CONCEPTS OF SATELLITE COMMUNICATION

Long distance communication through conventional coaxial or microwave radio relay linkinvolves large number of repeaters. Obviously, as the number of repeaters increases thereliability is degraded. Also the cost of the systems goes up.If two stations A & B, located long distance apart, are linked by coaxial system then thesignals are attenuated as they travel along cable. So the signal must be amplified &equalized at a number of repeaters in between. The repeater spacing depends upon numbersof circuit to be provided and the type of cable used. Typically repeaters are required at 9Km for 4 MHz & 1.5 Km for 60MHz system. If linked by microwave system the signal istransmitted as a link of sight beam. Intermediate repeaters are needed to compensate forfree space loss & delay equalization. The repeaters spacing are mainly limited by clearancefor line of sight.Microwave link require fewer repeaters than coaxial system. Typical spacing is 30 to 50Km for microwave links.If the antenna height of the repeaters could be increase to have more clearance for linesight, the numbers of microwave repeaters because as the number of repeaters increase itresults into

• Poor system performance.• Low reliability• High cost

Large area for communication would be covered if the height of the microwave repeatercould be increased sufficiently and virtually by putting it about on artificial earth satellitein the space. By using Satellite all this drawbacks can be removed. Satellite coves about 1/3 part ofearth surface. So the signals can be transmitted at a vide area of the earth.

Working of Satellite communication:

A satellite communication system has number of earth stations. At transmitting stationsthe base band or other incoming signal is then beamed up to the satellite repeater through atransmit antenna.The uplink RF signals is transmitted to the satellite through a high power amplifier, thetransmitted signal is received by the earth station at a RF, which is different from formerto avoid interference between the amplified uplink signal and the downlink to the groundcoverage area. The process of down converting in the satellite is performed by a number ofunits called transponders.

In a similar way the signals transmitted by the earth stations B to earth station A. This ishow earth stations A & B communicate simultaneously with each other. In fact, signalstransmitted by the earth station are broadcast by the satellite to its area of coverage & notjust directed to other with which to communicate. The microwave signal returned fromsatellite are so weak that the special equipment, called LOW NOISE AMPLIFIER isnecessary to boost – up the information which keeping the unwanted noise to be minimum.The signals are then sent to the received equipment, which recovers the base band, thesignal is then sent through the terrestrial link to its destination. Thus a communicationsatellite is essential a microwave repeater. It receives the energy, beamed up at it by thehighly directive antennas at the earth stations, shifts it by a couple of GHz & returns it tothe earth in broadcast mode to cover a large area on the earth.

A brief history of space communication

The idea of radio transmission through space was first conceived in 1911. In 1945 Britishauthor-scientist Arthur C Clarke suggested the use of a geosynchronous earth satellite forthe purpose. His assumption of a manned space station was later revised by a US engineer,J R Pierce, in April 1955, who was also the first one to analyze unmanned communicationsatellites. This idea later led to the great success of satellite communications.

The first artificial satellite "SPUTNIK I" was launched by the erstwhile USSR, in 1957.This began a series of space initiatives by USA and USSR.

The first satellite communication experiment was the US government's project SCORE(Signal Communication by Orbiting Relay Equipment), which launched a satellite onDecember 18, 1958. This satellite circled the earth in an elliptical orbit and retransmittedmessages recorded on a magnetic tape. It lasted for about 13 days after which the batteriesran out!!

The US Army Signal Corp's Courier IB, launched in October 1960, lasted for about 17days. It could handle typewriter data and voice and facsimile messages.

It was a balloon, Echo 1, launched in August 1960, which led American Telephone &Telegraph Company (AT&T) to build Telstar. Communication tests carried out byreflecting radio signals from Echo 1's surface were completely successful.Telstar, launched on July 1962 was the first active satellite with a microwave receiver andtransmitter to transmit live television and telephone conversations across the Atlantic. Itwas turned off in February 1963. Successive initiatives include NASA's Relay 1 satellitewas launched in elliptical orbit in December 1962 and Syncom 2, the first synchronouscommunication satellite was launched in July 1963.

In 1964 a global initiative was undertaken leading to the formation of INTELSAT, whichhas been one of the major driving forces for the large scale commercial exploitation ofsatellite technology for communications. Since then there has been no looking back.

What is a VSAT?

The term Very Small Aperture Terminal (VSAT) refers to a small fixed earth station.VSATs provide the vital communication link required to set up a satellite basedcommunication network. VSATs can support any communication requirement be it voice,data, or video conferencing.

The VSAT comprises of two modules - an outdoor unit and an indoor unit. The outdoorunit consists of an Antenna and Radio Frequency Transceiver. (RFT). The antenna size istypically 1.8 metre or 2.4 metre in diameter, although smaller antennas are also in use. Theindoor unit functions as a modem and also interfaces with the end user equipment likestand alone PCs, LANs, Telephones or an EPABX.

VSATs can typically be divided into two parts- an outdoor unit and an indoor unit. Theoutdoor unit is generally ground or even wall mounted and the indoor unit which is the sizeof a desktop computer is normally located near existing computer equipment in your office.

GROUND STATIONS (basic equipments required for vsat earthstation for communication purpose)

GROUND SEGMENTS In comparison to terrestrial link repeater, satellite is situated at very far distance ,therefore earth stations need to have higher transmit side & more sensitive, low noiseamplifier on the receive side. Information signals is received from the trunk exchange of customer premises throughterrestrial link and signal are multiplexed & amplified in a base band amplifier. Base bandsignals modulate a carrier at an intermediated frequency. Modulated output is up convertedto radio frequency. RF signal is amplified in a high power amplifier (HPA). Sensitivity of an earth station is defined in terms of ratio of the receive antenna gain tothe noise temperature of the receive chain or G/T, known as “figure of merit of the earthstation’. For small domestic earth station, signals received by antenna are amplified by lownoise amplifier (LNA). Amplified signals are demodulated to recover the informationsignal.

1. ANTENNAS An antenna is a transducer designed to transmit or receive electromagnetic waves. Inother words, antennas convert electromagnetic waves into electrical currents and viceversa. Antennas are used in systems such as radio and television broadcasting, point-to-point radio communication, wireless LAN, radar, and space exploration . Most essential thing for the earth station is to have antenna of proper size, becausewithout the antenna it is not possible to catch the signal coming from the satellite. Fordomestic thin route communications using SCPC antenna dia of 3-4.5m.The cassegrain antenna is most often used for dishes that exceed five meters in diameter.Its use is primarily restricted to uplink earth stations and cable TV head ends.For multi channel FDMA or TDMA, DAMA ,ONGC URAN uses a 11m diameter Antennafor automatic or step tracking. For medium size and small antennas (7 m and below)manual tracking is usually adequate.

Classification of Earth StationE/S Type Antenna Dia. (m)A 11B 7.5C 4.5 A standard antenna works by concentrating signals, which are picked up along its axis,to a single point. This point is called the focal point. The receiving amplifier is usuallyplaced near the focal point and the concentrated signals are collected into the receiver usinga small horn. This serves to further concentrate the signals to get the maximum possiblesignal level at the amplifier input.

The focal point can be offset from the main axis so that the receiving equipment does notobstruct the beam in any way. This offset has the effect of raising the beam of the antenna.The exact amount that the beam is raised is equal to the amount of offset. Thus, if the offsetis 20 degrees then the beam is raised by 20 degrees.

Antenna shapes and sizes vary but they all do the same thing, every antenna dish you seeincluding radio telescopes, which are basically receive only antennas, all perform thisfunction. they all focus the signals they receive from a specific point oin space onto a smallarea where they can be received and amplified.

The principle works in exactly the same way for transmitting a signal. The transmitamplifier produces a large signal to a horn set at the focal point. The signal is then radiatedonto the dish which in turn focuses the signal into a parallel beam of energy out into spaceto the satellite.

2. HIGH POWER AMPLIFIER Power amplifier is required to obtain necessary EIRP (Equivalent Isotropic RadiatedPower) from an earth station. For international large capacity links or for TV uplinks HPAswith few kilowatts may be needed. For thin route domestic communication using SCPC fewwatts of power may be adequate. For large power of the order of few kilowatts travelingwave tube amplifiers (TWTAs) or Klystron. Klystrons have narrow instantaneousbandwidth around 40MHz tunable over 500MHz range. TWTAs have wide bandwidthtypically around 500MHz. At medium powers TWTAs are commonly used. Solid stateamplifiers GaAs FET amplifiers can provide around 5 watts and are preferred for smallearth stations. Transistor amplifiers are simpler and also have higher linearity.

4. LOW NOISE AMPLIFIERThe low noise amplifier (LNA) is a special type of electronic amplifier or amplifier usedin communication systems to amplify very weak signals captured by an antenna. It is oftenlocated very close to the antenna. If the LNA is located close to the antenna, then losses inthe feedline become less critical. This "active antenna" arrangement is frequently used inmicrowave systems like GPS, because coaxial cable feedline is very lossy at microwavefrequencies.

Since the signals from satellite received at earth station are of very low level, highlysensitive, low noise front - end amplifier is required. Using an LNA, the noise of all thesubsequent stages is reduced by the gain of the LNA and the noise of the LNA is injecteddirectly into the received signal. The noise figure is usually less than a dB & is expressed innoise temperature. For reducing the ohmic losses to obtain lower noise, the physicaltemperature is reduced by cooling .Thermo-electric (Peltier effect) cooling is generallyemployed to obtain noise temperature up to 35oK. For LNA with low noise temperature ofthe order 75oK & above employed in the medium & small size domestic earth stationsgenerally GaAs FET amplifier are used since they are simpler, more reliable & cheaper ascompared to parametric are used since they are simpler, more reliable & cheaper ascompared to parametric amplifiers. LNA are mounted at the antenna feed to reducelossesThus, it is necessary for an LNA to boost the desired signal power while adding aslittle noise and distortion as possible so that the retrieval of this signal is possible in thelater stages in the system.

5. UP & DOWN CONVERTERUp converter is used to transmit the signals to the satellite. Down converter is used to

receive the signals from the satellite. Up & Down converter may be single conversion ordouble conversion type. Frequencies of local oscillator in the converters may be generatedemploying crystal or frequency synthesizers. Crystal oscillators are preferred for SCPCapplications because of their low FM noise content. Frequency synthesizers offer flexibilityto set the frequencies in small step of 125 KHz or 250 KHz. e.g. - SFC4200 C-BandSatellite Up/Down converter is used.

6. MODEMS Frequency deviation for FM satellite links is usually higher as compared to radio relaylink, modulations & demodulation should, therefore have linearity. There are differenttypes of modems. Basically the modems used in satellite communication are CU modems-voice, VSAT RCS modems, VSAT DMD modems, HSCU-modems Data.

7. ECHO-CANCELLER:The term echo cancellation is used in telephony to describe the process of removing echofrom a voice communication in order to improve voice quality on a telephone call. Inaddition to improving subjective quality, this process increases the capacity achievedthrough silence suppression by preventing echo from traveling across a network.

Two sources of echo have primary relevance in telephony: acoustic echo and hybrid echo.Speech compression techniques and digital processing delay often make these echoes moresevere in telephone networks.

Echo cancellation involves first recognizing the originally transmitted signal that re-appears, with some delay, in the transmitted or received signal. Once the echo isrecognized, it can be removed by 'subtracting' it from the transmitted or received signal.This technique is generally implemented using a digital signal processor (DSP), but canalso be implemented in software. Echo cancellation is done using either echo suppressorsor echo cancellers, or in some cases both.

8. POWER SYSTEM:For reliability no break power plant at an earth station is essential. Generally, AC powerfrom commercially main is rectified through a charger & feed storage batteries on float.The batteries drive an inverter (3 phase for large station), which delivers A.C power supplyfails. Standby engine alternators are installed to meet contingency in case of power failures.BLOCK DIAGRAM OF SATELLITE EARTH STATION

EQUIPMENTS TO BE INSTALOutdoor Unit

The antenna system comprises of a reflector, feedhorn and a mount. The size of a VSATantenna varies from 1.8 metres to 3.8 metres. The feedhorn is mounted on the antennaframe at its focal point by support arms. The FEED HORN directs the transmitted powertowards the antenna dish or collects the received power from it. It consists of an array ofmicrowave passive components. Antenna size is used to describe the ability of the antennato amplify the signal strength.

The RFT is mounted on the antenna frame and is interconnected to the feed horn. Alsotermed as outdoor electronics, RFT, in turn, consists of different subsystems.

These include low noise Amplifiers (LNA) and down converters for amplification anddown conversion of the received signal respectively. LNAs are designed to minimise thenoise added to the signal during this first stage of the converter as the noise performance ofthis stage determines the overall noise performance of the converter unit. The noisetemperature is the parameter used to describe the performance of a LNA

Upconverters and High Powered Amplifiers (HPA) are also part of the RFT and are usedfor upconverting and amplifying the signal before transmitting to the feedhorn. TheUp/Down converters convert frequencies between intermediate frequency (Usually IF level70 MHz) and radio frequency. For Extended C band, the downconverter receives the signalat 4.500 to 4.800 GHz and the upconverter converts it to 6.725 to 7.025 GHz. The HPAratings for VSATs range between 1 to 40 watts

Interlink Facility

The outdoor unit is connected through a low loss coaxial cable to the indoor unit. Thetypical limit of an IFL cable is about 300 feet.

Indoor Unit

The IDU consists of modulators which superimpose the user traffic signal on a carriersignal. This is then sent to the RFT for upconversion, amplification and transmission. Italso consists of demodulators which receive the signal from the RFT in the IF range anddemodulates the same to segregate the user traffic signal from the carrier. The IDU alsodetermines the access schemes under which the VSAT would operate. The IDU alsointerfaces with various end user equipment, ranging from stand alone computers, LAN's,routers, multiplexes, telephone instruments, EPABX as per the requirement. It performs thenecessary protocol conversion on the input data from the customer end equipment prior tomodulation and transmission to the RFT. An IDU is specified by the access technique,protocols handled and number of interface ports supported.

VSAT System Architecture

A VSAT system consists of a satellite transponder, central hub or a master earth station,and remote VSATs. The VSAT terminal has the capability to receive as well as transmitsignals via the satellite to other VSATs in the network. Depending on the accesstechnology used the signals are either sent via satellite to a central hub, which is also amonitoring centre, or the signals are sent directly to VSATs with the hub being used formonitoring and control.

Topologies

The network of VSATs at different locations adopts different topologies depending on theend applications traffic flow requirements. These topologies could be Star or Mesh.

The most popular of these is Star topology. Here we have a big, central earthstation knownas the hub. Generally the hub antenna is in the range of 6-11metre in diameter. This hubstation controls, monitors and communicates with a large number of dispersed VSATs.Since all VSATs communicate with the central hub station only, this network is moresuitable for centralized data applications. Large organizations, like banks, with centralizeddata processing requirements is a case in point.

In a mesh topology a group of VSATs communicate directly with any other VSAT in thenetwork without going through a central hub. A hub station in a mesh network performsonly the monitoring and control functions. These networks are more suitable for telephonyapplications. These have also been adopted to deploy point to point high speed links.However, in actual practice a number of requirements are catered to by a hybrid networktopology. Under hybrid networks a part of the network operates on a star topology whilesome sites operate on a mesh topology.

VSAT Access Technologies

Time Division Multiple Access(TDMA)

In a TDMA system, input digital signal bit stream is stored in a buffer memory & istransmitted at higher bit rate on a short duration carrier burst from earth station. Earthstation sends the burst in an assigned time slot. A reference station sends a reference burstrelative to which all traffic station adjusts their burst in their assigned slot so as to avoidoverlap with bursts of other stations. Earth carrier burst follows a prescribed formatconsisting of a preamble & information signals. Preamble contains few bits for carrier & bittiming recovery, a unique word for reference, station identification code, control signals,teletype & order wire signals.

TDMA system requires sophisticated synchronization technique. PCM-PSK-TDMA withquadric- phase modulation results in efficient utilization of satellite power and bandwidth.Using digital interpolation speech technique (DSI) the available channel capacity can bedoubled. Apart from increase in the canal capacity, with use of demand assignment TDMAoffers considered flexibility to make change in traffic requirement with use of demandassignment.

Illustration of TDMA with three earth station. Transmitting earth stations must time thereburst transmitting so that they arrive at the satellite in the correct sequence. This signaltransmitted by the satellite is a continuous sequence of burst separated by short guardtimes.

Frequency Division Multiple Access

Sharing Bandwidth (FDMA)

Using the analogy above, FDMA is simply having all the students talking together but onlylistening to one teacher.

In the same way, the teacher has to tune in to one student and filter out the rest. This isperhaps simple to understand since radio and tv has traditionally used this principle, albeitone way from transmitter to receiver.

In FDMA separate frequency are used for transmission of each carrier from any satellite.FDM-FM-FDMA is the conventional & most commonly used method for satellitecommunication. However for multi-carrier operation of satellite transponder, due to no –linearity of the output traveling wave tube amplifier (TWTA), they have to be operatedbellow its saturation level in order to keep inter – modulation products with in limits. Thisresults in inefficient use of satellite power. Therefore TDMA are preferred when eachstation transmits bursts of short duration in a time sequential order permitting where stationbursts of short duration in a time sequential order permitting use of full satellite power.

In the shown fig Ch 1, 2, 3, 4, 5 are signals transmitted at different frequency in theavailable Bandwidth.

Sharing Bandwidth & Time (FTDMA)

Now if the students take turns to talk to the teacher then the teacher can talk to everystudent. The teacher can choose which student can talk and when they can talk. Sounds likea dream situation for some teachers.

M-FTDMA is the same system, each student has a frequency or groups of students have afrequency and the teacher has a frequency. The result is an extremely efficient accessscheme for many VSAT users to communicate with the network via satellite.

There are further two types of FDMA:1. Pre – assigned multiple accesses. (PAMA).2. Demand assigned multiple accesses (DAMA).

• Pre – assigned multiple accesses. (PAMA):I Pre – assigned multiple accesses the frequency allotted is fixed. Suppose we want tocall any place, then the frequency of call signal is fixed. This results in less number ofcalls. Pre – assigned multiple accesses is used to send the data or other any signal.

• Demand assigned multiple accesses (DAMA):In Demand assigned multiple accesses frequency allotted is controlled by Master

Signaling Channel Unit (MSCU). Suppose if we want to call any place then a request issend to MSCU. MSCU allots frequency the frequency which is free. Then the call isestablish between that two places by using allotted frequency. Once the call is complete isover, then the frequency is left free so that it can be used again by other caller. So nowthere can be many numbers of connections as compared in PAMA. The satellite earthstation where there is MSCU is called as master’s station or HUB station.

DEMERITS OF FDMA1. Susceptible to jamming2. Inefficient utilization of satellite power and bandwidth3. Uplink power co–ordination is required4. Frequency Co-ordination is required.

Code Division Multiple Access(CDMA)For radio systems there are two resources, frequency and time. Division by frequency, sothat each pair of communicators is allocated part of the spectrum for all of the time, resultsin Frequency Division Multiple Access (FDMA). Division by time, so that each pair ofcommunicators is allocated all (or at least a large part) of the spectrum for part of the timeresults in Time Division Multiple Access (TDMA). In Code Division Multiple Access(CDMA), every communicator will be allocated the entire spectrum all of the time. CDMAuses codes to identify connections.

CDMA uses unique spreading codes to spread the baseband data before transmission. Thesignal is transmitted in a channel, which is below noise level. The receiver then uses acorrelator to despread the wanted signal, which is passed through a narrow bandpass filter.Unwanted signals will not be despread and will not pass through the filter.

Codes take the form of a carefully designed one/zero sequence produced at a much higherrate than that of the baseband data. The rate of a spreading code is referred to as chip raterather than bit rate.

CODESCDMA codes are not required to provide call security, but create a uniqueness to enablecall identification. Codes should not correlate to other codes or time shifted version ofitself. Spreading codes are noise like pseudo-random codes, channel codes are designed formaximum separation from each other and cell identification codes are balanced not tocorrelate to other codes of itself.

THE SPREADING PROCESSWCDMA uses Direct Sequence spreading, where spreading process is done by directlycombining the baseband information to high chip rate binary code. The Spreading Factor isthe ratio of the chips (UMTS = 3.84Mchips/s) to baseband information rate. Spreadingfactors vary from 4 to 512 in FDD UMTS. Spreading process gain can in expressed in dBs(Spreading factor 128 = 21dB gain).

POWER CONTROLCDMA is interference limited multiple access system. Because all users transmit on thesame frequency, internal interference generated by the system is the most significant factorin determining system capacity and call quality.

The transmit power for each user must be reduced to limit interference, however, the powershould be enough to maintain the required Eb/No (signal to noise ratio) for a satisfactorycall quality. Maximum capacity is achieved when Eb/No of every user is at the minimumlevel needed for the acceptable channel performance.

TECHNOLOGY SIMPLIFIED – SCPC (DAMA/PAMA)

Possessiveness is a basic human instinct. One really doesn’t like to share resources. Youwant your own PC. You want a dedicated LAN connection. You want your own homepage. You want your own telephone. Well the list is long. But this is in direct contradictionto the fact that Networking was born and has evolved on the philosophy of resourcesharing, first across premises and eventually across geographies.So we are going to talk about two things –a) Dedicated resources in a shared environment andb) Shared resources in a dedicated environment.

This means that if you don’t want to travel in a bus you can buy a car (it’s your dedicatedresource), but you cannot buy the road (it’s a shared resource). Let’s come to the point directly. We are talking about Satellite Communication. Todaythere is a plethora of products and technologies available in the market place. It is indeed aformidable task to select the appropriate technology. The even more difficult task is toselect the appropriate product. This documents aims to demystify the concepts involvedwith an established technology – the Single Channel Per Carrier or SCPC technology. The service provider providing SCPC connectivity services has a deep resemblance to aCourier company. After all it is also a service provider. We ask the service provider muchthe same questions as we do while selecting a Courier company. Now since we all arefamiliar with Courier business, lets take a close look how the business operates, how thecustomer’s interests are taken care of and what are the trade-off involved. SCPC provides clear channel communication. To understand this lets the situation whereyou have to send large equipment. Now then there are two ways to send it. You either sendit as a single piece or you disassemble it into small parts and then send it. In the later optionyou have to first disassemble the equipment, send adequate information with eachcomponent to that it can be re-assembled in the proper order. Now if one of the componentsdoes not arrive in time then the whole consignment waits till it arrives. The former caserepresents clear channel communication and the later represents packetised data/voicetransmission.

The Courier Company picks up the goods from your premises and delivers to you premisesin another location and thus it provides end-to-end delivery. Similarly SCPC provides end-to-end data, voice and video connectivity. Its just not sufficient to deliver the information,it should be delivered at the earliest. Now there are two ways to it. If you observe thegeographic distribution of your organization, you can surely identify locations betweenwhich you transfer goods very frequently. So the Courier Company can reserve a definitespace in their flights to carry your goods everyday. If your goods volume is very large thenyou can ask the Courier Company to reserve a flight for you. Of there is a cost attached to it. At the same time once the flight is dedicated to you, anytype of goods can be sent through. However if you don’t load the flight fully, then you areat loss as the cost of operating the flight still remains the same. But there is a way tooptimize or distribute the cost. Use the flight to cove all your locations sequentially, takinga pair at a time. In parlance of SCPC connectivity, the flight illustrates the concept of a frequency carrier.Thus the frequency carrier can either be permanently assigned between two VSATs givingway to Permanently Assigned Multiple Access (PAMA). Thus a permanently assignedfrequency channel provides dedicated bandwidth, through which you can send data, voiceor video. This illustrates the concept of Dedicated Resource in Shared Environment. Herethe frequency channel is dedicated to you but the basic Satellite resource is shared bymany. Now the assigned frequency carrier in PAMA can either be used for voice or for data.But what if you want to use one carrier for data and voice. Of course this is possible. However it calls for the use of a call of device called Voice Data Multiplexer (VDM) whichcombines or aggregates several data and voice channels into one trunk line which in turn isinterfaced to the VSAT equipment. The VDM is chosen primarily keeping in mind thenumber of voice channels required. A typical VDM configuration comprises of one LANinterface and multiple voice interface. Alternately the frequency carrier can be assigned between any two VSATs on a demandbasis giving way to Demand Assigned Multiple Access (DAMA). Thus several VSATsshare a floating link. Now as the number of VSAT grows, one floating channel becomesinsufficient. Thus a pool of floating is assigned for the group of VSATs. It should be notedthat in DAMA after the link is established it becomes equivalent in every respect toPAMA. Thus DAMA involves a call establishment cycle which is not there in PAMA. The link establishment in DAMA is quite similar to making a long distance telephonecall. If your phone has STD facility then you just dial the destination number and getconnected. In the absence of the ISD felicity you request the telephone operator to dial thedestination number and connect you through. But once you are connected the operator doesnot come in picture. Thus in DAMA call setup procedure the end equipment first datatransmission request to the VSAT. The VSAT then sends another request to the NetworkControl Center (NCS). The NCS then sends another request to the destination VSAT toconfirm if it is busy. If it is not busy then it allocates a pair of frequency to the two VSATs.Thus the clear channel circuit is established end-to-end. Thus the NCS is only involves incall establishment. A logical question that arises here is what should be the capacity of the satellite channelestablished between two locations. Going back to the courier analogy, if you notice there are weight slabs fixed by thecourier company e.g. 0 to 1Kg, 1 to 5 Kg, 5 to 20 kg, 20 to 50kg and so on. This impliesthat whether you want to send a 1.5 kg object or a 4.9 Kg object, the charges are the same.Of course you would like the range to be narrower. Similarly in the case of SCPC thecapacity of the Satellite channel cannot be arbitrary. The commonly available steps are 4.8Kbps, 9.6 Kbps. 16 Kbps, 19.2 Kbps, 32 Kbps, 64 Kbps and 128 Kbps. Thus depending ontraffic requirement appropriate channel size is allocated.

A network can have a mix of both PAMA and DAMA Links. Generally PAMA ispreferred for data and DAMA for voice. Also there can be multiple DAMA and PAMAfrom the same location. Finally the DAMA link can be easily transformed into a PAMAlink. This does not call for any hardware chance. This can be seamlessly carried out fromthe Network Control System (NCS). Now an obvious question is what determines how many frequency channels or carrierscan be established from one location. Well there are two things in this. One is the ChannelUnit and the other is the RF Unit. The Channel Unit is the satellite modem (the counterpartof the familiar Landline modem). Every frequency carrier PAMA or DAMA requires aChannel Unit. These Channel Units are housed in a modular chassis having multiple slots.So it is obvious that if you are using a four slot chassis, you can have up to four carriers.Now the RF Unit, which is collocated with the antenna, actually transmits four frequencycarriers. Now there is certain amount of power associated with each carrier depending onits bandwidth i.e. the RF unit has to radiate more power to transmit a 64 Kbps carrier that a19.2 Kbps carrier. Thus every RF unit has a definite power rating and that has to beconsidered while determining the number of carriers supported. Normally RF units areavailable with power ratings of 2W, 5W, 10W and 20W. For example a 5W RF unit cansupport either two 64 Kbps Carriers or seven 19.2 Kbps Carriers or fourteen 9.6 KbpsCarriers. Thus if you need three voice channels (@ 16 Kbps per channel) and two 19.2Kbps and one 64 Kbps data channel then you will require a 10W RF unit.

Space segment :Space Segment is available from organisations which have procured satellites, arrangedlaunches and conducted preliminary tests in-orbit and who then operate these satellites oncommercial basis.

Transponders :Contained in the satellite body are a number of transponders, or repeaters.These transponders perform the following functions :Signal Reception - it receives the signal uplinked by a VSAT and/or hubFrequency Translation - the frequency of the received signal is translated to a differentfrequency, known as the downlink frequency.

The frequency translation ensures that there is no positive feedback and also avoidinterference related issues.Amplification - the transponder also amplifies the downlink signal.

The number of transponders determines the capacity of a satellite. The INSAT series ofsatellites have typically 12 / 18 transponders in various frequency bands. Each transpondertypically has a bandwidth of 40 Mhz.

The various frequency bands are as below –Frequency Band Uplink (GHz) Earth Station to Satellite Downlink (GHz)Satellite to Earth StationC Band 5.925 to 6.425 3.700 to 4.200Extended C Band 6.725 to 7.025 4.500 to 4.800Ku Band 14.000 to 14.500 10.950 to 11.700

Internationally Ku-Band is a popular frequency band in use. The Ku- Band by virtue of itshigher frequency can support traffic with smaller antenna sizes in comparison to C / Ext-CBand. It is , however, susceptible to rain outages making it unsuitable for use in South EastAsian regions. Indian service providers are presently allowed to hire space segment only onthe INSAT series and operate in Ext-C band only. Ext-C band is available only on theINSAT series of satellites and is not a standard band available internationally.

Link Budgets :Ascertains that the RF equipment would cater to the requirements of the network topologyand satellite modems in use. The link Budget estimates the ground station and satelliteEIRP required. Equivalent isotropically radiated power (EIRP) is the power transmittedfrom a transmitting object. Satellite ERP can be defined as the sum of output power fromthe satellite’s amplifier, satellite antenna gain and losses.

Calculations of signal levels through the system (from originating earth station to satelliteto receiving earth station) to ensure the quality of service should normally be done prior tothe establishment of a satellite link. This calculation of the link budget highlights thevarious aspects. EIRP required at the transmitting VSAT, Satellite EIRP which will berequired for a desired specified gain of this receiving system. Apart from the known lossesdue to various cables and inter - connecting devices, it is customary to keep sufficient linkmargin for various extraneous noise which may effect the performance. It is also asafeguard to meet eventualities of signal attenuation due to rain/snow. As mentioned earliera satellite provides two resources, bandwidth and amplification power. In most VSATnetworks the limiting resource in satellite transponder is power rather than bandwidth.

With all their advantages, VSATs are taking on an expanding role in a variety ofinteractive, on-line data, voice and multimedia applications. Whether it is gas stationservice, rural telephony, environmental monitoring, distance learning / remote training orthe Internet, VSATs are truly poised to be the Space Age Technology.

ICNET DEMAND ASSIGNED MULTIPLE ACCESS(DAMA)

DAMA is an access technique, which allows to be shared on demand basis, and takes anyadvantage of random occasional nature of telephone traffic, full mesh connection meansany point in the system can communicate with any other point. Primary application - ruraltelephony, trunking and disaster recovery. Earlier SCPC ( Single Channel Per Carrier )system were analog – uses high B.W. Mesh system uses less B.W than star system. Starsystem requires double hop for point to point connectivity requiring HUB for every call. Inmesh direct point to point connectivity can be accomplished after call set up. All thecomponents are modularized system intra call inter system calls, support C band and KUband.

APPLICATIONSVoice data and other services, point to point data, thin route/medium route mesh DAMAfor voice band data, reassigned or dialup. High-speed data with bandwidth is on demand.

FEATURES1. Universal telephone interface2. digitized voice with group three fax capability3. Voice data can be added in increments of one4. Traffic analysis and billing data collection5. continuous monitoring and control of remote station6. priority call handling7. Multi transponder support

DAMA DETAILSNetwork uses a pool of satellite channels, which are available for use by any station in thatnetwork. On demand pair of available channels is assigned so that a call can be established.Once the call can is completed, the channels are retuned to the pool for an assignment toanother call. Since the satellite resource is used only in proportion to the active circuits andtheir holding times, this is ideally suited for voice traffic and data traffic in batch mode.Demand Assigned Multiple Access (DAMA) offers point to point voice, fax, and datarequirements and supports vide conferencing. A DAMA system is typically a single stopsatellite transmission network, which allows direct connection between any two nodes inthe network among many users sharing a limited “pool” of satellite transponder space.DAMA improves satellite network connectivity and resource utilization efficiency. In aDAMA system, the network allocates communications bandwidth to each call from a poolof frequency channels on demand-assigned basis. E.g. when a telephone user picks up thephone make a call, the request is made to a Network Management System (NMS) over theshared DAMA common signaling channel. The NMS function as a “switchboard in thesky” And determines if call is valid and establishes the channel (including bandwidth)between the call originating site and the called number. Circuits remain active only as longas needed, and then are broken to free bandwidth for other uses.When the call is completed,the remote terminals inform the NMS and the freed bandwidth is returned to the frequencypool. By using a DAMA system a single transponder can support several thousandsubscribers DAMA system quickly and transparently assign communication links or thecircuits to users on a call by call basis. After the call ends, channels are immediatelyreturned to the central pool, for reuse by others. By using DAMA, many subscribers can beserved using only a fraction of the satellite resources required by dedicated, point to pointSingle- Channel –Per-Carrier (SCPC) networks. DAMA system is versatile, reducecommunication costs, and provide the customer total control of their satellite-basednetwork.

NETWORK MANAGEMET SYSTEM (NMS)

NETWORK SYSTEMIt’s a part of client/server relationship. NS is centralized server AMT is a client NS is DOSbased system used for initial configuration and installation of the network access iscontrolled through the use of usernames, password and privilege levels.

F R E Q U E N C Y

A S S IG N M E N T S

C A L L

A S S IG N M E N T S

C A L L IN IT IA T IO N

R E Q U E S T

C A L L T E R M IN A T I

-O N R E Q U E S T

O U T L IN K

A L O H AR E T U R N L I N K

A L O H AR E T U R N L I N K

A L O H AR E T U R N L I N K

R e m o te s ite

M a ste r s i te

1. Integrated system wide monitoring and control. Status of all equipments in the systemcan be displayed and controlled including power amplifier, up down converter, modems,multiplexer etc.

2. Administration – numbering plan, circuit types, trunking assignments, remoteconfiguration, password, security and system displays can be changed.

3. Maintenance – each CU individually tested status to be displayed in real time on AMT.4. Call processing – detects origination calls, allocated BW, frequency correction.5. Monitors each call and issues teardown. It maintains through database of traffic statistics

and call detail records. This information is stored on hard disks of online and standbycomputers.

NMS uses database management system (DBMS). The function of DBMS is to maintainsystem data in an organized structure it also maintains memory requirement databasedesignated for fast access and update additionally

1. Redundancy support2. Equipment control3. User interface

SYSTEM SIGNAL FLOW

MASTER SIGNALLINGThe master signal channel units (MSCUs) at the master site are digital satellite modem andcommunications processors which reside in the NMS and provide the signaling interface toremote equipment. The MSCUs transmit the outbound signal known as the out link, receivethe inbound telecom signal (return links), and receive the monitor and control (M &C)inbound signal. The outbound signal is monitored by all remote channel units as a pilotsignal. The outbound signal is also used for data communication from the NMS to theremote channel units. The figure below shows a basic network system signal flow. Theremote site generate call requests to the master site NMS using the return links.

OUT LINK

RETURN

LINK

NETWORK

SERVER

LOCAL

CHANNEL

EQUIPMENT

MONITOR &

CONTROL

RETURN

LINK

RETURN

LINK

SYSTEM CONTROL

CALL ASSIGNMENT

M&C QUERIES

CALL REQUESTSCALL END

CALL REQUESTSCALL END

CALL REQUESTSCALL END

M&C POLL RESPONSE

SATELLITE MODEM EQUIPMENT

REMOTE SIGNALLINGThe NMS generates a continuous outbound link to communicate with the remote sites.Each channel unit (CU) continuously monitors this stream of data for messages addressedto its site ID/channel number. Each CU also monitors the out link when it is not carryingdata or voice traffic. When a channel unit decodes a properly addressed message, itresponds appropriately on one of the return links or the M&C return links. Using a separatelink for monitoring and control messages ensures the data does not use system-signalingresources and reduce the call handling capacity. The M&C return link allows failures to bequickly detected. The figure below depicts a typical signal flow between the master stationand remote sites.

CALL SETUP MANAGEMENTThe mesh DAMA system is a SCPC system with carrier assigned on demand mesh meansCU’s a remote can communicate directly.1. A satellite based DAMA call starts when subscriber lifts handset, CU detects off hook

condition and issues dial tone to the caller. The caller dials the number of the calledparty.

2. Caller CU sends call request to NMS – message contains number of called party andaddress of CU exchange unit. This takes 0.25 seconds to travel to and fro from satellite.

3. NMS checks its database assign satellite bandwidth to call. NS sends call assignssatellite BW to call. NS sends call assigns satellite BW to call. NS sends call assignssatellite BW to call. NS sends call assignment message to two channel units (first andsecond party). A TX & RX frequency is contained in call assignment. Assignmentmessage send is transmitted on ALOHA frequencies, which are fixed in Mastersignaling channel unit system.

4. CU exchange tuned to the assignment frequency and exchange link setup message.These messages verify that can receive each other. Once link established phone willbegin to ring.

5. When second party lifts the handsets CU exchange will detect the off hook conditionand send off hook message to the first CU. After off hook message, it convertscompressed Data into voice again.

6. Call is ended when one subscriber or both hang-up telephone. The CU exchangedisconnects message and drops their carriers. One CU will send call end message toNMS so that it creates CDR and release BW to another call and two frequencies areavailed.

The place where all the process of allotting frequency is carried out is call as master’s siteor HUB station. Master site provides overall network monitoring and administration. Themaster site provides redundant network servers, administration and maintenance terminals(AMTs), master signaling channel units (MSCU), an RF subsystem and an antenna. Inaddition, the master site can contain additional channel units. The system has redundantcomponents and protection switching. This allows continuous uninterrupted operation incase of failures and prevents loss of call processing.

ADVANTAGES OF VSATS If by now you believe that VSATs provide an edge over terrestrial lines only in caseswhere the land lines are difficult to install, say in the case of remote locations, thenconsider this. Close to 50 percent of the total VSAT population is installed in the US whichalso boasts of world's best terrestrial communications. Networking of business activities, processes and divisions is essential to gain acompetitive edge in any industry. VSATs are an ideal option for networking because theyenable Enterprise Wide Networking with high reliability and a wide reach which extendseven to remote sites.

Last Mile Problem Let us begin with the situation where you have reliable high-speed links between cityexchanges for meeting your communication requirements. But before you begin to feelcomfortable, connections from the nearest exchange to your company's office often fail.Consequently, stretching what is technically called the last mile problem into much longerdistances. VSATs located at your premises guarantee seamless communication even acrossthe last mile.

Reach You must be well aware of the limitations faced by terrestrial lines in reaching remoteand other difficult locations. VSATs,on the other hand, offer you unrestricted and unlimitedreach.

Reliability Uptime of upto 99.5 percent is achievable on a VSAT network. This is significantlyhigher than the typical leased line uptime of approximately 80 to 85 percent.

Time VSAT deployment takes no more than 4-6 weeks as compared to 4 to 6 months forleased lines.

Network Management Network monitoring and control of the entire VSAT network is much simpler than anetwork of leased lines, involving multiple carriers at multiple locations. A much smallernumber of elements needs to be monitored incase of a VSAT network and also the numberof vendors and carriers involved in between any two user terminals in a VSAT network istypically one. This results in a single point of contact for resolving all your VSATnetworking issues. A VSAT NMS easily integrates end-to-end monitoring andconfiguration control for all network subsystems.

Maintenance A single point contact for operation, maintenance, rapid fault isolation and troubleshooting makes things very simple for a client, using VSAT services. VSATs also enjoy alow mean time to repair (MTTR) of a few hours, which extends upto a few days in the caseof leased lines. Essentially, lesser elements imply lower MTTR.

Flexibility VSAT networks offer enormous expansion capabilities. This feature factors in changesin the business environment and traffic loads that can be easily accommodated on atechnology migration path. Additional VSATs can be rapidly installed to support thenetwork expansion to any site, no matter however remote.

Cost A comparison of costs between a VSAT network and a leased line network reveals thata VSAT network offers significant savings over a two to three years timeframe. This doesnot take into account the cost of downtime, inclusion of which would result in the VSATnetwork being much more cost - effective. Pay-by-mile concept in case of leased line sendsthe costs spiraling upwards. More so if the locations to be linked are dispersed all over thecountry. Compare this to VSATs where the distance has nothing to do with thecost.Additionally, in case of VSATs, the service charges depend on the bandwidth which isallocated to your network in line with your requirements. Whereas with a leased line youget a dedicated circuit in multiples of 64Kbps whether you need that amount of bandwidthor not.

General flow chart concerning VSAT installation

The actions that will follow the site survey until bringing the VSAT online are:

Site survey

Line of site NOFinding

Allternative NOPosition

Installationimpossible

YES

YES

INTERFEARENCE

YESFinding

Allternative NOPosition

Installationimpossible

YESNO

Roofpenetrating

Non penetratingNO Mount

YES

CableLength

>30m<70m RG11 Cable

<30m

Installation

Antennaallingment

IDUConfiguration

VSAT online

SITE SURVAY

Before installation, a field operations engineer should visit the site that the VSATis to de installed. The engineer has to take care of the following:1. Absence of high-rise buildings, trees etc, which may block the signal path.2. Absence of interference by using a gun and a field meter.3. Existence of AC power during installation.4. Existence of a clear, unobstructed line of sight to the designated satellite5. Acquisition of the longitude and latitude using GPS.6. Existence of a LAN network near the IDU.7. Estimation of the maximum cable length.8. Free access to the roof of the building.

The IDU is designed for installation indoors. It may be placed on top of a bench or on ashelf in a rack. While placing the IDU the following requirements should be met:The IDU includes a fan for ventilation. To allow proper airflow and to guarantee safeoperation of the VSAT equipment, make sure that:The rear panel of the IDU is not covered.The IDU is not placed in an unventilated enclosure.At least 10 cm of space along the IDU sides are left for ventilation. Themaximum ambient temperature is 50 oC.Place the IDU where it can be easily accessed by a technician during maintenance.Place the IDU away from electromagnetic field emitting devices.

Historical View of the VSAT Market

1986 1988 1990 1992 1994 1996 1998 1999

HNS (MA/COM) 1st 2-way VSAT network(Wal*Mart)

AD/COM Sold to ScientificAtlanta

1st VSAT LAN network (Toys RUs)

Scientific Atlanta

Tridom Sold to AT&T

AT&T/Harris

AT&T/Tridom Sold to GE

Equatorial Sold to CONTEL

Comsat TP Sold to CONTEL

CONTEL Sold to GTE

GTE Spacenet NEC H/W Gilat H/W Sold to GE

GE/Spacenet Sold to Gilat

Gilat/Spacenet

Figure 1-Historical View of the VSAT Market

Network Systems (HNS) and Gilat/Spacenet control the majority of the VSATproducts and service market (Figure 2). The first two way VSAT networkwas deployed by MA/COM which was subsequently acquired by HughesNetwork Systems. Since then, HNS has been a consistent presence in theVSAT Industry. The mergers of another group of companies GTE Spacenet,AT&T/Tridom, GE/Spacenet led to the emergence of Gilat/Spacenet

While the enormous capital investment made by both Gilat and HNS providea significant barrier to market entry, argument can be that market pricebehavior in the VSAT market is very competitive rather than duopolistic.Further pressures on prices is exerted by substitute technologies and will bemore fully discussed in later sections. For a complete example of the pitfallsand realities of VSAT deployment, please turn to the appendix.

The VSAT Market

VSAT Market Share in 1998

HNS47%

Gilat40% Other

13%

Figure 2-VSAT Market Share

With the recent emergence of Gilat as a significant and strong contender, theVSAT market is facing immense pressures on margin. This can be detectedby observing that officially, HNS and Gilat still practice 3rd degree pricingdiscrimination, but because there are so many variables in the pricingstructure, they are able to charge different prices for each of their customers,significantly enhancing revenues.

HNS, once having held significant market power, has been forced toreevaluate it s market structure because of Gilat s relentless pursuit ofmarket share. This has resulted in the continual decline in the cost of VSATproducts and services with a commensurate increase in demand, both inUnited States and globally.

Figure 3-The Demand Curve of VSAT Terminals

The Demand Curve of VSAT Terminals

5000

4000

3000

2000

1000

0

1997

1998

1999

58000 80500 115000

Quantity

With the rapidly rising demand for high-speed data and othertelecommunication services, the VSAT industry is facing a dramatic changein pricing structures and service offerings. As reported by Comsys, thedemand for VSAT terminals has dramatically increased over the past fewyears (Figure 4). The number of terminals deployed for the year 1998 were80,000 with respect to 58,000 in 1997, which accounts for a compound annualgrowth of 27% over the past three years. The Comsys 1999 VSAT report thengoes on to state that a total of 500,000 terminals are globally deployed.

We can derive the price elasticity of demand from the following:

η = %∆Q/%∆P = (∆Q/∆P) * (P/Q) = (80,500-58,000) / (3500 - 4700) * (3500/80,500) = -1.52

Since the absolute value of η is greater than 1, the price is elastic for theabove demand curve. This is further evidence that the market is competitive.

Figure 4-Annual VSAT Bookings

Annual VSAT Bookings

Sites

100000

80000

60000

40000

20000

0

1995 1996

Year1997 1998

VSATs Booked

Proving that the market is competitive does not necessarily account for therate of growth enjoyed by the VSAT industry. What does? A consumersurvey3 places the technology s appeal in a more analytical light:

Reason For Selecting VSAT % of RespondentsCost Savings 91%Flexibility 84%Reliability 80%Data Rate Support 65%No other svc met need 41%

"Our satellite network is a key competitive advantage. It's what lets us deliverour reservations at the lowest cost in the entire hotel industry. Frame relaywould drive up annual costs by $2 million. We couldn't cost-justify switchingto another technology, even if we wanted to." Says Maybe Lynn Goodendorf,director of telecommunications operations for Holiday Hospitality Corp.(Holiday Hospitality is the corporate franchise for such hotels as Holiday Inn,Crowne Plaza, and Sunspree.) This statement helps explain why HolidayHospitality Corp with its 2400-site network is sticking with VSAT s, despiteaggressive proposals from frame relay providers.

The case is far from unique. With increasing global trade, companies areturning to VSAT to reach a particular location in mountainous terrain anddistant places, which prevent fiber or other lines from being laid cost-effectively. And it s usually the only choice for the maritime and oilindustries.

The economic advantage of VSAT is not limited to usage. Unlike frame relay,a VSAT network only has one piece of equipment to manage at the remotesite. Training and operational costs are significantly lower than a Unix basedsystem.

Figure 5-Annual Cost/Site of Alternatives

Annual Cost/Site

1.5/256K ASDL

1.5 M T-1

56K/128K Frame Realy

512/128 VSAT

56K Leased Line

$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000

Cost/Site

VSAT services can help companies avoid the long provisioning delaysinvolved in the deployment of conventional leased lines. Depending on thenational PTT and the location of a network site, provisioning of leased linesin some places can take six months or more. If a site is located far off thebeaten path, PTTs may even require their customers to pay some or all of theexpenses involved in running a leased line to that site. With VSAT service,operators say they can establish working links in four weeks or less, withinstallation charges limited to the cost of setting up the VSAT earth stations.VSAT services also holds the promise of delivering more reliable connectionscompared with conventional leased lines in many parts of the world.Although VSAT transmissions can be adversely affected by environmentalconditions like rainstorms, availability generally is much greater than that ofconventional leased lines.

When it comes down to dollars, general cost comparisons between VSATservices and their terrestrial equivalents reveal the striking advantages of thetechnology. Charges for terrestrial services are distance dependent, whileVSAT connections cost the same whether sites are 1 or 1,000 miles apart.VSAT customers can immediately enjoy economies of scale as networksexpand; most of the operator's fixed costs are located in the central hub whichis needed regardless of how many VSAT s are installed.

But what's most clear in terms of costs is that VSAT charges are comingdown--and fast. They're just a third of what they were a few years ago.What's behind the price decline? Several factors, including reductions inequipment prices and import tariffs, economies of scale as hubs handlegreater numbers of connections, efficiency improvements as operators gainoperational experience, and aggressive competion. VSAT operators as a rulecharge flat monthly tariffs--which is likely to be a welcome change forcustomers tired of interpreting unpredictable, volume-based terrestrialequivalents bills from PTTs and others.

Modeling U.S. VSAT Deployment In order to understand the future of VSAT technology we will constructa model of its present employment in the United States. The model isbased the hypothesis that VSAT employment is a monotonically decreasing,piecewise linear function of population density. This model will be generalenough that global application should be possible, with the appropriateadjustments for per capita income and the availability of substitutes.

Discussion is limited to VSAT data and video services offered in the UnitedStates by the two principal players in the VSAT industry, Hughes Network

Systems, Inc. and Gilat Satellite Networks Ltd. These two companiesaccount for 88 % of the market. Telephony applications will be excluded fromthis study as they are insignificant in the U.S4,5.

To support our thesis, we will examine the Hughes partial customer databasefor hub based services as described in the Comsys 1999 VSAT report entitledVSAT INDUSTRY STATUS REPORT TO CLIENTS: HUGHES NETWORK

SYSTEMS: American Services . This selection is made as the largestapplication of VSAT is hub based data services6,7 and Hughes is theacknowledged leader in hub services. Study of this data reveals that themajority of users of hub services (1998) can be grouped into eight categoriesas listed in table 2.

Category InstalledRetailers 35,402Automotive Companies 2,825Financial 1,736Hospitality 1,587Service Providers 1,561SCADA 1,198Telecom 542Distance Learning 395

Table 1 : User Categories

Noting that retailers are the most prevalent group of users, which includepetroleum distributors, food and drug stores, it is easy to imagine that atleast one of these businesses will appear in relatively small towns. As thetime necessary to perform an adequate survey was not available, the datawill be simulated by postulating that at a population density of 500 persquare mile, there will be at least one VSAT user per jurisdiction. After thispoint, we will model VSAT terminal population to scale linearly withpopulation density.

VSAT population density = A * Pd

A = scaling factor, b = y interceptPd = pop. density; Pd > 500 / mi2

on the previous model we note that there are significantly more than 100,000business in the United States. According to the 1998 US Census8, there wereover 22.3 million corporations, partnerships and nonfarm proprietorships.Even if we allow that only 30% of these entities have need for data services,that number exceeds 100,000 by more than an order of magnitude. Therefor,at some point, the VSAT density formula postulated in the preceding sectionmust fail.

One possible hypothesis can be generated by examining the other modalitiesof data transport; due to the cost of infrastructure, the economic advantage ofVSAT is inversely dependent upon the distance from the point of applicationto a population center. Perhaps, at a certain population density, sufficienttelecommunications infrastructure will exist and make VSAT much lessattractive. Data services with greater bandwidth, much lower latency andlower cost become readily available. We will postulate that at a secondcritical point of population density, VSAT employment begins to fall off. Wewill we will use Madison, Wisconsin to test for a point of inflection in thedeployment function.

Madison is a rapidly growing, medium size city. It is the State capitol, homeof the University of Wisconsin and a number of large insurance companies,all of which depend heavily upon electronic data systems. Madison is alsonearly 90 miles from Milwaukee and 200 miles from Chicago. Thisconvergence of distance to communications hubs and a strong need for dataservices make Madison a good candidate for providing the second criticalpoint of the population density function. According the 1998 US Census9,Madison had a population of 198,000 living in a space of 57.8 miles, yieldingan average population density of 3,400 / mi2.

To discover if this population density will yield a point of inflection in theVSAT deployment function, we use the Hughes partial customer database10

again. By cross checking the Hughes database against the YAHOO.comyellow pages for Madison, we can get an approximate VSAT terminal census.The results of this survey are presented in table 2.

Table 2: VSAT Users In Madison, WI

CompanyBed, Bath & BeyondBest WesternBeverly EnterprisesBlockbusterConsolidated FreightHughes Mall ServicesKohl sMarathon OilMobil OilNBC (affiliate station)Pep BoysShell OilShopKoTarget StoresTexaco

TOTAL

Number of Sites in Madison, Wisconsin13171

10317123434

51

We have assumed, for the purposes of the census that the VSAT penetrationrate for the businesses in Madison that correspond to the Hughes report, is100%. Therefor we expect approximately 51 VSAT terminals inside ofMadison s borders. This corresponds to a VSAT density of

51 VSAT / 57.8 mi2

or0.88 VSAT / mi2 at a population density of 3,400 / mi2

This can not be considered a point of inflection and was not anticipated. Wehad expected that the demographics would force an increase in VSAT densitywith increasing urbanization up to some point of infrastructure development.We then anticipated a decreasing function that would asymptote, to somenumber greater than zero because of point of sale (PoS) operations. To furtherdevelop the model, a data point at the other extreme will be developed, NewYork City.

.

CompanyBed, Bath & BeyondBest WesternBeverly EnterprisesBlockbusterConsolidated FreightHughes Mall ServicesKohl sMarathon OilMobil OilNBC (affiliate station)Pep BoysShell OilShopKoTarget StoresTexaco

TOTALTable 4: VSAT Users In New York, NY

Number of Sites in New York, New York1314012713

13015178601273

233

This highly representative census yields 233 VSAT terminals inside of theborders of New York City. According to the 1998 U.S. Census11, NYC had7,381,000 inhabitants living on 308.9 mi2. This corresponds to a VSATdensity of

233 VSAT / 308.9 mi2

or0.75 VSAT / mi2 at a population density of 23,900 / mi2

VSAT Employment vs. Population Density

1.1

10.9

0.8

0.7

0.6

0.5500 3400 23900

Population Density

This leads us to a surprising conclusion that VSAT employment is a linearlydecreasing function of population density in the United States. The functioncan be described by

.

VSAT / mi2 = -10.68 x 10-6 ( Pd) + 0.916Where Pd = Population Density

We have presented an argument that there is an anti-correlation betweenVSAT density and population density. Clearly, the model suffers from apaucity of data points; the census relies too much upon too few businessesin too few locations. Another source of error is in the fuzzy definition ofjurisdiction. Despite all of these of errors, what can we infer from the data?There is no doubt regarding the future of the VSAT industry growth istypically quoted at a rate of 30% per year. First, we can say that for anygiven locality, increasing urbanization or densification does not, at thevery least, strongly correlate to increased VSAT employment. VSATutilization must be driven by other trends.

By examining the key features of the VSAT technology, we can begin toidentify the socio-economic factors that are driving VSAT s rapidgrowth:

1. Rapidly deployable telecommunications networks.2. Network diameters of continental or global scale the marginal cost

of distance is essentially zero.3. Freedom from terrestrial infrastructure development costs.4. Freedom from PTT and ILEC interface requirements.

Two major trends in business require the communication technologiesthat exhibit the aforementioned properties: globalization and growth byacquisition and alliance. Behind the growing integration of the worldeconomy lies the decline in the costs of transport and communication.Between 1930 and 1990 average revenue per mile in air transport fellfrom68 US cents to 11 cents, in 1990 dollars. The cost of a three-minutetelephone call between New York and London fell from $244.65 to $3.32.Between 1960 and 1990, the cost of a unit of computing power fell 99 percent. This startling analysis was presented in a October 1, 1997 FinancialTimes article12. While the reader is left to ponder the chicken and eggnature of global business and technology, one thing is clear the end of the20th century has given rise to the multi-national corporate business model.Large business information networks have become, almost by definition,global in scale.

Globalization can also be presented in an alternative light. Chairman of theFederal Communications Commission, Bill Kennard, has said "We can'tafford to have in this country a digital Dark Ages where some people are justcut off from all this technology There's a real danger in the country thatsome Americans have all this wondrous technology and it makes themsmarter and more competitive in the workplace and others are leftbehind 13" Without doubt, other PTT and communications bureau chiefshave come to the same realization; access to communications technology forall is essential to the economic well being of a country. Having access toknowledge and markets can very well be the difference between a growingeconomy and a backwater. Many of the developing countries face the doubleburden of small GNP and formidable natural barriers. The combination

makes the development of standard telecommunications infrastructureimpossible. VSAT, with the capability of leaping tall mountain ranges in asingle bound, is a solution that is being exercised with greater regularity.While telephony is a moot point for VSAT in the United States, it is not inthe rest of the world.

The last trend that requires the capabilities of VSAT is the concentrationof market power and scope by acquisition and merger.Vodaphone/Mannesmann, Atlantic Telecom/Marconi, American HomeProducts/Warner-Lambert, the list of mergers and acquisitions is large,growing larger and is global in nature.

These ventures require rapid placement of global diametertelecommunications networks. These networks must be dynamic assuppliers, payroll and personnel, manufacturing locations and chainsof command change on almost an overnight basis.

We can see by examining the top ten customer list for Hughes and Gilatthat the common denominator is continental or larger network diameter.

Table 3-Top 10 Customer List for Hughes and Gilat

HNS' "Top 10" Customers GILAT'S "Top 10" CustomersCustomers Application # of Sites Customers Application # ofSites

EDS Data Services 10660 MCI/US Postal Service Postal Services 26,000HOT Telecom Data Services 10062 GTECH W orldwide Lottery 11,500

Amoco Gas Station 6907 Alliance Data Systems Gas Stations 6500Impsat Rural Telephony 6727 Telespazio Financial News 4850

Mobil Oil Gas Station 6496 Rite Aid Retail & Intranet 4300Ford Automotive 6332 IBM/Peugeot-Citroen Automotive 4200

Chrysler Corporation Automotive 6322 ChinaSat et al Stock News 3800Chevron Gas Station 5986 Telkom South Africa Rural Telephony 3000

Telecom Italia Data Services 4540 Pagenet Paging 3000Texaco Star Gas Station 4135 National Stock Exchange Stock Trading 2100