach,” he said.
    According to latest Comsys latest research, Hughes Network Systems still dominates the VSAT market, followed by Gilat Satellite Networks and iDirect.