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VSAT

Very Small Aperture Terminal

What is a VSAT?

A VSAT (Very Small Aperture Terminal), also known as a micro-terminal, refers to a wide range of remote terminals that are small in size but which nevertheless allow access to a larger data network. A VSAT allows users to access and manage data in real time and comes with many applications in finance.

 

VSAT

 

Summary

  • A VSAT (Very Small Aperture Terminal), also known as a micro-terminal, refers to a wide range of remote terminals that are small in size but which nevertheless allow access to a larger data network.
  • A Very Small Aperture Terminal is a technology that is used to manage data while undertaking high-frequency trading activities. A VSAT is essentially a data transmission technology that uses a telecommunication ground station.
  • VSATs are commonly used instead of large physical networks.

 

VSAT in Finance

A Very Small Aperture Terminal is a technology that is used to manage data while undertaking high-frequency trading activities. A VSAT is essentially a data transmission technology that uses a telecommunication ground station. It is used while trading because it efficiently transmits and redirects data in real time.

A VSAT is a small station, usually around three meters tall, and it receives and transmits data with the help of a satellite. It can transmit two types of signals to satellites in the orbit of the earth: narrow signals and broadband signals.

 

1. Narrowband data

Data that entails details about the point of sale transactions. Examples of such transactions include credit card transactions, supervisory control, polling, data acquisition data, or radio-frequency identification data.

 

2. Broadband data

Data that is essential for providing satellite internet access at locations that are not easily accessible. Examples of the same include Voice over Internet Protocol (VoIP) or video.

 

Advantages of Using VSATs

 

1. Eliminates structural issues in data transmission

VSATs are commonly used instead of large physical networks. This is because VSATs bounce the signal via an orbital satellite, as opposed to transporting that data through a physical medium, such as an Ethernet connection.

They essentially remove the possibility of any structural issues in the transmission of data. This is important while trading, because there may occur minute changes in stock prices over a very short period of time. VSATS also provide remote access with minimal infrastructure, which makes them convenient to set up, use, and maintain.

 

2. Easy to deploy

The biggest advantage of VSAT networks is that they are easy to deploy. The ground station essentially communicates with satellites, which then redirects the data to several hubs at different locations on the earth. There are lesser infrastructural requirements for setting up access to services even at remote locations. Examples of such remote sites include exploratory drilling sites, where there is a need for relaying drill logs back to headquarters on a daily basis.

 

3. Function independently of local telecoms networks

VSAT networks also function independently of local telecommunications networks. This makes VSATs an ideal system for reducing the risk of business recovery and for setting up backup systems. A backup system is used in cases where the wired network goes bust. Thus, the business can still continue operating smoothly by means of the VSAT network.

 

Disadvantage of Using VSATs

 

Latency

The biggest issue that arises while using VSATs is latency. Latency occurs because it takes a substantial amount of time for the data to reach the satellite dish and, subsequently, the station. This is because one part of the system is located in the geosynchronous orbit of the earth.

As a result, in protocols wherein a lot of back and forth communication is required as opposed to one-way data transfer, a time lag is experienced. Moreover, due to unanticipated or external events, such as bad weather conditions or tall buildings blocking the data transmission path, a further lag may be experienced.

 

Additional Resources

CFI is the official provider of the global Certified Banking & Credit Analyst (CBCA)™ certification program, designed to help anyone become a world-class financial analyst. To keep advancing your career, the additional CFI resources below will be useful:

  • Algorithms
  • Fintech (Financial Technology)
  • Trading Mechanisms
  • Types of Financial Analysis

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