# Very Small Aperture Terminal (VSAT): Definition and How It's Used

## What Is a Very Small Aperture Terminal (VSAT)?

A very small aperture terminal (VSAT) is a two-way ground station that transmits and receives data from satellites. A VSAT is less than three meters tall and is capable of both narrow and broadband data to satellites in orbit in real-time. The data can then be redirected to other remote terminals or hubs around the planet.

### Key Takeaways

*   A very small aperture terminal (VSAT) is a data transmission technology used for many types of data management and in high-frequency trading.
*   VSAT can be used in place of a large physical network as it bounces the signal from satellites instead of being transported through physical means like an ethernet connection.
*   Because the signal needs to bounce, there can be a latency issue that wouldn't exist with a physical network. However, most users feel this is the price you pay for remote access and less infrastructure and consider it a fair trade.
*   Weather can adversely impact the efficacy of a VSAT network.

## How a Very Small Aperture Terminal (VSAT) Works

VSAT networks have a number of commercial applications, including, perhaps most notably, [enterprise resource planning](https://www.investopedia.com/terms/e/erp.asp) (ERP). The use of VSAT to track [inventory](https://www.investopedia.com/terms/i/inventory-management.asp) was one of the many innovations Walmart pioneered in retail to effectively manage its vast inventory in real-time and reduce delivery costs between the warehouse and stores.

Combined with the [hub system](https://www.investopedia.com/terms/h/hub_and_spoke_structure.asp) of inventory storage, VSAT allowed Walmart to stock its stores more precisely and reduce how many times a product had to move between locations before being sold. Other manufacturers use VSAT to relay orders, check production figures in real-time as well as other functions that are otherwise handled over a wired network.

The [National Stock Exchange (NSE) of India](https://www.investopedia.com/terms/n/national_stock_exchange.asp) has one of the largest VSAT networks in the world and offers it as one of its connectivity options. VSAT provided the NSE with a way to offer access in areas where wired options are limited. With the exception of the occasional sun outage due to solar radiation distorting signals from the satellite, the VSAT network has held up.

## Advantages and Disadvantages of a Very Small Aperture Terminal (VSAT)

VSAT networks have a big advantage when it comes to deployment. Because the ground station is communicating with satellites, there is less [infrastructure](https://www.investopedia.com/terms/i/infrastructure.asp) required to service remote locations. This was one of the reasons Walmart chose VSAT as it started out heavily leveraged to rural America, where telecommunications infrastructure was less dense than in the cities.

This has made VSAT networks an ideal choice for providing connectivity to remote work sites, such as exploratory drilling sites that need to relay daily drill logs back to headquarters. VSAT is also independent of local telecommunications networks, making it an ideal system to back up wired systems and reduce [business recovery risk](https://www.investopedia.com/terms/b/business-recovery-risk.asp). If the wired network goes down, a business can still go on using the VSAT network. 

However, VSAT does have limitations. The most obvious is latency, as it takes time for information to reach the dish and the station due to one part of the system being way up in geosynchronous orbit above the earth.

In other words, protocols that require a lot of back and forth communication rather than one-way data transfer experience lag. The signal quality can also be affected by the weather and other buildings getting in the way.