Internet, via satellite: the next big thing

October, 2002

Rural small businesses are logging on to high-speed Internet access by satellite more than ever, so they can compete with their big-city rivals.
It's the only way many in remote locations can get true "two-way" broadband service cheaply and efficiently -- without moving shop. They now have the ability to be on par with businesses in urban centers. There's no other way for those businesses to get a high-speed connection unless they want to spend several thousands of dollars on hardware -- and probably several hundreds more a month for bandwidth."

Much like direct-to-home satellite television, users must buy the hardware required for the service. The charges are $1099 for a dish and transmitter/receiver. At that price, the service is more affordable for residents in remote locations. They're signing up for the service. So are schools, native communities and health officials in northern locales.

Even people who know a thing or two about money think high-speed Internet access by satellite will shape the nature of Canada's small-business sector in the coming decade. "This is huge," says Benjamin Tal, a senior economist at Canadian Imperial Bank of Commerce. "Think of the implications: You can run your business hundreds of kilometers from the nearest city; you can market your products, research new suppliers and communicate with clients. "The fact the service is relatively cheap right now means it's not a luxury any more," he adds. "It's going to be a necessity -- like a telephone -- for small businesses in rural areas."

Tom Bratrud Jr., a self-confessed "total techno-nerd" and president of Delta-P Test Corp., an Alberta oil and gas well drill stem testing company, is intrigued by the new service. He and his 10 employees have been using a Direcway dish to connect with clients from remote locations across the province.
"It's allowed us to do things we couldn't do previously," Bratrud says. "We've used it to transmit data 'real time' from a well site to our customers in Calgary, so they can evaluate the information. "It's quick and secure and relatively cost-effective -- compared to using a satellite phone and paying two or three bucks a minute," he adds. "Besides, when you're testing a drill stem, every minute of downtime you save a well operator is a significant cost-saving."

For Ray Carmichael, accessing the Internet by satellite saves a ton of time.
The president of CropSmart Canada Inc. helps Maritime farmers to manage their crops by scanning their fields from a plane equipped with remote sensing equipment. But sending the data to clients and crop specialists from his office near New Brunswick's border with Maine was difficult.
"We use GIS and GPS software, so our files are huge," Carmichael says. "They'd take hours to send through a phone line. Sometimes, we'd just ship them out on a disk."

No matter what service or product a small business provides, Tal thinks an Internet connection is crucial. But even more important is what the business does with it. Although 60 to 70 per cent of small business in Canada have Internet access, Tal says only 6 per cent have a Web site through which they can sell goods and services over the Internet. That figure is hardly in the same neighborhood as usage by larger companies, but it is starting to change.
"The Internet provides small businesses with the advantage that large businesses have," Tal explains. "It can really offset the advantage and economy of scale that bigger businesses enjoy."
"It's not just an option for small businesses, but a necessity."