Manna From The Skies?
The telecommunications market in the country is a fairly crowded one. There are at least 35 cellular networks being rolled out. Before the year is out at least six basic line operators are likely to be commissioned, who between them will add nearly a million lines apart from the Department of Telecommunications three million additional lines in 1997 and 4 million more in the next two years. But all these services both wireline and wireless are still unable to fully meet the communications needs in many parts of the country. And it is in filling this gap that satellite telephony has found its own niche.
Before the end of this year, the country will see at least three satellite based telephony projects initiated by DoT taking off. The first, Inmarsat-M, is a trial project based on an MoU between DoT and the Inmarsat consortium consisting of some 79 countries and their telecom carriers to provide basic telephony services in remote and inaccessible parts of the country. Using laptop sized terminals weighing 5 to 7 pounds, with antennae mounted on them, users can bounce signals directly from the terminal to a satellite in space and connect with any place in the country on any of Inmarsats satellites.
The portability of the terminals makes it easy to set them up anywhere, linking distant locations instantly. The only prohibitive factor is the cost of the terminal: $3000 (nearly Rs 1 lakh).
Similar to the Inmarsat project is a totally indigenous affair initiated by DoT. Together with the Centre for Development of Telematics (C-DoT) and Comsat Corporation of the US a Vsat services and equipment supplier this project will bounce voice signals off the Insat 2C and 2D satellites linking the world. The tariffs, ranging between Rs 45 and Rs 101 per minute, are on the higher side. But the service is targeted at agencies like the railways, oil companies or defence, where it will find its own applications.
A third DoT project aims at a novel use of very small aperture terminals (Vsats) to connect two telephone exchanges. Vsats used to carry voice operate on the single carrier per channel (SCPC) technology. Such a Vsat costs over Rs 12 lakhs and has a capacity to carry between 8 to 16 voice channels. In the rural scenario, which is where the service is targeted, this is a waste as the capacity will be unused. But by tweaking the technical specifications, DoT aims to reduce capacity to one channel per Vsat. This will bring down costs significantly. One Vsat, with one telephone, can be deployed in thousands of villages for as low as Rs 3 lakhs to Rs 5 lakhs per site.
DoTs plan estimates target at covering 83,000 villages by the end of 1997. Even then, thousands of villages will remain unconnected. Of the nearly 6 lakh villages in the country, only 2.5 lakhs have a telephone connection today. Also, more than 7000 villages are totally inaccessible located in hostile and hilly terrains or in the interiors of the Andaman and Nicobar Islands. Connecting them using conventional wireline or radio technologies can be an expensive, and impractical, exercise. Other options like multi-access-rural-radio (MARR) systems are expensive. One MARR costs anywhere between Rs 10 to 30 lakhs.
Provided there are no policy restrictions, telephone calls on Vsats can be offered for as low as 15 cents a minute (roughly Rs 4), says John Puetz, director, business development, at Viasat, a US-based Vsat company that specialises in rural communications and which expects to be part of the Indian project once DoT finalises and invites tenders from private companies.
Satellite telephony is the new frontier in the world of telecommunications, and is also beginning to play a key role in providing digital communications services to the world. Almost 70 per cent of the more than 1200 satellites launched into space in the next decade will be used to provide services like voice, data, fax, paging and multimedia access to the Internet. Not that the present day ground-based systems do not offer these. But the use of satellites makes it possible to call anywhere on the globe, for the same price a local and an international call will cost the same.
To address the burgeoning market for such services, some of the worlds largest telecoms and technology companies have got together to launch what is widely known as the global mobile personal communications systems (GMPCS). The projected market for GMPCS services is some 8 million subscribers by the year 2002, a significant number of these from India.
Among the many GMPCS service providers is Motorola, which is launching a system called Iridium. After many hiccups and false starts, the Iridium project finally took off on May 5, 1997 the first of almost half a dozen similar global satellite services. The first five of Iridiums proposed 66 satellites were launched into low earth orbit (LEO) on a McDonnell Douglas Delta II rocket.
These satellites will be the backbone of a complex switching network in the sky that will transfer calls across the globe. We are right on schedule, says Jaydev H Raja, managing director of Iridium India Telecom Ltd (IITL), which has a 4 per cent stake in the project and a fully capitalised investment of $ 70 million. Our (Iridium) services should commence by September 1998, he adds.
Apart from Iridium there are Globalstar and ICO-global in the international market, who are readying to launch satellites by end 1997. There are some regional services too Indias own Agrani and Asia Cellular Satellite systems (ACeS) being the most prominent, providing services to the Asian and African markets.
The estimated demand for GMPCS services in India is expected to be about 180,000 subscribers by the year 2002. These subscribers will pay anywhere between $1 to $3 per minute for using the services. And fighting for these dollars will be several operators.
Aggressive marketing and pricing strategies will define how the market is shared by these players. While Iridium, targeted wholly at the travelling executive, aims to charge upto $ 3 per minute of use, Globalstar will charge just $ 1 per minute. Globalstar is already projecting a base of 50,900 subscribers in India by 2002, out of a total market of 2 million globally. Globalstar is promoted by a consortium of international telecom giants, among them, Alcatel, Loral and Qualcomm. In India its partners are Crompton Greaves and Pertech Computers Ltd (PCL), who will jointly market the services. The project envisages launching some 48 satellites into orbit at a cost of $ 2.5 billion and will be ready with its services by end 1998 including data and paging services.
ICO Global a joint venture between Inmarsat, Indias Videsh Sanchar Nigam Ltd (VSNL) and some 45 other investors from 44 countries will start its services by 1999. ICO proposes to have 12 satellites circling in the middle earth orbit at a height of 10,355 km. VSNLs equity of $104 million in ICO makes India a strong player in the ICO project. ICO expects to charge about $ 2 per minute of use.
VSNL, as the only gateway to and from international destinations, has also invested some $50 million in the $900 million regional Afro-Asian Satellite Communications whose calls will enter the country through VSNL and which will market under the brand Agrani. This project is promoted by Subhash Chandras Essel Group and the Essar group. One of the advantages of this project is that it is in the geostationary orbit and therefore needs to deploy only one satellite. By limiting our coverage over a regional area, we can deploy our systems at a lower cost too, says Ashutosh Garg, CEO and president. He estimates the total Asian market size for his services at about 100,000 subscribers by 1998, which is when services start. And Agrani will charge about $ 2 per minute of use.
The primary target of all these systems is the travelling executive. However, in India, as DoT has realised, the market is also huge in the fixed telephone business. Globalstar too expects at least 25 per cent of its revenues to come from fixed services in India as well as other regional markets.
We will have to adapt our services according to regional demand, says K Rangarajan, senior project manager, telecom services, of Crompton Greaves. In such a scenario, the hand-held terminals can be used as normal telephones, for which users pay a smaller amount.
There is one hitch, though, that may delay this satellite manna from pouring down on the country. Projects have been held up due to delays by DoT and other governmental agencies in finalising a satellite policy, which would define how and in what manner private satellite services will enter the country.
It is a redundant exercise. I see no logic in defining a satellite policy, says U R Rao, secretary, Department of Space. There is only one thing that needs careful handling: the frequency spectrum, he adds. Once the satellite policy is announced though, holidays in Nicobar will not be free from a buzzing phone.
At least six basic line operators are likely to be commissioned in 1997, who between them will add nearly a million lines, apart fromDoTs three million additional lines this year and
4 million more in the next two years.