BT DSL under threat from cheap satellite broadband

Hughes Network Systems will shortly announce a broadband satellite service at a price comparable to consumer DSL.

The service, called DirecWay, will be available across Europe and will offer 400kbps, but only downstream, with an uplink provided via a dial-up modem. Users will only be able to get 56kbps upstream.

Hughes, which operates as HOT Telecom in the UK, plans to provide the service to other ISPs, who will determine the eventual price point, but it should sell in the region of £50, with a £200 installation fee says Sampath Ramaswami, Hughes' senior director of strategic marketing.

"We have 80,000 users for this service in the US, and I don't see why we shouldn't meet or exceed this number in Europe," he added.

"This service will be particularly useful for ISPs who want to offer large downloads, such as video clips or games," he said. "We also hope that a lot of users will upgrade to our two-way services."

Hughes and its main rival, Gilat Satellite Networks, also offer broadband services with a satellite uplink and downlink, through a range of ISPs including BT and Tiscali. But, with expected prices in the region of £100 a month, they are far more expensive than the £30 a month price of DSL, and unlikely to appeal to the 50 per cent of UK households where DSL is available.

However, satellite analyst Simon Bull at Comsys cast doubt on the viability of Hughes' downlink-only satellite model. "I don't like the idea of a satellite service with an earth return," he said. "I never have."

Hughes has been offering a similar service, called DirecPC, which users deploy with a PC card. However, the card led to serious reliability problems, and the service never sold well.
DirecWay uses a separate modem with a USB port, which should be easier to install and run.