Searching for an alternative to its land-locked local telephone company, Trans Financial Bancorp has become the latest to join a coterie of banks that have installed their own satellite communications networks.

Officials at Trans Financial, a $1.2 billion-asset institution based in Bowling Green, Ky., said the move was driven by the bank's need to improve its network service quality.

"With the terrestrial communications lines, response time on the network was not what we wanted and [repair] time was far from what we wanted," said Terry Goettsch, executive vice president of information technology. "These are common problems, and we feel like we've found a relatively uncommon way to fix them."

Cost of Hardware a Deterrent

While several large financial institutions, including First Union Corp., Fleet Financial Group and Barnett Banks Inc., have installed satellite-based networks, the industry as a whole has been slow to give up the practice of leasing land lines from phone companies.

One of the knocks against satellite communications is that a network requires a fairly significant investment in hardware.

Trans Financial, for example, needed to purchase an antenna for each of its 27 branches as well as a communications "multiplexer" that acts as the hub of the network.

A piece of data sent from one office to another flows first from the antenna at the sending office to Trans Financial's multiplexer in Kentucky.

The multiplexer compresses the data and sends it to another multiplexer owned by the satellite communications company - in this case, Avdata Systems Inc. in Atlanta.

The data is then bounced off a satellite and gathered by the antenna at the recipient branch.

All of this hardware will pay for itself in about five years, according to Mr. Goettsch, who declined to specify the cost of Trans Financial's system.

Easier to Add Products

The most oft-cited positive aspect of satellite communications networks are their reliability - typically around 99.9%, according to industry experts.

But beyond that, Mr. Goettsch also noted that the new network, which is expected to completely installed by the end of this week, will allow Trans Financial to add new products more quickly than was possible with land-based lines.

"We are considering doing some video conferencing and maybe hooking some ATMs at convenience stores to the network," he said. "With the new network we won't be waiting for the phone company to fill our requests for more band width, so we are in much better control of our destiny."

Trans Financial considered installing a network based on microwave technology but was dissuaded by the licensing fees and limitations associated with the Federal Communications Commission's regulation.

Satellite communications networks are not currently subject to such fees or regulation, Mr. Goettsch said.

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