Telesat Canada seeing initial success with new high-speed Internet offering

Telesat Canada is experiencing early success with its new high-speed Internet service, dubbed High-Speed Internet (HSI), launched almost three months ago. The company’s director of business development says that within the first several weeks of offering the service, 100 subscribers signed up for the system. Steve Lowe says that while actual subscriber numbers may seem low, uptake of the service shouldn’t be viewed as slow. "It’s starting off a little bit slower than some people would have liked, although I’m not too surprised. The sales cycle for a new technology like this is typically long. Our sales cycles in the past for an enterprise with a hundred or more sites is 12 to 18 months," he tells Report on Wireless. "In this case, we have a lot of larger networks that are interested and are in trial mode, so two months after (launching) it’s looking very positive." The HSI service is priced at between $200-$250 per month with a five-year service agreement. Equipment and installation for most regions of the country costs approximately $3,500. The new HSI service will be marketed by a new division created within Telesat. "We see success of this service being in the 5,000 to 10,000 users over three years (in North America). We’re still confident that will be achieved," Lowe notes. That number should be between 5,000 and 6,000 in Canada, he adds. Jumping into this market was necessitated by an increased push by the competition, namely Hughes Network Systems, into this high-growth sector. Companies such as C-COM Satellite Systems Inc. and LinCsat Communications Inc. are reselling Hughes’ DIRECWAY service to small- and medium-sized enterprises (SMEs) in under-served and unserved areas of the country (RoW, July 9/01; Jan. 22/02). "(Hughes has) signed up some resellers, which are going after the same market that would have been our Ka-band market," Lowe notes. "We just felt that we wouldn’t sit and let the momentum build without also being in the game." Telesat formed a partnership with the U.S. subsidiary of Gilat Satellite Networks Ltd., Spacenet Inc., which allows Telesat to maintain control of the service from end to end. "They were more than willing to sell us the complete hub, the training, everything we required to be our own service provider, Lowe explains, adding that this was an important factor in choosing Gilat over Hughes. Being a service provider will be a fundamental difference that enterprises will find important in choosing a service provider over a reseller, Lowe believes. Telesat will serve the large corporate enterprise market with 100 or more sites, while two smaller resellers will concentrate on the SME market. The BCE Inc. subsidiary uses Vancouver-based Infosat Communications and RAMtelecom of Ottawa as its two resellers. The HSI service is currently offered over existing Ku-band facilities on the Anik E2 satellite. When E2 comes to the end of its life in late 2003, the service will be migrated to Anik F2, which is scheduled to launch late next year. Lowe expects commercial service on F2 to be available near mid-2004. At that time, customers will be able to upgrade from Ku-band systems to newer advanced systems operating in the Ka-band. Lowe doesn’t expect everyone to switch, though. If a particular customer has enough bandwidth and the system continues to suit it, he doesn’t see why it would switch. The arrival of Ka-band will not only provide corporate users with increased bandwidth and multimedia capabilities, the consumer market will also benefit from the introduction of these types of systems. Lowe believes that for Ka-band to be successful, there will have to be a major push and uptake in the consumer market.

Telesat Canada seeing initial success with new high-speed Internet offering

News | July 9, 2002

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