global VSAT players who are faced with declining growth in other regional markets.
Growth of the VSAT market is also likely to be driven by the increasing deployments of rural telecommunications, telemedicine and distance education programs across the region. Rural telecommunications, in particular, is expected to contribute significantly to growth in this segment as many rural communities in emerging markets of the region still lack modern telecommunication access. Most governments in the region have universal access programs that set aside funds and subsidies to tackle this issue. Such developmental subsidies help to partially offset the initial capital expenditure required to deploy wireless and satellite infrastructures.
VSAT service providers in Asia-Pacific will however need to brace themselves for increasing competition from telecom service providers. Sensing the same opportunities in the underserved areas, terrestrial telecommunication providers have been rolling out infrastructure as fast as they can justify it. These telcos are furthermore moving towards the managed services model among enterprise customers, which increases revenue per customer and builds very strong loyalty due to the provision of complete solutions.
"Future growth in the corporate and enterprise VSAT segment will result from the booming number of SMEs and the associated demand for easily deployable, reliable broadband connections in areas underserved by terrestrial services," notes Frost & Sullivan research analyst James Lye.
"The SME segment currently contributes between 30 and 60 percent of GDP (gross domestic product) across Asia-Pacific. Increasing awareness (of VSAT systems) combined with decreasing service and equipment costs will continue to encourage VSAT adoption amongst SMEs."
