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Interview with Partho Banerjee, President and Managing Director, HCIL

February 26, 2018
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The last year was an exciting one for Hughes Communications India Limited (HCIL), the market leader in India’s very small aperture terminal (VSAT) industry. The company has charted significant growth in various segments of operations owing to increasing bandwidth demand and connectivity requirements, particularly in remote areas. Going forward, the company expects VSAT deployments to surge on the back of government programmes like Digital India and BharatNet. The company is already playing an active role in supporting these initiatives. In an interview with tele.net, Partho Banerjee, president and managing director, HCIL, talks about the key trends in the VSAT space, the company’s performance highlights and its plans for the future. Excerpts…

What are the emerging trends in the Indian VSAT market?

The Indian VSAT market has witnessed strong growth over the years and is poised for significant expansion with an increased focus on technology and connectivity. New services around mobility, in-flight connectivity and surface transport communication services will drive the future prospects of the VSAT industry in India. VSATs continue to be the most preferred mode of data communication in the business-to-business segment in remote and rural locations. With the increasing subscriber base, demand for bandwidth and economies of scale will become major areas of focus for the VSAT market. Also, the possible introduction of high-throughput satellites is expected to give a significant impetus to the VSAT industry as this will increase the support for various applications and bring down cost barriers. We expect a 1:100 jump in the scale of deployments as new applications open up. We see strong opportunities arising from the government’s Digital India initiative, especially in the context of connecting villages with high speed broadband. We also expect large satellite network requirements in the government, defence and mobile backhaul segments, which will give a further boost to the growth of the VSAT industry.

What were the key highlights of HCIL’s performance in 2017? What were the company’s major achievements?

The year 2017 has been an exciting one for Hughes. We had some significant announcements and the growth momentum continued with positive developments across our enterprise, government and consumer platforms and services. We continue to be the market leader in the VSAT space with a subscriber base of 100,579 as of end-September 2017. With significant demand across various service offerings including networking, system integration, managed network services, security transaction services, intranet, internet, broadband kiosks and interactive distance education, we are confident of achieving our growth targets.

We have also been making augmented efforts to strengthen our existing infrastructure capabilities. Our latest and third satellite communications hub was recently inaugurated in Manesar, Gurugram. The new hub is well placed to cater to the growing demand from businesses for satellite broadband connectivity and high-bandwidth application services.

Which sectors constitute the majority of HCIL’s customer portfolio?

HCIL commenced its operations in VSAT communications in 1995 and, over the years, we have had the opportunity to bring enhanced connectivity to empower e-governance projects and address the connectivity needs of businesses, including large enterprises and small and medium businesses across various verticals and consumers – from banking and telecom to defence, oil and gas, retail and education, to name a few. The banking sector continues to drive strong growth, with Hughes being a preferred VSAT service provider for the majority of Indian banks and financial institutions. In addition, digital education, the telecom sector satellite backhaul segment, oil and gas, defence, and government-led initiatives, especially with respect to connecting villages to broadband infrastructure, continue to drive a strong growth momentum.

What is your view regarding the progress under the Digital India initiative? What are the opportunities for VSAT players and how does HCIL plan to tap them?

Providing reliable broadband connectivity is the backbone of the Digital India project, which aims at providing connectivity to the unconnected. Satellite communication can play an active role in providing high speed access to gram panchayats for the BharatNet programme and in delivering e-governance services under the MNREGA, the Jan Dhan Yojana and the National Rural Health Mission to remote areas where terrestrial connectivity cannot reach.

We at Hughes see this as a tremendous opportunity to contribute to the nation’s development. Hughes technology will see more than 10,000 deployments under the Digital India initiative and support 3G/ 4G networks in remote areas of the country. Going forward, we remain committed to making further investments in setting up and establishing high-throughput communication satellites. There is a large unserved and underserved market where broadband is not available on conventional terrestrial technologies. Satellites can serve these regions to deliver ubiquitous broadband coverage nationwide. With our proven prowess, we ensure end-to-end connectivity using VSAT technology across sectors including banking, e-governance, e-learning and health care, and are excited to drive high speed satellite broadband to underserved remote communities across the country.

BharatNet Phase II may see the government utilising satellite technology for service provisioning. What are your thoughts in this regard?

We are playing an active role in providing next-generation solutions for high speed access to gram panchayats for the BharatNet programme. We see the government’s role to be that of a facilitator – to create an enabling environment that allows like-minded enterprises to offer best-in-class services irrespective of the technology used. Allowing international satellite broadband companies will, in turn, provide a risk-free alternative to help reinforce the backbone of the BharatNet project. We foresee satellites being deployed in more than 5,000 sites in the near future.

What are some of the operational challenges faced by HCIL? How does the company plan to address these?

Globally, the satellite industry is growing by leaps and bounds. However, India’s share in communication satellites is far below that needed for achieving Digital India as there is a serious mismatch between supply and demand. While India is making excellent progress in the strategic segments, it is lagging behind in the commercial communications segment.

As the flag-bearer of this industry, the foremost challenge for us is to keep delivering innovations in hardware and in services that stretch satellite technology to challenge and complement ever more capable and widespread terrestrial networks. We believe that progressively, through open competition and by way of introduction of new technologies, satcom user tariffs could be brought down substantially. Consumer and enterprise markets have their own unique demands and we need to make sure we introduce the best of solutions and services to effectively meet industry demands. In addition, the complex regulatory environment is a constant challenge hindering wider growth.

What is your regulatory wish list?

India, with its vast geographical expanse and huge population, is a shining example of a market that is ripe for satcom. For many decades, the contribution from the private sector has been limited due to complex administrative policies offering very limited scope for the private sector to leverage the possible opportunities. Opening up the satellite space to private players will make the latest and innovative technologies available to all at an affordable cost. This will further enhance the government’s capabilities and infrastructure, improving governance and the quality of life of people.

What are HCIL’s capex targets and investment plans for 2018?

Our investment in capex for providing services is between $5 million and $8 million a year.

What are the expectations of the VSAT industry from the new National Telecom Policy?

The time is ripe for leveraging satellite internet, a technology that is unparalleled in its reach and reliability. There is an urgent need for all stakeholders including the government and the private sector to support and encourage the use of satellite-based broadband as a viable third pillar to enable and sustain India’s broadband (r)evolution.

We are committed and willing to invest in the country to set up communication satellite systems that could not just add to connectivity but also help in areas such as education and health care by reducing the cost of high speed broadband internet connectivity.

What will be the key demand drivers for the VSAT industry in the next two to three years?

India’s continued dearth of communication satellites has severely compromised its ability to bridge the digital divide. There is about a 50 per cent mismatch between the current demand for communication satellites and supply, leading to a shortfall in meeting the demand from the enterprise, commercial and other segments.

Another significant trend in enterprise connectivity is the need for faster bandwidth. It is driven by end users who want to run a broader range of business applications over a satellite network and who need to expand their network to new sites and new users. HCIL constantly monitors these networks and is working on bringing in the latest technologies in order to meet both immediate and future needs.

Amidst the important transformation taking place in the satellite communications industry today, the demand for connectivity is surging and satellite operators are responding rapidly by launching massive amounts of new bandwidth – it is expected to increase tenfold by 2025 – which, in turn, is revolutionising the economics of satellite service to be on par with, and even complement, terrestrial and wireless networks.

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