US-based satellite broadband player Hughes is looking forward to the arrival of HTS services to build out its presence across Asia. Vaibhav Magow, senior director for APAC, tells SatelliteFinance how he sees the region developing.
Jason Rainbow:…
US-based satellite broadband player Hughes is looking forward to the arrival of HTS services to build out its presence across Asia. Vaibhav Magow, senior director for APAC, tells SatelliteFinance how he sees the region developing.
Jason Rainbow: What opportunities do you see for growth in Asia Pacific?
Vaibhav Magow: A lot of people are now taking Asia Pacific very seriously as the next market to drive growth for everybody. I definitely think this is the market where the action is. It’s an extremely competitive market, but at the same time it’s very rewarding. There are a lot of good, large customers in the region. I don’t think there’s any doubt of the opportunity for growing businesses.
JR: As well as established satellite markets here your remit also covers Myanmar, a market that is still being defined. What is Hughes looking to do there?
VM: In any country we define our presence as supporting telcos for their trunking wholesale applications business, plus the access side of the business for either enterprise or consumer broadband.
Beyond telcos, we provide solutions to VSAT service operators and ISPs that have potential customers in uncovered and/or under-covered areas.
Lastly, we serve governments as they set out projects they want to achieve – for connecting villages and schools, for e-governance, etc.
These are the kinds of opportunities that one would look for in any country. Myanmar is no different. Obviously the more immediate opportunities are with the telcos. Myanmar does not have a lot of wired telephony so, in order to go beyond the obvious cities, one is going to find it very challenging and satellite is a perfect solution.
Certain regions in Myanmar have an extremely hilly terrain on the north eastern side, making
satellite the ideal choice for supporting any telecom service.
So, there are certain places where satellite would make immense sense, and then there are places where, economically, it just doesn’t make sense to put up anything other than satellite.
JR: How important are emerging markets for Hughes in general?
VM: We are always trying to innovate into new market segments. We look at large markets by application, as well as geography. So, we would look at the various market verticals in every geographical area and, once those verticals are saturated, we start looking at adjacent markets.
For example, we’ve done extremely well with offsite ATM connectivity. That represents a big proportion of VSATs in the region. An adjacent segment to that is providing backup satellite connectivity for the country’s bank branches. There are terrestrial players, but they don’t give them the reliability they need, so satellite backup is a great option.
JR: Where are the opportunities that you see for satellite broadband in Asia?
VM: If you see pure play broadband as consumer access for the internet, then I think the biggest market has to be Indonesia. You really have to be looking at large populations for consumer broadband to be meaningful as a play.
To make a business case you’re not looking at millions of subscribers like mobile networks, you’re looking at maybe 5,000 to 20,000. We’d be happy if somebody would get to a 20,000/30,000 subscriber base in a market. That would be a great start.
You’re not really looking at huge markets, but what does make it simpler in Indonesia is that, because the population is so big, it’s very easy to conceive of a small percentage of that being targeted for broadband. And intrinsically it makes sense because the market does not have a lot of last mile terrestrial penetration. Fixed broadband is very minimal – the country relies on mobile broadband to access the Internet.
Of course, in any mature economy, fixed broadband is far more important than mobile broadband. You want to use your mobile when you’re on the move but when you come home you use a fixed connection, because you want something faster and something that’s dedicated for your house – not shared with all the neighbours.
I think one of the other markets that could be interesting would be a country like the Philippines. It’s also an island nation similar to Indonesia. Malaysia will continue to offer good opportunities for connecting people who are in under-covered or uncovered areas.
JR: How much do governments impede your ability to fully exploit APAC markets – particularly in an emerging market like Myanmar?
VM: Telecoms is regarded as being very important for providing basic services in all of these countries – especially for businesses to flourish. I think all governments now recognize how important it is to have good quality broadband. It’s a given, it’s becoming the fourth essential service apart from food, water and basic amenities.
Most countries have pretty well-defined licensing policies, which clearly identify the ways that people can go about operating a VSAT network.
Indeed, on the satellite side, the coordination between the various domestic satellite operators is all handled by the ITU. So I don’t think there is an issue of governments impeding the market.
JR: How much of a game changer do you expect HTS will be in shaking up the state of play in Asia?
VM: It’s a huge game changer. Hughes believes deeply in the efficiencies of using high throughput satellites.
They may not be the answer for each and every user. There may be applications that don’t necessarily benefit from HTS, however, yes it’s a big market step and in many ways will help keep
satellites relevant for the future. Bandwidth levels never seem to be high enough. Everyone needs more and more. That’s the truth and no one can disagree with that.
JR: Do you have any concerns about markets that look like they might be entering a period of oversupply?
VM: For our markets and end of the value chain, it’s not necessarily a concern for us. I think operators will love it because it means they could get discounts and better pricing.
When there is a price drop because of a glut in the market, we look at it positively. We see this as a great opportunity to grab some well-priced bandwidth, and start a project that was on the backburner because the pricing was not right.
So I think it’s essential for the market to see these cycles. I don’t think we should be looking at it as a problem.
JR: About these projects that are on the backburner until HTS comes along, people have talked about the role that the technology could play in 4G/5G networks. What opportunities do you see there?
VM: I think 5G is still a long way off, but people are very excited about 4G being a big user of bandwidth. Realistically, one must understand that 4G networks will only roll out in extremely populous urban centres. It won’t be ubiquitous coverage like 3G.
The cost of 4G won’t allow one to roll out services everywhere. There are some developed economies that are doing that, but the price of service and access is very different in those markets.
The bulk of the real usage in the short term will come from 3G, and we see customers increasingly enquire about 4G support.
JR: What other innovations are out there that could impact the satellite ecosystem?
VM: One of the big innovations is the use of wideband carriers. The carriers that you can actually use on VSAT networks are becoming bigger and bigger. Having bigger carriers enables you to offer better quality services.
For example, if you want to service 50 4G towers, each of them needing 100 Mbps of bandwidth, you can do it if the carrier itself is 120 Mbps to 150 Mbps. You’ll be able to benefit one LTE base station with that. By having a bigger carrier you are able to get a larger chunk of bandwidth, and with it you can serve multiple sites with large requirements.
Whether it is to an LTE base station or consumers, as usage peaks and drops you have the ability to multiplex that demand with a big carrier. That’s a big innovation. We were talking about whether LTE is going to be a big demand, but if you don’t have big carriers, then how are you going to serve the demand?
If you are using point-to-point capability, then you’re missing out on utilising the fluctuations in network usage. Big carriers have the ability to share bandwidth amongst users according to need, and that will help service providers go after more opportunities with bigger bandwidth requirements.
Another technology that Hughes has introduced is its System on a Chip (SoC). We have developed a multicore technology that puts an entire VSAT system on a chip, allowing us to create modems with very high capability and capacity. These SoCs are in each of our modems today.
By creating the SoC we’ve been able to better integrate the VSAT modem with ground technologies, meaning better performance, more throughput, improved capabilities, all at affordable price points.
