Hughes, RIL in talks for rural 4G

Hughes Communications India, global pioneer of VSAT (very small aperture terminal) communications, is now in talks with Reliance Industries Limited (RIL) to offer 4G services in rural India. Sketching the company’s progress in India since its VSAT launch in 1995, Shivaji Chatterji, vice-president of enterprise at Hughes, tells Beryl Menezes how new developments like 4G and e-governance are aiding the growth of VSAT in India. Excerpts:

How has been your progress in India?
Hughes has the largest share of the satellite communication market at 60%. Today, we have 300 enterprise and government customers using 70,000 VSAT connections. We are the only player to offer end-to-end services without an original equipment manufacturer (OEM) – that’s what has helped us stay ahead of main competitors Bharti, Tata, HCL and BSNL. The boom in this industry in the last few years has also aided us.

VSAT communications have remained limited to enterprises. When will you extend it to consumers?
In India, the government allows us to offer services only on the Ku-Band, which limits our offering to enterprises via VPN (virtual private network). However, we hope the government will allow us to utilise the Ka-Band soon, which will then enable us to offer VSAT services at the consumer level. We already have one million VSAT customers in the US on the Ka-Band.

4G is another keenly awaited technology today. Do you view 4G players as competitors or associates?
While 4G requires a lot of towers in India, being rolled out as it is on the WiMax band, it will largely remain an urban phenomenon, restricted to the top 20-100 cities. For 4G to properly take off in India will take another 4-5 years – so we do not view them as competitors. However, RIL, which is looking at a pan-India roll-out, is in discussions with us for satellite backhauling to offer 4G services in rural areas, as well as turnkey solutions for enterprises.

Which is your latest VSAT venture?
A good 30% of our contracts come from the BFSI (banking, financial services and insurance) sector, as half of the banking in India is done on VSAT. Currently, our largest project on this front is aiding the government in setting up 27,000 VSAT off-site PSU bank ATMs within the next 18 months, as part of a directive of the ministry of finance. This will also include direct transfer of cash from the government’s account to a tax-payer’s account – a new step in banking in India.

What are your other sources of revenue in India?
After BFSI, our next largest source of revenue (20%) comes from e-governance for gram panchayats and rural technology upliftment, which includes UID (universal identity card), the national rural health mission, distance education and tele-medicine solutions. Apart from this, 15% of our revenues comes from defence, and the rest comes from other verticals including digital cinema, oil and gas and other industries like manufacturing and construction.

You recently tied up with Maruti for digital training, right?
Yes, digital training apps across sectors have become quite popular today. We are also working on apps for e-governance, smart grid, power grid project and the rural employment guarantee scheme.