[Satellite News 09-17-10] VSAT executives and analysts traded opinions on the strength and opportunities presented by the global VSAT market at Comsys’ VSAT 2010 event, displaying a wide variety of assessments on the industry’s potential.
    Comsys Senior Analyst Simon Bull told event audience members that VSAT players might find future growth opportunities more difficult to obtain in a market that is seeing competitive threat from other telecoms technologies. According to Bull, trends in the VSAT enterprise market have begun to suggest a saturation of the VSAT market over the past few years. “The market saw 323,000 VSAT units shipped in 2009, and 327,000 booked, a decline in 7 percent in new orders. Once hot regions have seen slowing or declining growth rates. However, inconsistency has been a feature of the market since its inception.”
    While competition is increasing, some satellite executives believe in the potential of the VSAT market to pick up the slack. However, with the emergence of fiber in many countries, it is hard to assess whether this is a good time to be involved in the VSAT industry. “There is an immediately addressable market of around 35,000 vessels. We are seeing rapidly, expanding bandwidth consumption. We are starting to see a lot of initiatives in emerging countries. Countries like Brazil are looking at applications like mobile banking. Energy efficient network infrastructure is needed. Why does every mobile operator have to have its own infrastructure? They could share infrastructure. VSAT can help provide solutions to help mobile operators,” Comtech Senior Vice President of Strategic Market Development Daniel Enns said.
    Not everyone was cautious on VSAT. According to some satellite executives, the best hope for VSAT services going forward lies with the emerging markets, even though there have seen aggressive rollouts of fiber. “In the early part of the decade, Latin America rolled out sea cable, which was perceived to be doom and gloom for the satellite industry,” said Simon Gatty Saunt, vice president sales, Europe and CIS, SES World Skies. “Transponder prices became very low in the first part of the decade. Ten years on, the satellite market has re-invented itself in Brazil. The point-to-multipoint VSAT networks are flourishing. The emergence of fiber in urban centers has contributed to the demand for connectivity in rural areas. Brazil has a large VSAT segment driven by rural connectivity, enterprise projects and oil and gas networks.”
    Saunt was one of the most optimistic speakers at Comsys, highlighting numerous opportunities for satellite players like SES World Skies in the VSAT market. “(We are seeing) a lot of projects using a combination of satellite and fiber. There are a number of government-sponsored programs for schools in Brazil, for example. We see similar trends in Argentina. We have seen a huge increase in demand for VSAT services in India. Satellite is supporting e-government solutions, tele-medicine, rural connectivity and backhaul. There are 600 million mobile subscribers. They are adding 15-20 million mobile subscribers per month in India. A lot of this will require satellite. India is similar to Brazil. There will always be a place to satellite. We see strong volume growth in all parts of the market.”
    Saunt even argues that influx of fiber into Africa has perhaps been a good wake-up call for the satellite industry. “We think fiber has added to the demand. Satellite operators are putting inclined satellites in Africa, allowing satellite to compete better with fiber. Traditional VSAT operators are buying fiber as well as satellite. Fiber has its shortcomings. Fiber networks have gone into East Africa. We have heard customers have had some delays. We are seeing strong demand for government and digital divide projects. Fiber acts as a stimulant for satellite. We also want to bring down the costs of satellites that can support VSAT networks.”
    However, there may still be some interesting opportunities for VSAT players even in established markets. “The managed network services market is growing. VSAT networks in the United States are being used as the back-up, as well as the management side to it. The common denominator of these networks, the sites we serve currently, they are a mix of primary communications, sites that are connected to both satellite and DSL. We are optimistic for the future of VSATs,” said Amiram Levinburg, CEO, Gilat Satellite Networks.
Andrew Wallace, Eutelsat’s new chief commercial officer, is also optimistic that the VSAT market will remain resilient. “We don’t see a softening of demand from data customers. Global data traffic is taking over from global voice traffic.”