Balancing the CAPEX and OPEX in the VSAT market

Guest post by Alvaro Sanchez, Sales & Marketing Director, IntegrasysOriginally shared in Satellite Evolution November/December 2016

The introduction of high-throughput satellite (HTS) has been a real game changer in the Very Small Aperture Terminal (VSAT) market. As well as the obvious technological improvements, increased bandwidth and spot beam technology has brought about a significant drop in capital expenditure (CAPEX) for VSAT operators, and this continues to fall. High-throughput satellite has also enabled VSATs to get both smaller and cheaper to produce, leading to expense reductions in shipping costs.

There has been an exponential growth of VSATs of late. Especially in remote areas which were previously too expensive to connect. The obvious users are on the move, but VSATs also provide much much-needed communication to areas including oil & gas, environmental monitoring, e-learning, disaster recovery, and cellular backhaul.

Why are the operational costs in the VSAT market so high?  

As the cost per unit has come down, the operations expenses (OPEX) have remained constant. VSAT remotes will soon have a 50/50 split in terms of CAPEX vs OPEX expenditure. It is likely that CAPEX will continue to fall with the economies of scale, but the savings are still not being made my most when it comes to operating costs. Before long it will likely cost more to deploy and maintain a VSAT than to buy one.

Increased demand for VSATs is partly to blame for this. Rapid expansion in mobility applications means that operators are having to install more and more remotes to cope with the extra demand, with networks being stretched to accommodate the added demand for bandwidth.

Poor installation is also to blame for increased OPEX. VSATs are often installed by under-skilled operators, with installation rushed due to time pressures. A haphazard approach to installation can lead to errors, further increasing maintenance costs.

With so many VSATs positioned in remote areas without regular maintenance, extreme weather conditions can severely impact the unit, often bringing down the entire network. Sadly, many operators aren’t alerted to the problem until after it has occurred, and are required to send a team to multiple sites to correct the problem, also leading to additional costs.

At the very least, the most diligent VSAT operators are required to deploy experts to travel to each terminal regularly to ensure the VSAT is working efficiently, which pushes costs up further.

How can OPEX be reduced?

Clearly, as an industry we need to be smarter at bringing the OPEX down. Installation should be as effective as possible, and continuous monitoring of the VSAT should take place to ensure it is performing as efficiently and cost-effectively as possible.

As VSAT networks continue to grow, we need to make the jobs of installers and maintainers more easy to manage.  The IoT and connected vehicles are likely to make this process easier with small, relatively low cost portable devices helping to ensure installation is carried out correctly. There have been recent examples of increased connectivity helping to combat the problems caused by poor installation. Our Satmotion Pocket tool has become widely used by the VSAT industry to ensure fast, accurate, and efficient installation of VSATs, and goes a long way to eradicating errors in the initial setup stage.

To drastically reduce OPEX however, we need constant monitoring from the Network Operation Centers (NOCs). If the health of all VSATs on the network, regardless of location, is being continually monitored in one central location, the operator can be alerted to any anomalies and take the necessary steps to resolve.

This requirement led INTEGRASYS to the development of the Alusat tool, which automatically monitors all VSATs on the network and proactively checks the uplink and downlink health of the units. Operators can determine different thresholds for RX and TX and the system can act automatically depending on the circumstances. In addition, measured values of copolar power, cross polar isolation, adjacent satellite interference and 1dB compression point for networks with adaptive power adjustment capability can be critically important. All being handled at the NOC is hugely cost-efficient for the service providers.

The smarter we get with monitoring and maintaining VSAT networks, the more we can reduce the running costs. As an industry we should be aiming for OPEX to be considerably lower than the CAPEX, with capital savings being matched by operational savings thanks to smarter tools.

Alvaro Sanchez and his team from INTEGRASYS were a sponsor of VSAT Global 2016. For exhibition and sponsorship opportunities in 2017, contact marc.wallentin@knect365.com. 

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