Global Intercom

The future of business communication is a four-letter acronym. Vexed by the unreliability of conventional terrestrial communication network, a fast-growing tribe of Indian corporates are turning for succour to satellite transmission through VSATS (Very Small Aperture Terminals).

The present installed base of 600 VSATS will jump five-fold next year, says HCL Comnet president Vineet Nayar, and from 1997, at the rate of 5,000 a year, to reach 30,000 installed VSATS by 2000 AD. By then, the VSATS -driven National Stock Exchange (NSE) with brokers across the country trading online on the network, will be the largest in the world. "The awareness that VSATS networks provide error-free, instant data and voice and video transmission is spreading like wildfire," says Shashi Ullal, president and MD, Hughes Escorts Communications Ltd.

For the telecom-ignorant, a VSAT network is a communication network consisting of a central hub and many nodes--typically branch offices, sales depots, warehouses, theoretically even retail outlets--that can share all and video players, can be connected to a VSAT network.

The advantages are obvious, especially in India. VSATS are not bogged down by geographical barriers and distances. "For a VSATS there is no difference between Bombay and Timbuctoo: the quality of communication is the same everywhere," says Nayar.

If information is power VSATS are the dynamos of the '90s. Immediate access to information helps reduce the decision-making cycle and increases efficiency and productivity in inventory control, marketing, customer services, financial management and distribution. Says Sanjeev Rastogi, Comsat Max chief executive: "Quick intra-corporate communication and availability of information has come to be a strategic tool in running businesses efficiently.

Among corporates using VSATS or planning to are Hindustan Lever, Johnson & Johnson, Philips, Sandoz, Ashok Leyland, Jindal, ACC, Nippon Denro Ispat, Punj Lloyd, IPCL, Castrol and Citibank.

The cost of setting up one VSAT node is currently Rs 10 lakh. But this is likely to drop by at least 50 per cent in five years, predicts Nayar. Even at present prices, the costs are outweighed by the benefits. And these are not only difficult-to-quantify gains like quicker response and better information flows but more tangible benefits as well. Nayar claims that since a VSAT was installed, the annual communication costs of HCL Corporation have been halved from Rs 6 crore, as data files and visual information can be transmitted instantly.

There's more. Says Ullal: "One benefit is that business groups can now set up unit in far-flung areas where terrestrial communication links are inadequate." VSATS have helped overcome a major infrastructural bottleneck-communications-which deterred the private sector from entering backward areas, despite incentives like tax holidays.

But how long will VSATS last? In the developed world, it's used primarily to communicate between corporate head offices and remote units where telephone services are unreliable. So, will the VSAT boom peter out as the private sector brings Indian telephones to global standards? Well, it will still be some years before private telecom firms cover remote places in India. Till then VSATS will continue to be the preferred technology, says Nayar. "About 70 per cent of all VSATS world-wide are used for data communication," says Ullal. Though the US has the most modern terrestrial communication network, its VSAT market is still growing.