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(Nikkei BP Group)

(No.1 High-Tech News Site in Japanese)

  • More Businesses in Japan Use Satellites to Tap Internet
  • October 26, 1998 (TOKYO) -- The basic infrastructure now exists in Japan to enable business users to distribute data over the Internet via communications satellites.
    Conventional networks have difficulty coping with applications which involve transmitting large volumes of information at high speeds, such as when handling image and voice data.

    Satellites make it possible for the bottlenecks in these existing networks to be bypassed.

    Back in August, Mycal Corp., a major retail company, started using satellite connections for part of its in-company intranet. Another companies also launched a new membership-based service targeted at specific individual users, selling raw data and computer software.

    Satellite Internet Services Become More Common

    Satellite Internet services use satellite links to allow both ordinary Internet users and people using company intranets to benefit from greater data transmission speeds. Conventional lines are still used when users access their Web server (upstream use), but satellites are employed when they want to download data from the server (downstream use).

    Satellite Internet services have actually been available in Japan since January 1997, when Space Communications Corp. first launched its service, and 1998 has seen large-scale operators entering the market in rapid succession (See table).

    Recently, more specialized services catering to business users have been appearing. For example, both Space Communications and Direct Internet Corp. (DIC) have recently improved their services, the former in August and the latter in September, in an effort to attract more business.

    The two companies have upgraded service access software, and it is now possible for users who have their PCs hooked up to the Internet via leased lines to make use of the services. Previously, it was only possible for stand-alone PCs to be used, connected via modems.

    NTT Satellite Communications Inc. (NTTSC) has also developed a special adapter to enable its services to be used for intranet connections.

    Competition among operators providing dial-up access for private users is also becoming more fierce. NTTSC has plans to launch a new service aimed at these individual users in December. It will offer a maximum speed of 1 Mbps during data downloading. One of its main sales points will be that it shares some common features, including the same antenna, with satellite broadcaster SKY PerfecTV!, a company that has already garnered over 800,000 subscribers.

    DIC currently offers a service with a maximum data transmission speed of 400 kbps. In response to the threat it faces from NTTSC, in June the company lowered the price of its hardware kit, which includes its parabola antenna, and then followed that in August by also cutting the fees it charges users to use the service.

    Also, to coincide with the launch of NTTSC's service, the company plans to offer data providers the use of servers equipped with equipment for sending signals to satellites, free of charge up to a maximum of 2GB, which will allow data to be delivered to individual users at greater speeds.

    Many Advantages, But Limited Users

    There are many advantages to satellite Internet services. Access speeds are considerably faster, especially when transmitting heavy loads, such as data which contains video or still images.

    Another good point is that they also reduce the complexity of all the lines that are necessary to make up conventional intranets and other networks. Also, and in contrast to CATV Internet services, with satellite Internet services users can be located anywhere, as long as they are within the satellite's coverage area.

    But just because satellites are used, it doesn't necessarily follow that the number of service users will grow quickly.

    They will only switch over from their current services when the existing infrastructure fails to keep up with their needs. For that reason, service providers targeting individual users are not expecting to see any great growth in the number of people signing on for their services.

    Even combining future forecasts from both NTTSC and DIC, the anticipated number of private users in the spring of the year 2000 is only likely to be a little over 100,000. That is a very small figure when contrasted with the 10 million Internet users in Japan.

    Yutaka Nagai, executive vice president of NTTSC, says that current satellites have enough capacity to cope with around 400,000 users. If, for any reason, user needs suddenly exploded and demand shot up, then, for the time being, 400,000 would be the limit.

    This upper limit for the number of users is a big restriction as far as services targeted at private users are concerned. Particularly with regard to services with an unspecified large number of potential users, there is a need to look closely at ways to come up with business models and to carefully select the range of applications.

    Combining with Company Intranets

    Satellite Internet services do have their limitations, but business users are aiming to employ them to improve intranets.

    Mycal has 247 retail outlets spread across the country. The company has introduced a satellite Internet service in order to facilitate the delivery of data, including video and still images, to each store. Until now, the company has had to arrange for the distribution of its sales promotion material, recorded on video CDs, to each individual store.

    With the new satellite service, it is now possible for the stores to get hold of this type of data by downloading it on demand. Other materials which contain image data, including advertising leaflets and product catalogs, can also be distributed easily.

    A new feature has been built into to the company's existing 64 kbps intranet to enable data to be sent via a satellite. It is now possible to download data at 400 kbps, which is around six times faster than a intranet. The costs involved in running the new system are said to be less than half those incurred when using 512 kbps lines to connect 140 stores. All this has been realized with an initial investment of about one million yen (US$8,400) per store.

    Progress is also being made in developing applications for educating employees online. NTTSC is currently in the process of developing research software that can display several teaching materials on a PC screen at the same time. In addition to a video image of a lecturer giving a lesson, other related materials can also be seen by the viewer. These could include other images or written materials to supplement the class. In this way, employee education will be achieved more effectively.

    Services Targeted at Individual Users Also Being Launched

    For businesses that deal with a large number of individual customers, it is possible to operate a satellite Internet service, provided that people within the customer group who are interested can be identified.

    For example, a company called Nagase which operates a cram- school business is currently studying the feasibility of offering an education service for students preparing for university entrance examinations. The service would include moving images and, unlike if just the Internet were to be used, the system would be capable of clearly displaying writing on blackboards so that students would have no trouble reading it. If an on-demand service was to be used, then students could be charged according to the number of lectures they view.

    In September, Digital Archive Japan Inc. (DAJ), a company dealing in digital data sources, launched a new service based on a membership system, selling digital data to people such as SOHO designers.

    Users who subscribe to the DAJ service get the company's receiver kit free of charge. Then, they are able to download raw data, a maximum of over 30MB, at high speed. One month after the service was formally launched, the number of subscribers stood at around 50, and most were also subscribing to the DIC service.

    In the same way, Adobe Systems Co., Ltd. in Japan will be launching a trial version of similar software (maximum 40MB) and other free software, all of which will be distributed from NTTSC's servers. The aim is to try to create a service where registered users can purchase software upgrades online and have them delivered directly, via satellite links.

    Table: Charges for Satellite Internet Services

    Services can be broadly divided into two types: those aimed at business users and those for private users.
    Initial costs for business services differ according to the number of nodes in the network.

    Business use

    Service provider

    Basic monthly fee

    Fee system


    Base station

    Service start

    Space Communications

    120,000 yen + 1,300 yen for each terminal

    Data surcharge (200,000 yen per month for up to 4 GB, and

    50 yen per MB thereafter)

    Superbird A, Superbird C

    Ibaraki, Japan


    Direct Internet


    Data surcharge (165,000 yen per month for up to 4 GB, and

    60 yen per MB thereafter)


    CA, US


    Bekkoame Space Net

    48,000 yen for each terminal (1.5Mbps)

    Bandwidth surcharge (480,000 yen per month for 1.5 Mbps)


    CA, US


    Japan Satellite Systems

    120,000 yen + 1,000 yen for each terminal

    Bandwidth surcharge (5,480,000 yen per month for 1.5 Mbps)

    JCSAT 1, JCSAT 4



    NTT Satellite Communications

    120,000 yen + 800 yen for each terminal

    Bandwidth surcharge (5,300,000 yen per month for 1.5 Mbps), data surcharge (200,000 yen per month for up to 4 GB,

    and 50 yen per MB thereafter)




    Private use

    Service provider

    Initial costs

    Fee system


    Base station

    Service start

    Direct Internet

    49,800 yen + fee for antenna installation

    Data surcharge (5,500 yen per month for up to 5 GB, and 60 yen per MB thereafter)


    CA, US


    NTT Satellite Communications

    30,000 - 60,000 yen + fee for antenna installation

    Data surcharge (4,000 yen per month )




    (return to news)

    (Toshiaki Matsumoto, Staff Editor, Nikkei Multimedia)

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    Nikkei BP BizTech, Inc.
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    Updated: Sun Oct 25 18:16:28 1998 PDT