From humble beginnings as a carrier/VSAT connectivity provider, HECL is now a recognised end-to-end service provider. Shipra Arora discovers how a prescient and proactive approach helped HECL ensconce itself in the broadband satellite market

According to Banerjee, ‘services’ is the real benchmark of HECL’s performance and operations

When it was set up in 1992, Hughes Escorts Communic-ations (HECL) started off as a carrier/VSAT connectivity provider. Today, with services like managed networks, Internet access, education and ASP applications such as e-CRM and e-Procurement, this Delhi-based joint venture between Hughes Network Systems and Escorts has evolved into a versatile value-added service provider.

According to the Comsys Report 2001, HECL enjoys a formidable position in the Indian market. For the year 2000-2001, HECL bagged a 40 percent share of the Indian TDMA service market (terminals) and a 23 percent share of the Indian DAMA service market (terminals).

Partho Banerjee, CEO, Hughes Escorts Communic-ations, recalls that within six to seven months of being granted the license in 1995, the company was ready to roll out its services. This is because the company had started the spadework for its services way back in 1989. This proactive approach has worked well for HECL. For it can today claim a 95 percent customer retention rate.

Within a year of beginning operations, HECL had 50 customers in its portfolio. At present, the company has about 200 customers with over 6,000 VSATs installed in over 632 towns and cities across the country. Its client list too is impressive, with names like Hindustan Lever, Philips, Bank of America and Siemens. Today, it has nearly 39 of the top 50 brands in the country as its clients.

Currently, contributing about 44 percent of the total revenue, Banerjee is working towards growing the share of services beyond 50 percent in the next one to two years. And with the company constantly enhancing its value offerings, the services segment is slated for a 30-35 percent CAGR over the next five years, up from the current 25 percent. “The emphasis for the company over the next few years will be towards building up a strong portfolio of value-added offerings to give us a better positioning over our competitors,” says Banerjee.

Slices of the HECL pie
Targeting the enterprise, extended enterprise (which includes a company’s suppliers, dealers, etc.) and consumer segment, HECL is concentrating its business operations in the following areas.

Direcway Network services - HECL began providing VSAT satellite communication services through its hub earth station in Gurgaon in February 1995. This point-to-point connectivity service, called Direcway Network Services (then known as Hughes Net) provides interactive data, voice, and fax communication facilities to customers.

Having gained expertise in these existing operations, it was time for the next phase of the company’s growth. This involved adding value to customers’ networks by providing services like dedicated hub network services and managed network services with key features like program management and project engineering. From 1997 onwards, there was planned and deliberate move towards system integration and network management. The idea was to move beyond networking, into managing, consulting and audit services as well.

Direcway Broadband services - Next line of the company’s operations included powering applications, and fulfilling a client’s hosting and connectivity needs. The launch of Internet access and application service provider (ASP) services helped HECL achieve this goal, as it allowed HECL to add value to a client’s business processes and networks. All these services have evolved as part of a comprehensive strategy to offer business customers end-to-end vertically integrated solutions.

In July 2000, after being granted a category ‘A’ ISP license, the company launched its Internet services via VSAT, aimed at the corporate sector. This meant building up its application expertise and getting involved with the customer’s applications like ERP and supply chain management.

Donning the ASP mantle, the company set up its central hub to offer value-added application services like ERP, CRM and data warehousing to customers. For offering these services, that are primarily being targeted at the extended enterprise, HECL has forged alliances with various partners like Talisma and CommerceOne. The company is currently implementing enterprise-wide networking solutions like e-Distribution, e-CRM, e-Marketplace and HR services.

“Working on critical applications of our customers helped in establishing our credibility and taking our partnerships to higher levels,” explains Banerjee. Further, the company’s data centre has been co-located with the HECL hub to provide Web-hosting and co-location services apart from messaging, chat and Web mail services to its customers.

HECL’s data centre also provides a ‘SecureDial’ service, which is a virtual private dial-up network provided by the company’s Internet Services Group (ISG). This service provides for various other features apart from the primary role of enabling secure transactions to be conducted across an ordinary dial-up connection by the dealers and suppliers of a user company.

In early 2001, HECL tied up with various ISPs to provide terrestrial Internet access from more than 40 locations across the country and kicked-off its OneConnect Service. This gave HECL a comprehensive coverage of the state capitals and important cities across the country as well as the ability to extend its ISP services to more customers. Moreover, all the OneConnect links are now upgradable to the VPDN-enabled SecureDial service. This strategic move of focusing on the Internet business has been in line with HECL’s strategy to build upon its image as a data information service and distribution company.

Education & Training - HECL is now focusing on delivering interactive education and training services through its Direcway Global Education service. The service uses a combination of broadband satellite technology and interactive learning technologies to deliver distance learning and education services to both individuals and companies. As part of its services for individuals, HECL has partnered with several global and domestic universities and institutions like IIM, Kozhikode and XLRI,Jamshedpur. On the global front it has tied up with educational institutions in the United States.

According to Banerjee, HECL was one of the earliest adopters of Ku Band frequencies in the country. It launched the Ku Band services with an investment of Rs 60 crore being made into the setting up of Ku Band hubs. (when was the investment made) Having campaigned hard in favour of it, Banerjee claims that the Ku Band service via GE-1A (GE Americom) satellite is four times more powerful than the INSAT series. Thus allowing the company to deliver bandwidth hungry features like always on, Turbo Internet, Multimedia applications, interactive distance education, video broadcasting and multicasting. Banerjee says with this service HECL has redefined the meaning of the term value added services.

Staying focused on the customer...
As part of its future plans, HECL is looking at aggressively tapping the retail services market. The company is currently building upon the platform, which will be commercially available in the next 4-6 months. Elaborating on the retail services, Banerjee explained that the services would be targeted at individuals but with the corporate segment in mind. This will allow companies to provide their customers, located across the country, access to their services through HECL’s network of retail self-service terminals.

Apart from this, the company is also looking at strengthening its presence in the end-consumer segment. At present, it has a user base of about 250 customers in this segment, that constitutes around five percent of HECL’s total revenues. “Though the consumer segment is hardly one percent of the total broadband market, in absolute numbers it is fairly huge. This throws open tremendous opportunities for the company to tap,” says Banerjee. HECL plans to increase the revenue contribution of this segment to 10 percent in the next one year. In fact, the company is hoping to break-even its consumer business by the year-end. (which year end)

HECL also plans to bring its DirectPC services to home, SOHO and professional users. The DirectPC platform enables broadband Internet delivery. Though, currently, this offering is largely targeted at providing Internet access, the company has outlined plans for further thrust in the consumer segment. However, as Banerjee maintains, the Internet will continue to be a primary driver for broadband in the consumer space. As part of its Internet access service the company offers two modules involving up front costs of Rs 25,000 and Rs 1.25 lakh each, in addition to charges of about Rs 1,000 per month for 64 Kbps of bandwidth.

On the enterprise front, which continues to be the dominant market for HECL, the company has in tow a slew of value-added offerings at more affordable price points. This will be possible through its SpaceWay project. SpaceWay, is an advanced satellite system that makes high-speed broadband applications available on demand to the masses, whether corporations or consumers at low cost. This will allow the users to transmit and receive video, audio, multimedia and other digital data at a fraction of the speed of available by conventional phone lines. The technology too is cost-effective with video-conferencing rates starting as low as 5 cents per minute, says Banerjee. “This technology will be able to compete with next generation terrestrial fibre and will throw open immense opportunities for us as it can provide powerful value-added services,” he adds.