Satellite & Cable

March 16, 2004
Why deny VSAT operators an "Open Sky" policy?

NEW DELHI -- In many areas of business, education and training, the 'world wide wait' is no longer acceptable. Satellites are playing an important role in the global information infrastructure (GII - whether it be for basic telephony, Internet, cellular mobile services, TV broadcasting, distance education, telemedicine, DSNG, DTH, disaster recovery, etc. Next, when it comes to meeting the ever-increasing demand for broadband, satellites fill the breach in the terrestrial broadband infrastructure.

What should we do?

If India is not to lag behind, and wants to keep pace with these global trends, the use and application of satellite technology must be encouraged as much as wireline and wireless technologies. The rural and remote areas, which constitute almost 70 percent of our population, have been neglected in the past 55 years.

According to the present satellite policy for the Internet and broadcasting sector:

• ISPs are allowed to access any satellite, which have footprints over India;
• Broadcasters are permitted to uplink from India in the C-band from any satellite, be it INSAT or a foreign satellite;
• SNG/DSNG operations are permitted in C- and Ku- bands on any satellite;
• The uplinking of the news and current affairs TV channels is permitted in the C-band on any satellite as long as the satellite is coordinated with the INSAT system;
• Even Doordarshan uses foreign satellites for uplinking its programs;
• A large number of foreign satellites that have footprints over India are underutilised. This gives a huge advantage of price negotiation to the operators, who in the ultimate analysis, pass on this benefit to the end user; and
• For security reasons, all operators who access foreign satellites are required to provide the necessary monitoring facility at their cost, and maintain a record of up-linked data for the past 90 days. This is quite understandable.

Now, according to the present policy of the VSAT operators, in contrast to the above, VSAT operators are allowed to access foreign satellites through an indirect route. Department of Space (DoS)/ISRO contracts transponder space on foreign satellites through a tendering process. The first such contract for three years was signed in early 2001 for a price that was over 80 percent higher than the price for space on the INSAT. We are paying the same price in spite of the fact that prices in the international market have moved southward.

Impact of the present policy

In comparison to the INSAT satellites, foreign satellites have more power. This translates into a more cost-effective solution for certain applications, in spite of them being more expensive. Even this could have been better if only the VSAT operators were allowed to negotiate directly with the satellite owners; much more so with the average prices having reduced over the years. What it means is that the end-users have been denied the benefit of possible reduced service charges.

• New-generation satellites permit use of smaller antenna and improved RF equipment. This translates into reduced cost of hardware at the user premises;
• Unlike the policy adopted by ISRO, the foreign operators are amenable not only to sell satellite space in small chunks, but also agree to deferred payments. The VSAT operator can pay in the form of a revenue-share as the network expands; and
• In order to help the VSAT operators and enable them to roll out large/long terms projects, the international satellite operators are willing to adopt a partnership approach.

Review VSAT policy

If Internet operators, broadcasters and Doordarshan are allowed to access foreign satellites, then why single out VSAT operators? Indirectly, it amounts to the government's adopting an "Open Sky" policy for all satellite users, but the VSAT operators.

In this era of liberalisation when the government is removing all stops and allowing free competition in all service sectors to the benefit of the end-users, why this discrimination against VSAT operators and users?

During the past 10 years, the history of the VSAT industry in the private sector has provided highly reliable service (99.9 percent) to practically all sectors: corporate, consumer, industrial goods, FMCG, banking and financial, stock-exchanges, and service sectors. Maximum impact of VSATs has been felt in the rural and remote areas that have hither-to been deprived of any sort of connectivity to the more developed areas of the main land. This is, in spite of the fact that VSAT hardware is expensive (notwithstanding the fact that over the years prices have come down from 10 lakh to less than one lakh); another reason is that the service cost to the user comprises of 20 percent towards satellite space cost, 10 percent towards revenue-share, and 4 percent towards WPC charges.

Since the VSAT sector is one of the major users of satellite space, the Open Sky policy will fuel competition amongst satellite operators. This will ultimately benefit the end-users as it provide more cost-effective solutions via access to new-generation satellites. It would result in reduced hardware costs, as well as service charges.

For India to have a major role to play in the global information infrastructure, wire-line, wireless, and satellite technologies must be given a free hand! The Open Sky policy must be made applicable uniformly to the Internet, broadcasting, and VSAT services sectors.