by Katie McConnell

There was a time when some telecommunications analysts proposed that VSATs were an interim product that would eventually be replaced by terrestrial solutions like coaxial cables and fiber optics. But those people were wrong. Very wrong. VSATs are everywhere. Today, there are approximately 300,000 VSATs around the world, compared to just 800 in 1984 when the first interactive VSATs were installed.

From credit card authorizations to inventory control, VSATs provide the technological capability for many businesses to thrive in today’s fast-paced environment. Add voice and video to the data needs of businesses, and one can easily see why VSATs are a mainstay.

And once the Ka-band systems are launched, industry experts predict that not only will the C- and Ku-band VSAT systems continue to thrive, but a new generation of VSATs will arise.

Ka-Band and VSATs

Just as the introduction of two-way capability jumpstarted VSATs’ proliferation into the worldwide telecommunications marketplace, the promise of Ka-band systems such as Teledesic, Spaceway and Skybridge is expected to push these very small aperture terminals into even more businesses, and eventually consumers’ homes.

Now, some people will say the earth stations that are going to be used for Ka-band are not VSATs. Well, that’s simply not true. Yes, the terminals will most likely have a more marketing-friendly term so they will be easily transitioned into the consumer marketplace. The new generation terminals, however, will be small, two-way units evolved from their VSAT ancestors.

For instance, Simon Bull, senior consultant of Comsys, notes that Hughes Network Systems (HNS), which already has garnered nearly 50 percent of the VSAT market, is researching and ultimately developing the ground segment for the Hughes’ Ka-band system, Spaceway. The system will comprise eight geostationary satellites, allowing users to transmit and receive video, audio, multimedia and other digital data at uplink rates between 16 kbps to 6 Mbps. Operating in the Ka-band spectrum, Spaceway will consist of interconnected regional satellite systems providing service to nearly all the world’s population. The Spaceway terminal, Bull says, is going to be a VSAT. It may be marketed as something else, he notes, "but ultimately it will deliver data-based services direct to customer premises by satellite."

Ka-band will expand upon the current capabilities of VSATs. Today’s VSATs are usually networked to communicate with a main hub, otherwise known as a star configuration. Since the switching will often take place on the actual satellites in a Ka-band environment, VSATs will be able to communicate with each other through a mesh configuration.

"In the Spaceway architecture, each VSAT has full-mesh connectivity or VSAT-to-VSAT connectivity," says Paul Gaske, senior vice president and general manager of the broadcast products division for HNS. "The earth stations for Spaceway are advanced. They will include the capability of VSATs, as well as additional capabilities like video conferencing."

Teledesic’s Jim Miller, director of the user equipment alliances division, agrees VSAT technology will be a large part of his company’s Ka-band system. Teledesic is the planned, global, broadband satellite system founded by Craig McCaw and Bill Gates. Dubbed the "Internet in the Sky," the LEO system is expected to consist of 288 satellites, operating in the Ka-band. Miller notes the user terminal will be a more advanced VSAT than what is currently available. "Teledesic user equipment will incorporate much more intelligence and routing capability than a traditional VSAT," he says. "Our user equipment will operate more like a terrestrial router-with the addition of a wireless interconnect to the Teledesic network."

Teledesic is, however, considering both VSAT terminal manufacturers and non-VSAT manufacturers for the company’s user equipment alliance. "VSAT manufacturers possess many of the capabilities and experience necessary for manufacturing low-cost, high-volume Teledesic user equipment," he says. "It seems to be a natural progression for the VSAT industry."

It’s Raining, It’s Pouring…

But what about rain fade? As virtually any satellite engineer will tell you, the Ka-band systems’ higher frequencies are much more affected by rain fade than current C- and Ku-band systems. Some experts are suggesting that it will be impossible to overcome the rain fade. But others are not so sure.

Tom Robey, director of marketing for Scientific-Atlanta, says that while rain fade may be a problem, it can be overcome. "There is some physics involved that we can’t change," he notes. "Water vapor and water droplets in the atmosphere absorb the energy of the signal. It just so happens that more energy is absorbed at Ka-band than at Ku-band. There may be creative ways to minimize the effects on the overall network, but it will take some time to determine what techniques will mitigate those effects." Scientific-Atlanta has developed a good understanding of rain fade, according to Robey, through its work with NASA and Iridium. In addition, "we expect to participate in some of the next generation, Ka-band systems," he adds.

However, Robey expects the issue of rain fade won’t disappear for at least two to three years. "We are certainly looking at Ka-band because demand for bandwidth is going to require another solution eventually," Robey says. "But, how do we get around the problem of rain fade? We know how to do it with Ku- and C-band technology. We need to figure out how to do it with Ka-band, because if one of our customers has a grocery store and a rainstorm prevents the store from processing transactions for five minutes, that’s a real problem."

He and many others in the VSAT industry agree the onward momentum for Ka-band systems cannot be thwarted by a little precipitation. Take for example a gas station owner in London, England. Perhaps she offers services that are available at many gas stations today, such as pay-at-the-pump, ATM, credit card authorization and lottery services. And perhaps all those services are linked via a Ka-band system. And then pretend the inevitable happens-it starts to rain. Suddenly, her customers can’t get gas, money, cigarettes or lottery tickets. If she suggests that everyone just wait until the rain stops, she will be laughed right out of business. Thus, if a little rain continues to be problematic for Ka-band transmissions once systems are deployed, it will be disastrous.

Because today’s current earth station technologies cannot overcome rain fade in the higher frequencies, there are many industry prognosticators who predict Mother Nature will spoil the Ka-band systems and VSAT manufacturers will not be able to outsmart her. But, as Bull notes, "I’ve learned to never say never."

For its part, Hughes is betting $1.4 billion that a little rain won’t stand in its way. "We have very advanced coding and power control schemes, and our transmission margins for rain fades will be increased to handle Ka communications," Gaske says. "Both of these items will be implemented to achieve the same performance as the Ku systems today."

The Manufacturers

The manufacturers of today’s VSATs are expected to remain the VSAT manufacturers for tomorrow’s broadband systems. Just as Hughes dominates the marketplace by manufacturing approximately 47 percent of the world’s VSATs to date, Bull expects the company will stay in the forefront as new systems come online.

Gilat is the second largest VSAT manufacturer, capturing 40 percent of the market, followed by Scientific-Atlanta and NEC, who claim 5 percent each.

HNS already offers broadband capabilities, including digital television and file delivery in addition to "normal" VSAT applications such as credit card authorizations, data lookup, etc., according to Gaske.

In addition to its two-way, interactive VSATs that can offer outbound rates up to 24 Mbps, HNS offers DirecPC services. DirecPC is a satellite-based, broadband service that offers access up to 400 kbps via a 21-inch, elliptical satellite dish.

In addition, the company offers a combined service of DirecPC and DirecTV that gives users access to all the multimedia applications available on DirecPC, but also the hundreds of video channels on DirecTV. And the applications provided by the Spaceway system also will bear a variation of the ‘Direc’ name.

According to Gaske, the initial Spaceway service will include next-generation DirecPC broadband Internet services and the DirecWay family of high-bandwidth VSAT services. Furthermore, current HNS customers, many of whom are Fortune 500 companies, will have the opportunity to transition to Spaceway.

Gilat expects its current VSAT systems to transition into Ka-band ground stations. "There is not much difference between the products in Ka and Ku," says Yoram Zylberberg, director of Internet products an services for Gilat. "The only part that needs to be replaced is the outdoor unit." However, Gilat intends to only manufacture products for Ka-band services that are in geostationary orbit.

"We are not working in the area for nongeostationary satellites," Zylberberg says. "We are focusing on private networks and vertical markets."

Two products Gilat currently manufactures that are expected to evolve into VSATs for broadband applications are the Skysurfer and the Skyblaster.

The Skysurfer VSAT delivers broadband video and data directly to the LAN or desktop, using the latest DVB standards. Skysurfer provides a hybrid solution for broadband corporate communications delivered over satellite, with the return path using any terrestrial connection or existing Intranet.

The Skyblaster is based on the same infrastructure as the Skysurfer, but uses a PC-based satellite transmitter as a return channel. User equipment includes two VSAT cards in the PC. One is a receiver card and the other is a transmitter card. "It is the first time that anyone has introduced a PC-based, two-way VSAT," Zylberberg says. "A lot of companies have PC-based receivers-systems that are capable of receiving information via satellite and sending back by a terrestrial path. But Skyblaster can send information back and forth to and from the PC, using a satellite channel."

According to Scientific-Atlanta’s Robey, "Virtually all of our new customers want more bandwidth for IP (Internet protocol) enabled applications." To satisfy this demand, Scientific-Atlanta now offers VSATs with TDMA, DAMA and IP. In addition, the company is investigating the specific needs required in the ground segment portion of Ka-band systems.

Bull, along with many in the VSAT and Ka-band industries, believe that "VSATs are ideal for Ka-band systems." He adds that as technology has with other systems, the "Ka-band technology will get better and better."

The Spectrum Conundrum

According to some experts, we have a glut of satellite spectrum. According to others, it is a resource that is quickly dwindling. Companies that are planning to launch new satellite systems are putting their money on the latter theory that more spectrum is needed. Specifically, they are betting the demand for broadband applications will deplete our current resource of spectrum.

The new broadband applications, which in large part are expected to be provided by the Ka-band systems, will take the VSAT market to a new level. However, that is not to say Ka-band systems will leave the current VSAT systems in the C- and Ku-band behind. Nile Rudd, a consultant with Comsys says, "What will Ka-band do to the current VSAT networks in the C- and Ku-band? Nothing."

Rudd, who is author of The Broadband Report, says the first customers of broadband services will be corporate.

Following that market sector, small-to-medium enterprises (SME) are expected to adopt broadband applications. An SME, according to Comsys’ definition, is a business that comprises 200 or fewer people. Today, there are approximately 2.5 million SMEs in the world. That number is expected to rise to 24 million by 2005. "Going beyond 2010, we will be approaching 100 million SMEs in the world," says Bull.

Following the SME market, Comsys expects the SOHO (small office, home office) will purchase satellite-delivered broadband services.

Finally, in approximately three to five years after the first systems are deployed, Bull expects consumers will start buying VSATs for Ka-band services. Before that happens, however, "the VSAT terminals have to get below $1,000." Some experts are predicting that could happen as early as next year. Others believe it will be another three to five. But, all agree, the price for VSAT terminals will drop and one day be as popular, if not more popular, than the DBS dishes in the consumer marketplace.

Katie McConnell is senior editor of Via Satellite.

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