Cabsat calling

The 11th Middle East international cable, satellite, broadcast & communications (Cabsat) exhibition will be held from March 8-10, 2005 in Dubai. Network Middle East previews what issues are likely to be prominent at the show and how they will affect enterprises across the region that are using or considering using satellite technology.

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By  Simon Duddy Published  January 23, 2005

|~|sat-pic_m.jpg|~||~|Cabsat is the largest communications exhibition in the region and represents a key landmark for end users deploying satellite solutions. At Cabsat, users can see technology demonstrations and catch up with the latest technology and business issues that will shape their installations in the coming year. Satellite has long been a vital communications tool in the often sparsely populated Middle East but how long can this last? Theory suggests that as the region develops and fixed infrastructure such as fibre becomes more common then the role of satellite technology should wane. However, if anything, satellite technology is on the increase in the region and among the factors bucking the trend is price. “The ability to deliver high end applications any time, anywhere, and at a very competitive price, is the reason why very small aperture terminal (VSAT) technology is experiencing such a great uptake,” says Paul Seaton, VP of international sales at NewSat. The market is growing and new vendors are entering the market. For example, US satellite hardware manufacturer SatPath has set up a regional subsidiary, SatPath Middle East, to exploit what it sees as growing opportunities for VSAT satellite providers. Falling prices will play an important role in determining the success of VSAT technology and regional SatPath president Milad Jabbour is excited about SatPath’s potential to slash costs. “We are looking to leverage SatPath’s US-based R&D clout and combine it with cost-effective Taiwanese manufacturing to deliver a winning proposition. We can see a time when companies will build their own VSAT hubs, as the cost to do this is now in the region of US$500,000, when they cost US$1m not too long ago,” explains Jabbour. However, not all commentators agree that prices are falling or that they are falling fast enough. Bandwidth, services and license prices are very high compared to other parts of the world, according to the Global VSAT Forum (GVF) Forum. “Any observer of the development of communications in the Middle East would acknowledge the fact that the cost of communications, especially data communications bandwidth, has remained too high throughout the region,” says Mohamed Youssif, the Middle East correspondent member of the GVF. Such costs vary greatly from one country to another, ranging from US$1,250 per Mbit in Algeria up to US$8,500 per Mbit in Lebanon. It is significantly above worldwide averages and thus constitutes a severe roadblock to expanding usage of the internet throughout the region,” he adds. Falling hardware prices are proving an enabler for VSAT and with price falls in other areas perhaps in the pipeline, it is likely to grow in importance as a factor influencing the spread of satellite technology. Arguably more important, however, is the sudden emergence of the Iraqi market, due to the fall of the Hussein regime and the US-led occupation and re-building of the state. Eighteen months after the fall, much of Iraq’s fixed infrastructure looks, at best, just as bad as it did before the war. Repairs have been made to bombed-out exchanges belonging to fixed operator, Iraqi Telephone and Post Company (ITPC), but few initiatives to improve its core infrastructure or increase coverage have come to fruition. In this environment, VSAT should thrive. “Iraq represents a significant opportunity for VSAT vendors, as the terrestrial telecommunications infrastructure is severely lacking,” says Hussein Oteifa, senior director of sales for New Skies in the Middle East. “Ongoing reconstruction efforts will depend heavily on satellite services for their communications requirements, particularly in the oil and gas sector. Vendors and service providers need to be patient until a more stable, secure environment enables the reconstruction to gain momentum,” he adds. The danger presented by the on-going insurgency in Iraq means that while opportunities exist, it is difficult to take advantage of them. “Iraq is a very good market but has come to an standstill due to the instability of the country,” says Hisham Ansari, managing director at Horizon Satellite Services. “As the basic infrastructure is not up to minimum requirements, VSAT is the only means of communication. We see a good growth potential but vendors should be clear in dealing with their customers as companies come and go in Iraq,” he explains. The scramble for business in Iraq while lucrative, carries risks. Apart from the obvious dangers to employees and equipment from insurgent attacks, there is no doubt that companies will have to maintain a serious, long term business approach to benefit from the chaotic market. “VSAT is certainly in high demand today in Iraq, as is evidenced by our local operations,” says Ali Hadi, president, Advanced Internet Centre (AIC). “However, only companies with long term objectives in rebuilding Iraq will be able to establish profitable and rewarding operations in the country,” he adds. While Iraq is an important market, some vendors are downplaying its significance in the bigger picture, pointing to large markets elsewhere in the region and saying that the unusual circumstances brought about by the war distort the importance of Iraq as a VSAT market. “The market is big but should not be over estimated. Other countries in Middle East have similar potential,” says Ulrich Kiebler, president ND SatCom Middle East. “I do not mean to downplay Iraq, but there are around 15 countries in the Middle East and some have at least the same potential. Up to now, Iraq has not been so important for VSAT, except for the troops, which is not representing the Iraqi market need. The market will mature but Iraq will be one of a number of countries,” he adds. Another key driver for VSAT technologies are new applications. Arguably VSAT has been waiting 20 years for a killer application to come along and perhaps, in voice over Internet Protocol (VoIP), it has found it. VoIP uses the internet instead of copper lines to carry voice calls. It does that by standardising the way voice and data integrate and work together with the result being cheaper phone calls for users and a new market for service providers. “Like mobile phones, VoIP is seen as the next killer technology,” says NewSat’s Seaton. “VoIP is an important part of NewSat’s strategy of developing new applications for the satellite-based market and it provides NewSat a distinct position in a market not currently addressed by the traditional land-based carriers,” he adds. VoIP is possible on VSAT but there are latency issues to consider. The International Telecommunications Union’s standards wing (ITU-T) has created the G.114 specification, which states that VoIP should work at around 300ms round-trip, which means you can tolerate up to 150ms one way. If the satellite system carries a greater level of latency then the audio quality will fall below that of traditional phone calls. Latency is an issue that has affected satellite operators since the very first international telephone call. A one-way transponder delay in excess of 400ms is not uncommon and despite substantial advances in technology, it remains a barrier for many customers using realtime applications. Satellite broadband is still a niche product but opportunities are opening up when businesses need temporary connections or want to circumvent government censorships. Visa International is one such company. The credit card company uses its traditional fixed line connectivity to conduct millions of transactions around the world. However, its global processing network, VisaNet, has been using satellite connectivity from Inmarsat since 1992 to conduct business in the Middle East, Central Eastern Europe & Africa. “It is critical for VisaNet to be able to deliver high availability, so we deploy satellite connections in areas of the world where we are unable to provide terrestrial services of sufficient quality and availability to meet the high standards for VisaNet,” says Andy Wombell, head of corporate & commercial infrastructure at Visa International, CEMEA region. The company has just secured a contract with the Central Bank of Iraq (CBI) in Baghdad for domestic money transfer, and all its transactions will be done exclusively via satellite. Twenty state and privately owned commercial banks in Iraq have activated a full interbank and intrabank payment system that will link not only the banks to each other, but also the entire Iraqi financial sector to the global banking industry. The automated system, which will be based on a reliable money transfer service using a transportation type called Original Credit, will allow funds transfer through VisaNet. Visa’s operations in Iraq will be coordinated from its office in Dubai, which currently supports 75 member banks and their 7.9 million cardholders throughout the Gulf & Levant region. While new applications for VSAT open up, the technology itself is improving with DVB-RCS, for example, offering superior bandwidth as well as a standard, which will increase interoperability of products. “The key technology issues at CabSat, from the point of view of New Skies and others involved in satellite communications, will be the development, adoption and proliferation of DVB-RCS-based, two-way satellite broadband services for the enterprise market,” says Oteifa. With Internet Protocol over Satellite (IPoS) another standard being developed for satellite broadband, this issue is likely to prove a lively one at this year’s show. Technology can only go so far in bringing the satellite industry together and a much more important factor is undoubtedly de-regulation and harmonisation of cross border licenses. The communications industry in general has been restricted by monopolies and the VSAT business faces its share of woes. “In many countries in the region, local authorities forbid the use of VSAT by ISPs, business, or individuals and force them to use other means of communications like submarine cable connections or Single-Carrier-per-Channel satellite terminals at multiples the price of a VSAT connection. In some countries ISPs can use VSAT only for their backhaul but then again the charges are very high and don't reflect the fair market prices,” says Youssif. One thing that could be done by governments is to allow open access without fees to consumers for internet via satellite. There is considerable demand for such services and even though many countries allow the establishment of an internet satellite hub, they do not allow the operator to sell the service locally. “This is a contradiction that must be corrected,” continues Youssif. “If they have to, they could charge a minimal blanket license fee that the service provider can include in the monthly service fees,” he explains. By allowing internet via satellite, regulators will enhance their infrastructure and gain a source of income that is based on economy of the scale rather than losing out on the illegal business that is taking place. “They can also look at it from a different perspective, as one of the major elements of local economic growth is ease of communication and access to information,” concludes Youssif. The GVF is not alone in thinking that deregulation could prove a shot in the arm for the industry, with many satellite vendors echoing the view. “With regard to VSAT services throughout the region, we believe that businesses and consumers would benefit from a more open and competitive regulatory environment,” says Oteifa. “Competition fosters development by bringing better services to more markets and creating more demand for communications capacity and services. In the Middle East, we are starting to see a more open regulatory landscape in countries like Jordan and Lebanon, and we hope the success of these two countries inspires others in the region to follow suit,” he adds. Despite pressure from cabling, satellite technology will be around for a long time to come and will play a key part in regional communications in the next few years as the Middle East seeks to make the next leap in terms of economic development and Iraq staggers back to its feet. Cabsat is the best event in the region for keeping track of trends and identifying the best communications solutions. On Show The Cabsat show will be teeming with solutions for the satellite market and is a great place to get a feel for products and see demonstrations. Among those attending is the Gulf-based Advanced Internet Centre (AIC), and the VSAT company will be conducting demonstrations of its Qsat services. These utilise ViaSat’s LinkStar hub technology and is based on a two-way broadband satellite communications system for Internet Protocol (IP) over satellite. “The Qsat service offers low cost terminals, broadband connectivity and bandwidth efficiency in scalable, high performance IP systems,” says Ali Hadi, president, Advanced Internet Centre (AIC). “The service also offers broadband-on-demand IP multi-service access from a central hub to remote locations with an asymmetric broadband multi-frequency TDM access return channel,” he adds. Australian satellite broadband provider NewSat will showcase mobile broadband on land solutions. These 4Wheel Drive-based products provide voice and data communications for remote and fixed locations in the Middle East. It is a mobile VSAT system for high-bandwidth, secure and reliable voice, and data communications. These systems have been used by the US Military, NASA and emergency response organisations in the US, as well as oil and gas companies. New Skies Satellites, which owns and operates five geostationary communications satellites that offer global coverage for the delivery of video, internet, voice and data transmissions services, will also be heavily represented at the show. The firm will be updating customers on its value-added services for the Middle East telecommunications market, including the latest in its line of IPsys internet services, a trunking services for GSM operators as well as touting the powerful Ku-band capacity on our NSS-7 and NSS-6 satellites for VSAT services and for two-way broadband enterprise services. These are offered through partners such as Falconstream.||**||

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