"For the VSAT industry to flourish, bandwidth scarcity issues must be dealt with at the highest priority." Shivaji Chatterjee, Vice President, Hughes Communications

Today, about 40 percent of the business volume is driven by banking. Financial inclusion is one of the major objectives that the government is working on and the Reserve Bank of India (RBI) has envisioned that every village with a population exceeding 2000 should be covered either by a bank branch or through a business correspondent (agent) by 2012.

Both public sector and private banks are working toward setting up branches and ATMs in the rural parts. Also, with trends like mobile banking, which uses satellite services, and increasing deployment of retail kiosks, the VSAT business is set to grow further. Currently, India has around 89,000 ATMs, far lower than China's over 200,000 ATMs. For these applications, security is a very important criterion.

VSATs are fast-replacing routers and provide IPSec for the ATMs and bank branches. On-the-move mobility has come up especially in the defense, government, and the oil and gas sector. Currently, every submarine and ship has a VSAT. Technologies like Doppler compensation enable voice, data, and radio communication to take place anywhere - be it sea, air, or ground.

On leveraging NLD license

Hughes approaches NLD service, using its unique differentiated positioning of a niche, value-added services player. As opposed to telcos, Hughes is not looking at the mainstream commoditized market but is offering differentiated services like satellite-based backhauling to help companies in 3G extend their reach - both on contribution and distribution sides. The company will also be providing terrestrial and RF-based MPLS VPN services to its customers to offer them an integrated MPLS solution over both terrestrial and satellite technologies, which is a big requirement currently. Hughes will also partner with telcos for the terrestrial infrastructure.

On the e-governance project

Currently, about 9000 CSCs are operational on HCIL's hub. The company was recently awarded an order by a special purpose vehicle (SPV), CSC e-Governance Services India, on behalf of the Department of Information Technology to connect 2500 locations in Jammu and Kashmir, Himachal Pradesh, Uttrakhand, and North-Eastern states through broadband Internet under the National e-Governance Plan (NeGP).

Under the contract, Hughes will supply, install, and commission the VSAT's terminals in most difficult parts of India where other modes of delivering broadband services are not available.

The next lot of 150,000 CSCs, called the CSC phase II, is still with the cabinet for approval.

On major customers in 2011-12

Hughes has a wide customer base ranging from system integrators like Tata Consultancy Services and Wipro, all major banks like the State Bank of India, HDFC, Allahabad Bank, managed service providers for the ATMs like FSS, AGS, FIS, TSI, and the state governments of Punjab, West Bengal, Uttarakhand, and Jharkhand.

On key challenges

Bandwidth scarcity is a major issue. No fresh allocations have taken place in the country in the last two years. There are satellites that were launched nine months ago, but are yet to be allotted. There is no clarity on ISRO's role as far as the allocation policy is concerned. This is creating significant challenges for the VSAT operators in the country. For the VSAT industry to flourish, bandwidth scarcity issues must be dealt with at the highest priority.