Addressing teleworkers and enterprises in rural and remote locations has been a difficult task from both a financial and technical perspective. Funding for projects that cover large areas has not been forthcoming due to the large costs associated with deploying terrestrial infrastructure. In addition, wired technology has limited range and is therefore heavily challenged in terms of ROI considerations in sparsely populated areas.

One of satellite technology’s inherent advantages is ubiquitous coverage, or the ability to cover wide areas specifically in locations where populations are dispersed. Satellite terminals are becoming more affordable, and space segment costs for bandwidth are declining as well, which has led to higher penetration in the world’s rural-based enterprises. Now, combined satellite-WiFi and IP VPN services are addressing rural enterprise demand in even more compelling ways.

With satellite-WiFi, enterprise workers in rural and remote locations can visit rural hotspots, or enterprises themselves can implement WiFi solutions in their premises that make transactions and corporate Internet/Intranet use more convenient. In building rural infrastructure such as smart buildings or smart facilities, cumbersome wires can be bypassed in favor of 802.11 equipment enabling end users to access the Internet immediately simply through increasingly embedded WiFi access cards. For old or existing facilities and buildings without any form of Internet access platforms, implementing VSATs combined with WiFi is even more compelling.

In terms of assuring broadband throughput, security, billing and other services associated with enterprise or e-commerce applications, an IP VPN makes all this possible with an assumed reduction in costs. Multiple users sharing bandwidth in a WiFi hotspot creates performance degradation, particularly when those users are “throughputting” at broadband speeds. In addition, when security is installed typically with IPSec, the performance degradation becomes even more serious. For instance, a single user at 128 Kbps will typically experience a reduced throughput of 50-60 Kbps when VPN is bundled in. In a shared environment such as a WiFi hotspot or a “smart facility” that uses WiFi, performance levels can decline to as low as 10 Kbps. Based on vendor statements, deploying an IP VPN over satellite generally assures that broadband performance and security can be achieved for approximately $100 per month per site or per WiFi hotspot depending on service level agreements (SLAs).

The satellite-WiFi/IP VPN implementation therefore speeds up infrastructure deployment for enterprise users at relatively low-cost for high throughput, secure communications. Is this solution currently being implemented, or is it still in the drawing boards? Northern Sky Research (NSR) learned that UDcast plans to announce the introduction of its UDgateway-POP during the IBC2004 exhibition scheduled from September 10 – 14 in Amsterdam. The terminal is a hotspot-friendly, satellite-aware IP appliance that aims to enable enhanced performances for satellite-enabled WiFi networks. The appliance aims to improve file download performances for all WiFi network users through the company’s compression technology, which UDcast claims has the ability to bring savings of up to 90 percent. In terms of network security, the UDgateway-POP will use integrated universal authentication as well as a shared firewall to protect all users connected to the WiFi hotspot.

In its research study on the IP VPN via satellite market, NSR forecasted the large enterprise segment to dominate the number of IP VPN via satellite sites until 2008. In the early part of the forecast period, the implementers are expected to be large telecommunications companies and large enterprise entities. Although a satellite-WiFi and IP VPN combo enables the costs to corporate end users to become more affordable, there is still a premium to be paid for high-quality VPN services in terms of establishing an ROI model for rural areas. With hundreds or thousands of sites that have to be equipped and monthly recurring costs that have to be recouped, operational costs are still high. As such, the onset of demand in terms of infrastructure deployment is expected to begin with entities that have high price elasticity, which is where large corporations and vertical customers like government entities come into play.

There is also a growing trend, particularly in the developed world, regarding the increasing number of SoHos and teleworkers. These groups are expected to account for a larger part of the satellite market, specifically when equipment and service costs begin to decline. The number of sites in the figure above represents dedicated SoHo sites. In terms of the IP VPN piece of the market alone, service revenues are expected to surpass equipment revenues for the long term, indicating that once the infrastructure is in place, declining service costs lead to greater usage of the equipment.

There is currently a move to develop WiMAX, a technology that extends coverage at a much higher range compared to WiFi. With WiMAX, the VSAT would act as a “sub-hub” that sits on the WiMAX hotspot or coverage area, which can then serve multiple “remotes.” In a way, the traditional hub-and-spoke architecture could be extended to make equipment costs to the end user even less expensive. In the case of WiFi, each facility typically must have a VSAT in order to communicate with the VSAT hub, which then connects to the public networks. With WiMAX, only the “hotspot covered area server” has to communicate with the VSAT hub, and end users within a 30-mile radius merely need a WiMAX card and/or other inexpensive equipment to gain access. Indeed, by 2007, growth in WiFi hotspots is expected to be overtaken by growth in other non-WiFi platforms including WiMAX.