Survey: Financial services, oil and gas industry top C band VSAT users in Nigeria

Nigeria’s banking and oil and gas industry as well as GSM backhaul operators are the largest VSAT customer service segment, accounting for over 60 per cent of the total C band usage in the country, according to a report in a recent survey.

In the banking industry, for instance, the branch-wide networks and core banking applications are running on C-band VSATs, just as the majority of ATM networks are on Ku-band.

According to report, C-band VSAT is the main e-channel choice for banks. Nigeria’s major banks have VSAT networks of 35-40 sites across the 36 states, while some have much larger networks, going up to 300+ sites.

According to a service provider, Zenith bank has deployed over 300 C-band VSAT sites between March and July 2014, and at the end of 2016 the bank has added more sites as it expand and upgrade it ATM network. Banks use C-band VSATs to support interbank networks (Metro Area Networks (MAN) and Wide Area Networks (WAN).

In addition, Vodacom has another 60 sites running on C-band for Zenith bank, providing broadband connectivity between the head office in Lagos and remote branches. This includes remote branches in Sierra Leone and Ghana as well.

Based on new release, MTN Nigeria observed that it have few (<10) VSAT sites on C-band for bank networks.  While equipment vendor HNS also reported that its organization have supplied C-band VSATs for a service provider that runs around 50 sites exclusively for banks and for another service providers managing around 200 sites for banks and enterprise applications.

Apart from the local bank network, international banks also have C-band remote sites running in Nigeria. For example, African Development bank has 65 sites in C-band deployed across Africa, including sites in Nigeria. The case is similar for other organizations like World Bank and VISA, which typically has 50-65 sites across Africa including those in Nigeria.

It is estimated that the C-band VSAT market for the banking sector currently stands at approximately 1,500 sites including the community bank network. Future growth drivers could be the ongoing domestic and international expansion of the Nigerian banks, partially aided by the financial inclusion project of Central Bank of Nigeria.

While the financial services industry took the lead, the oil and gas industry is also a large and growing segment for C-band VSATs in Nigeria, particularly in terms of bandwidth usage per site. According to Euroconsult, the service level availability requirements for the oil and gas segment typically is above 99%, which can only be met by C-band VSATs. In a report by the national producer NNPC, the corporation  have used only C-band VSATs since its beginning in 1977, as all of their remotes are in high rain areas where during rainy season Ku-band links are cut for around three hours per day on average. Despite its reliance on C-band, the company is only able to achieve around 98% availability due to power outage issues. VSATs are used for providing high-density mesh voice and fax and data interconnectivity between sites and the head office.

They are also used for monitoring pipelines and petrol stations, through live streaming of metering data on the level/volume of product such as crude oil, petrol, kerosene, carried through pipelines and stored at stations. According to report, oil and gas companies involved in exploration and production have typically around 20-25 sites. The companies involved in both production and distribution use 50-60 sites, with the largest networks going up to 350 sites.

According to Euroconsult, NNPC typically has approximately 50 remote C-band sites managed by global service provider Gilat Satcom, mainly for pipeline monitoring. The sites are spread across the country including presence in all 36 states. The company uses 2 to 5 Mbps C-band links to connect their eight nodal stations and also 512 to 1000 Kbps links to connect their 42 petrol stations, utilizing in total around 20 MHz of C-band capacity.

However, the number of sites has grown by about 25% in the last five years. The company is presently adding more sites, to connect their retail franchise petrol stations  and overhaul it disaster response regime.

These new sites will be carrying comparatively lower data rates at 256 to 512 Kbps and will be increasing the current bandwidth usage from 20MHz to 36MHz of C-band capacity.

It has been estimate that the C-band VSAT market for the oil and gas segment counts up to 550 units including those for exploration, construction, production and distribution. The majority of the sites are used in the distribution segment, including over 300 new TDMA sites installed by NNPC to connect retail petrol stations. Other companies should mainly use SCPC links with data rates typically above 1 Mbps to connect to their exploration and production sites.

Under the liberalized VSAT license regime, the DRP (Department of Petroleum Resources) allows international service providers to provide satellite connectivity services directly to customers in the country.

Typically, international energy companies operating in Nigeria, requiring satellite or fiber networks, earlier were forced to use small, local providers with limited capacity.

Presently, C-band usage for connectivity have increase as customers are able to leverage one vendor for their connectivity requirements in Nigeria and in the rest of Africa.

So far, international firms, Nigerian Agip Oil Company Limited (NAOC), and Shell are expanding their C-band VSAT connectivity for the provision of C-band hubs and around tenth of remotes including bandwidth provisioning, for connecting its offshore sites with hubs in Port Harcourt and Lagos.

Global satellite service provider ITC global manages around 40 sites in Nigeria for oil and gas companies using around 95 MHz capacity.

One European satellite service provider is currently managing over 50 C-band sites for oil and gas companies in Nigeria. Approximately half of these sites are i-Direct TDMA sites and the rest are SCPC sites. In total, the sites use around 20 MHz capacity (40 Mbps), including another 15 sites for mining construction companies.

In addition, Hughes manages no fewer than 50 sites in Nigeria for oil and gas construction companies. According to HNS, their customers typically have around a few dozen VSATs per network.

However, a Nigerian service provider stated that it has three sites for their customer CONOIL. The sites are 3E1 (~7 Mbps) links and use around 11 MHz of C-band capacity in total. The company now plans to add a few more sites (less than five) for CONOIL and also for a new oil and gas customer in the coming months.

A leading satellite provider in the region, SkyVision, is currently running multi-year contract from South Atlantic Petroleum (SAPETRO) to provide voice and data solutions and services to connect the company’s offices and operational sites.

Anticipating the growth potential in the oil and gas market, SkyVision has been in the process of the establishment of hubs and PoPs in Lagos and Abuja over the past decade.

Despite what appears as saturated satellite market, the future growth driver would be the several proposed upstream deep-water projects. Along with the new site deployments, one service provider also pointed out that new applications like HD video transmission from offshore remotes are now driving the bandwidth leased by their customers.

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