Freeing technology

While in concept High-bandwidth Satellite Systems HSS appears to be of potential use in India, in reality, it is still years away from ...

While in concept High-bandwidth Satellite Systems HSS appears to be of potential use in India, in reality, it is still years away from use. And it is difficult to say what the telecommunications requirements may be five years in the future. HSS are a proposed communications network formed from an integrated family of advanced communication satellites, ground stations and terrestrial equipment. They are designed to provide a broad range of multi-media, video and data services to individual and corporate users all over the world.

Even though there is currently not much demand for higher bandwidth, the demand for high bandwidth applications is bound to grow. It will start off slowly and then accelerate once a critical mass is reached. Many providers are in the process of building networks now. The need for HSS in their role of providing an alternative backbone is now. In three years time providers will have put in place most of their networks.

However, once the regulatory environment allows privateparties to offer long-distance, as surely will happen with the increasing pressures on DoT, there may be a need to extend existing networks rapidly, satellite systems would help provers quickly provide service to areas where their current networks do not extend. Further, it could allow providers to avoid or lower the usually very high 8220;last-mile8221;costs. Even so, satellite capabilities would be compared with alternative media before any one in chosen. A primary consideration would be price.

The success of HSS would stem in part from the need for higher bandwidth capacity. Growth for high bandwidth type data will come mainly from MNCs and large corporations. There is the possibility that small and medium sized businesses will also need high bandwidth capability. These businesses are usually run by shrewd business men, who are always looking for ways to leverage their companies. If Internet proves to be useful, then there will be a multiplied effect, since a bulk of Indian industry comprises of this categoryof companies. Further, more households are beginning to spend money on a second phone, and communications is being viewed as a necessity, not a luxury. Thus, there is the potential of high bandwidth applications in all target segments.

An important question, therefore, is what kind of demand may exist for Internet? There has been a lot of hype about Internet. As the same time, many are of the opinion that there is a large latent demand for Internet. So far the only provider has been VSNL, who has done little to educate the market on Internet. Once the Internet Service Provider8217;s ISP come into the market, then the level of education will increase rapidly.

The success of Internet has a lot to do with regulations. In general, Internet demand is influenced by two aspects. First, what the regulations? What is one allowed to do on the internet? Currently, regulations do not allow one to do many things. This will temper the demand. Let us take the example of a virtual mall, where regulatory approval is neededto buy over the Internet. Buying is not currently allowed by the regulatory authorities. The issues involved can be better illustrated with the following example. If a book is bought in UK, from India, for USA, there is the issue of -exchanges. Will RBI allow -exchange? What kinds of duties will be applied?

While the potential for Internet and therefore for end-user high-bandwidth demand exists, the relevant question as to the reality that providers are currently faced with needs to be answered.

Story continues below this ad

The author is a manager with consulting firm AT Kearney.