Hughes eyes 65% of India’s satellite backhaul market

DCC approval for using satellite backhaul will open wide window of opportunities for cellular services
US satellite service provider Hughes Communications is eyeing over 65 per cent share of India’s burgeoning satellite backhaul infrastructure market.

Backhaul infrastructure is critical to keep telecom networks connected. For instance, to keep mobile networks running, telecom companies need to keep cellular towers interconnected. Telecom service providers prefer optic fibre cables or microwaves for backhaul purposes, and satellites are only used in extremely remote areas and disaster situations.

Opportunities galore
But the Digital Communication Commission’s (DCC) approval for using satellite backhaul, through VSAT terminals for cellular services, will open a wide window of opportunities, according to Shivaji Chatterjee, Senior Vice-President- Enterprise, Hughes Communication India Private Limited. “In the coming year, at least 5 to 10 thousand cellular sites will be using satellite technology for backhaul purposes. Hughes Communications, being the incumbent, is likely to capture at least two-thirds of the market share,” said Chatterjee in an exclusive interaction with BusinessLine.

Chatterjee estimates that there are only about 200 cellular sites using satellite connectivity for backhaul. However, the laying of optic fibres or microwave towers in remote locations, can be commercially unviable for service providers. This is why the recent move by DCC to allow VSAT operators to provide satellite-based backhaul is a big opportunity for companies like Hughes.

Previously, one needed a National Long Distance (NLD) licence for this purpose, which, according to Chatterjee, is a regulatory hurdle. “Operating within an NLD licence is a long, arduous process and approvals take time, and the spectrum charges are too high for the set of operations to be economically viable,” Chatterjee explained. Under the new rules a Closed Users Group (CUG) licence is sufficient to provide these services.

Government-mandated projects to provide 4G connectivity to uncovered rural sites will be the biggest market drivers for players like Hughes. Universal Obligation Services Fund (USO-Fund) has launched a series of projects in the past 12-15 months, which have identified uncovered villages in Jammu and Kashmir, Arunachal Pradesh, Assam, Uttar Pradesh, Bihar and Rajasthan, where they are providing subsidies to operators to install mobile towers for cellular services. Chatterjee estimates that over 50,000 villages will be covered under these 4-5 projects. “Moreover, about 15 per cent of these sites have additional subsidies for using VSAT capabilities to provide backhaul,” Chatterjee continued. In addition to this, Chatterjee believes that additional projects will also come when BSNL 4G tenders get approved, along with the ongoing rural expansion by telecom operators. “We have already completed a project with our units operational in villages in J&K and Rajasthan,” said Chatterjee.

Currently, satellite backhaul providers use geostationary orbit (GEO) satellites, such as ISRO’s high throughput satellites, which can beam 300 gigabytes per second of the internet into remote corners of the country. Hughes is also in conversation with Low Earth Orbit (LEO) players for backhaul provision as well. Unlike GEO satellites, LEO has a lower latency. “Global business model for players like One-Web and Starlink is to directly beam the internet to individual households. However, the cost of installation and operation is too high for the Indian context. What makes more sense for these players in the Indian market is to use their technology to provide backhaul” Chatterjee explained. BCS Bureau