After years of slow development, corporate networking using Very Small Aperture Terminals satellite technology is set to take off in Europe, with major implications for telecommunications operators. That is the finding of The European VSAT Handbook, a report by Cambridge-based telecommunications consultancy Analysys Ltd. The report finds the surge towards VSAT has been driven by regulation changes, lower costs and technological improvements, prompting a ‘more positive’ marketing strategy by operators and service providers. In practice, says the report, the European Commission has pushed ahead with the liberalisation of the VSAT market faster than for any other sector of telecommunications. Once implemented, its regulatory programme will provide the European Union with open markets for both infrastructure and services, reports the consultancy. The governments of France, Germany, the UK and the Netherlands are said to be in the forefront of liberalisation, having signed a one-stop shopping agreement for satellite service providers last year. By putting satellite on the fast track to liberalisation, the European Union has forced a change in attitude in telecommunications operators vis-a-vis VSAT, states the report. While most telecommunications operators operate satellite hub systems, they have hitherto been content to pursue a ‘largely negative’ strategy with regard to VSAT. This has mainly been a matter of attempting to restrict the encroachment of VSAT into their terrestrial network revenues. The fact that the market sectors in which VSAT have been successful, such as business television and one-way data broadcasting, have made little impact on telecommunications operators, has entrenched this attitude, states Analysys.
Changed the picture
But, says the report, liberalisation, together with the geographical reach of satellite, and the advent of competitive service providers, such as Unisource Satellite Services and MCI Telecommunications Corp, have changed the picture. Service providers prepared to market very small aperture terminals as a business communication system have meant that telecommunications operators must react to competitors targeting their prized multinational corporate clients. The activities of VSAT service providers in provision of videoconferencing and global or multi-region service coverage are seen by the telecommunications operators as a particular threat. Customers wishing to experiment with Asynchronous Transfer Mode, for instance, may be encouraged to try a VSAT service in the absence of any available terrestrial service from the telecommunications operators, says Analysys. Telecommunications operators can act to protect their terrestrial network interests by competing on price, but this will hurt. Analysys concludes that for those offering very small aperture terminal services, there is both a business opportunity and a chance to gain some experience of operating pan-European networks.
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