With 12 years and many name changes behind it, Hughes Communications India Limited (HCIL) can today comfortably claim a strong position in the very small aperture terminal (VSAT) industry.
Sharing the space with companies such as HCL Comnet, Bharti Tele Ventures, Tatanet Services and Essel Shyam, it has been named the leading equipment vendor in the country.
Known earlier as the largest VSAT operator in the Asia-Pacific region by the Comsys Report 2003, HCIL enjoys a 32.76 per cent share in the Indian VSAT market.The figure is from the Telecom Regulatory Authority of India (TRAI)’s Performance Indicators report for the period October-December 2006.
Originally incorporated as a joint venture between Hughes Network Systems (HNS) and Escorts Limited, the company, apart from providing VSAT services, was also delivering enterprise networking, e-commerce and global education services.
In recent times, the company has undergone a total revamp. To begin with, it changed its name from Hughes Escorts Communications to Hughes Communications after HNS got the go-ahead from the government to increase its stake in the company to 74 per cent. The Nandas-promoted Escorts Group held the remaining 26 per cent.
Today, the company’s clientele includes 39 of the top 50 Indian companies. It has a cumulative installed base of 70,000 VSAT terminals and has set a new trend by providing Ku-band services via the GE-1A (GE Americom) satellite, which is four times more powerful than the INSAT series.
HCIL has clubbed its enterprise offerings under three heads: Network Services (which includes satellite-based connectivity, terrestrial connectivity, managed network services and system integration); Digital Media Services (digital cameras, digital signage and business IP-TV); and Trunking Services (teleport, GSM and CDMA).
In addition, the company recently unveiled its new broadband services brand, HughesNet, replacing DiRECWAY network services for its customers in India across enterprises, government, small business and consumer segments. HughesNet encompasses the entire range of broadband solutions and services from Hughes, including several terrestrial technologies.
The change in brand name comes after the Rupert Murdoch-promoted direcTV sold off its 50 per cent stake in Hughes Network. “This transition reflects our focus on expanding the range of broadband solutions and services that we offer our customers in India. HughesNet is a more compelling representation of our company’s overall market reach and capability to address a diverse set of business challenges faced by enterprises today,” says Pranav Roach, president, Hughes Network Systems India.
HCIL projects itself as a one-stop shop that not only manufactures products, undertakes R&D and shares hub services, but also provides maintenance, repairs and integration. The company believes its key strength is its understanding of broadband networks and services, whether through satellite or terrestrial technologies. “Our customer focus and responsiveness have been the reason for our sustained growth in India,” says K. Krishna, senior director, marketing.
This view is widely shared by industry watchers who say that one of the company’s great abilities is effectively leveraging its understanding of broadband networks to create innovative offerings for customers.
The company’s confidence also stems from the fact that it has seen robust growth over the last year. It claims to have a leadership position in the industry while simultaneously diversifying into distance education and retail transaction.According to Krishna, “A significant achievement was diversifying the customer portfolio across different industries so as not to be dependent on one particular market segment or on a few customers.This has helped us get sustained growth irrespective of the business cycles of industry verticals. Our ability to offer customised solutions for key new growth markets like retail, GSM backhaul, and small and medium enterprises was another key achievement for us. Over the last year we have been working actively to evolve asa `managed network service provider’, offering services based on terrestrial and satellite mediums.”
The company has made important inroads in the education space. HCIL sees this as an important focus area, based on the belief that its e-learning business is slated to grow by a staggering 100 per cent.
Its consumer initiative, DiRECWAY Fusion centres, currently offers education and transaction services. It is soon expected to launch health-related services as well, using its broadband capability.Among the applications that DiRECWAY currently offers, there is distance learning, utility bill payment, travel services, stock trading and high speed broadband access over its satellite broadband platform.Currently available in 65 centres in 49 cities, the second phase will see it add 3,000 centres across the country. Of these 350 will be in Maharashtra circle and 5060 in Mumbai circle.
Vaibhav Magow, director, marketing, says the company will offer special services in the metros, keeping in mind the needs and the abilities of users there to pay for these services. “The differences between our offerings in the metro, nonmetro and rural centres are based on the varying needs of the market segments.Their consumption pattern varies, as does their ability to pay,” says Magow. He cites the instance of the education segment, where metro users are taught professional courses while rural customers are taught agriculture-related ones.
On the same note, the company has tied up with management institutes and currently operates across 30 cities. In fact, the company claims to contribute over 50 per cent of the revenues of institutes such as XLRI, Jamshedpur and IIM, Kozhikode. It has entered into new partnerships with IIFT, IIM, Kolkata and IIM, Bangalore and has expanded its retail education business to the corporate and BPO segments.
In addition, the company, in collaboration with Microsoft, has launched the “Bharat Saksham Yatra” initiative to bridge the urban-rural digital divide by teaching village communities about the benefits of information and communication technology for socio-economic empowerment.
The initiative will serve as a catalyst to drive franchisee opportunities for rural masses to set up IT kiosks or “Sangam Net Kendras” providing new revenue streams to kiosk owners and villagers. The company has invested Rs 600 million in this project and hopes to expand its footprint in this field in the next three years.
HCIL has also signed several partnerships with private enterprises to adopt this network on its channels. This, it hopes, will help the company build capacity and penetrate deeper into rural India.In the long term, HCIL hopes to include entertainment and tele-medicine services in its portfolio.
The VSAT major has also signed up with a few digital cinema service providers for building a network for ecinema distribution. Globally, satellite is the preferred medium of choice for delivering digital content to movie theatres.
Once a reliable and cost-effective medium is in place, it will throw open a host of opportunities for this industry, including pre-show content such as advertisements and concerts.
“The Indian e-cinema industry faces challenges that any sunrise industry would face. Theatre owners do not want to invest before they see potential in it.So, currently, some of the equipment manufacturers have taken a lead in investing in the market themselves by either leasing equipment or turning into digital cinema service providers themselves,” says Krishna.
Venturing into new territory, Hughes intends to roll out the country’s first long distance telephony network based on satellite technology. The move will intensify competition for the existing long distance operators, including BSNL, Bharti Tele Ventures and Reliance Communications, which have a terrestrial network of optic fibre cables laid across thousands of kilometres.
It will also allow the company to tap the lucrative IP-VPN market. Moreover, satellites offer a cost-effective way of reaching far-flung places and connecting long distance destinations when compared to terrestrial networks. According to Roach, “We are positioning ourselves to leverage the growing telecom market in the country. Hughes will be using fibre in the sky or satellite bandwidth to connect areas which have not been covered by other operators so far.”
Overall, HCIL has performed well over the last year or so. Its revenue stood at Rs 2 billion for 2005-06. Going forward, the company hopes to consolidate its position as a managed network service provider and continue to expand its product portfolio to cover a variety of segments, including banking, oil and gas, digital cinema, radio FM, entertainment, tele-education, tele-medicine, retail and stockbroking.
Over the next few years, Hughes is focusing on leveraging the benefits of satellites to a larger segment of the market. Clearly, India continues to be a significant market for the company and it has charted ambitious growth plans to increase its footprint in the country over the next few years
