VSAT BUSINESS: Potential Unexplored

It is now more than a year, that Internet using Ku-band through VSAT was

legally allowed in India. Leading vendors like Hughes, Comsat Max, Bharti and

few others came with their retail packages. Initial investment in the hardware

is quite affordable for the SME segment. Especially in upcountry regions where

bandwidth and reliable connectivity is the main cause of concern, this solution

should have swept the market. Still no one seems to have touched sizeable

figures in proportion to the potential projected last year.

MARKETING ISSUES



If you see the profile of vendors till now, they have been dealing with

corporate houses and government agencies with one person handling very few

accounts. The customer segments they have addressed so far have been of very

high-profile companies who are technically and financially sound.

The actual users here in this customer segment hardly play any role in

decision making. Operational problems, if any are not even noticed by the top

management and buying decisions are made once the IT head or the MD of the

corporate house is convinced. It is here that the SME segment differs from

corporates.

Marketing gurus may define these two segments in various ways. But according

to me, a person who signs on his own cheque book is from home or SME segment and

a person who signs on other´s cheque book is corporate. Once you accept this

ground reality, it is easy to address the needs of the individual customer.

DIFFERENT EXPECTATIONS



Retail/SME have different expectations. Unlike corpo-rates, they would like

to get involved in the installation process, they like to have a technical and

user manual, initial training and hand-holding on the product and also little

bit of fault-finding ability.

Upcountry people generally look for local service arrangements and as such it

is a must to have either resident engineers based nearby or to train and

authorize the channel partner at the local level to take care of the same.

It is essential to train channel partners on the do’s and don´ts of the

Ku-band technology. It is also equally essential to have a fairly stable

commercial policy and rates for bandwidth, as orders in upcountry generally take

fairly long time to get finalized, specially for these type of products.

UNDERSTANDING UPCOUNTRY



This product cannot be targeted at metros or mini metros as there are

various economical alternatives like reliable dialup connections from various

ISPs, ISDN, leased line, VPN and DSL available to the buyer. This has to be

pitched in a market segment where the user is not getting any reliable solution

from the land line connectivity. And this market segment lies in upcountry only.

Having identified upcoun-try as a potential market one has to study the

buying behavior in that region. Users in upcountry regions need a lot of

education and hand holding in the initial period till the product is

established. People are reluctant to invest in new products, whether it is a two

wheeler, car, computer or VSAT.

Vendors may have to invest in advertising to promote the technology first.

This can be done by advertising in the local newspapers, trade magazines and

cable TV, conducting roadshows or even going one step ahead and setting up demo

sites at strategic places.

The retail buyer goes by the philosophy of "Seeing is believing"

and for that the vendor may require a working demo site at least within a radius

of 250 kms. Creating technology awareness and then selling the brand are the two

key objectives of all these activities. Once the acceptance of the new

technology reaches a particular level, buying decisions will be purely based on

the brand recall and of course the service.

It is also a must to get opinion makers of the town in your fold and once

they start propagating the word for the brand, selling will be easy.

WEATHER WOES



The Ku-band technology has its own inherent problem. In event of a cloudy

weather, specially during monsoons, the bandwidth one gets at the terminal is

very erratic, even if the Ku-band operates in the frequency range of 12 to 14

Ghz as against 4 to 6 Ghz used in extended ‘C’ Band which is used in

conventional VSAT for any commercial or WAN environment.

The throughput also drops down drastically due to repeated resending of data

packets, and sometimes gets reduced to the dialup speeds. In some of the places

in India, where monsoons last for almost three to four months in a year, the

buyer has to take help of the local land line again to compensate for the speed.

CREATING CREDIBLE CHANNEL



It is almost impossible for anyone to reach the depths of upcountry without

a proper channel. The channel partner must be a well-known figure in the local

market, experienced in networking jobs and should preferably be one of the ‘opinion

maker’ types.

Also the margin paid to channel partners must be in tune with the work

required to be done for all the marketing activities. Finally the company should

ensure partner loyalty as they are the ones who would establish the brand.

It is essential to take quick steps in this direction before the private

basic telephony companies like Reliance, spreads its arm even at district and

taluka level throughout the country.

The time is not far away when these companies will provide connectivity and

‘all-in-one’ type of solutions right from voice, Internet, entertainment and

education at very low investment points as compared to VSATs

Sudhir Budhay is Proprietor,

Business Algorithms