Bharti Airtel and Hughes Network Systems Agree to Merge VSAT Operations in India

Bharti Airtel and Hughes Network System's subsidiary Hughes Communications India Ltd (HCIL) have agreed to merge their VSAT operations

Highlights
  • The merged entity will benefit from wider market reach, better scale and improved efficiencies
  • The company will provide new products and services in addition to serving existing customers

Bharti Airtel has been on the task of revamping its network to increase the 4G connectivity and capacity to increase its subscriber base. The Sunil Bharti Mittal led telecom operator has been making great strides in the industry for this purpose. In this latest development, the telecom operator has announced an agreement between Hughes Communications India Ltd. (HCIL) to combine their VSAT operations in India. It is worth noting that HCIL is a subsidiary of Hughes Network Systems, LLC (HUGHES) which is the global leader in broadband satellite networks and services. Now although Airtel has announced this partnership with HCIL the transaction is subject to approval by relevant authorities.

Combined VSAT Operations to Get Wider Market Reach and Better Scale

The new agreement also outlines that in the combined entity which will be formed to hold the VSAT operations, Hughes will have the majority stake, whereas Bharti Airtel will hold significant shares in the company. The benefits of a combined entity for VSAT will help the company via an enhanced scale, improved operational efficiencies and broader market reach. Airtel and Hughes together will be seeking to fill the demand for secure connectivity in the rapidly growing digital economy. Notably, HCIL is a well known broadband satellite service provider in the country, and it already provides networking technologies, solutions, and services for businesses and governments.

On this new development, Ajay Chitkara, Director and CEO, Airtel Business said, “We are pleased to combine our VSAT operations with Hughes to serve the connectivity needs of Digital India. The partnership will bring amazing synergies to the forefront and combine the proven capabilities of both companies. Customers can look forward to highly secure and reliable connectivity solutions across the length and breadth of India.”

VSAT Important for In-flight Connectivity

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The new combined entity will be able to provide new products and services related to VSAT, in addition to that, the company will also continue to serve the existing customers of Airtel and Hughes as well.

Talking about this new partnership, Partho Banerjee, President and Managing Director, Hughes Communications India Ltd remarked, “We are very excited about the synergies that this partnership will bring to the Indian ecosystem. These are exciting times for satellite broadband service providers as VSAT becomes more mainstream, driven by growing demand from both, enterprise and government segments.”

It is also worth noting that VSAT is a crucial technology in the deployment of in-flight connectivity. As per a research firm Euroconsult, over 23,000 commercial aircraft would start providing this connectivity by 2027, up from 7,400 aircraft in 2017. Also, Northern Sky Research’s Aeronautical SatCom Market’s 2017 report predicts that by the end of 2019, broadband VSAT (very small aperture terminal) connectivity would be in one out of every three aircraft, whereas by 2026, the number would rise to two thirds.

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SwedgeDGupta Recent comment authors
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DGupta
DGupta

Strange introduction.. how is satellite dish data (VSAT) business tied to a revamping 4G network? This is Airtel getting out of the VSAT business by merging it with Hughes in return for a minority shares in the new company. Yes, it may be useful in future for air flight connectivity, but that is a niche business. A company the size of Airtel cannot really focus on creating a totally separate network just for that. So, this approach is better for Airtel. Let Hughes build the VSAT network and Airtel can simply use it as any other backhaul when needed. Besides,… Read more »

Swedge
Swedge

You answer your question – remote cell backhaul

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