by NSR
The first few pages of the trade publication Digital Ship offers a glimpse of what is on the radar screen of many satcom service providers in the maritime market. In the last few months, vendors have made many announcements about new products and customer wins for either C- and Ku-band VSAT solutions or L-band satellite broadband services. The recent launch of FleetBroadband (the Inmarsat-at-sea version of BGAN), the addition of Iridium’s OpenPort (which reaches the 128 Kbps broadband threshold), and the continued push of VSATs from fixed satellite services (FSS) operators all attest to an increase in satellite supply and diversity for maritime platforms.
This increased business, along with development in digitization of process and management functions, has enhanced the quality and level of service offered at sea. As the field becomes more crowded with a wider variety of solutions, there is an overarching question as to which solution will win the hearts of the customers and command the seas from up above: traditional MSS or more FSS VSATs? Inmarsat, the traditional MSS operator, has fostered a very large base of customers (over 140,000) over the past 30 years that today form a base of potential users for either its FleetBroadband services or the competing C- and Ku-band VSATs.
Knowing that crew comfort and efficiencies in operations are key to mariners today who face diminishing shipping and travel budgets, it is necessary for satellite services providers to first consider that the pent-up demand from end-users for high speed communications is a means to bring more competitiveness, no matter the infrastructure. As an example, the availability of GSM picocells that can be installed on ships and platforms (increasingly replacing older expensive satellite services) with small base stations is part of the drivers that today affect packages and partnerships in place in the market. And for many shipping companies, as they sail the high seas, requiring wireless and radio technologies when it makes economic sense is still very much part of the equation.
To address this demand, the recent changes in the satellite supply side parameters of the equation are helping close the gap and fostering new customers. Inmarsat’s repositioning of its satellite fleet to offer global coverage as of the end of February 2009 consolidates a seamless global broadband services offering. Other companies are also extending ground and space infrastructure to offer sea-going vessels, offshore platforms and yachts of various sizes a wider palette of solutions.
As the following list of recent contracts shows, there are VSAT-based and MSS technologies today competing for a large base of users, and they are changing the way seafarers live at sea more than ever before:
· Bernard Schulte Shipmanagement signed a contract for 300 ships to be outfitted with Inmarsat’s FleetBroadband and use it to provide onboard GSM to its crews.
· Marlink announced a contract with AIDA Cruises to outfit eight of its ships over the next three years with SCPC C-band VSATs.
· DS Norden equipped its fleet with ELS-supplied VSATs.
· Singapore’s SingTel was chosen to supply Denmark-based Torm Shipping with a global VSAT service on 100 of its ships.
· Varum Shipping moved to Inmarsat’s FleetBroadband (from Ku-band VSATs) to take advantage of global coverage and smaller equipment on its 20 vessels-fleet.
· VSATs from Ship Equip will be equipping 25 vessels of Formosa Plastic Marine Corporation following successful trials held in 2007.
· SpeedCast was contracted by Selex Communications to provide VSAT-based maritime broadband service on six vessels.
More contracts will surely be signed over the coming months as the technology is showcased. Indeed, the maritime segment is quite adamant to test solutions and demonstrate them before embarking on large-scale procurements. It may take a while, but clients like to see the system running and tune it to the service and application suite most appropriate for its need before making up their minds.
But for others, the case is further demonstrated once the equipment is onboard and solutions are operational and a fleet-wide issue brings out the cost-savings brought about by broadband satellite communications links. To overcome hurdles across global fleets, satellite communications afford customers efficiencies and in some cases, demonstrate the ROI in one project. In one such case, Tyco Telecommunications reported they used an already-installed VSAT platform to allow its fleet of cable-laying vessels to receive a key procurement software upgrade in shorter time than other methods would have allowed, thereby saving them "...approximately $100,000", according to the project manager.
While L-band MSS services require clients to pay per-bit, users instead increasingly want a more predictable bill that favors packages for always-on communications to provide an easier metric to demonstrate a return on investment. FSS operators are banking on this aspect of demand and have shown how their ‘always-on’ solutions are better suited in many cases for high-end maritime users. To further help their market penetration, they are addressing the larger market for smaller vessels with VSATs that are smaller and expand coverage to new ocean areas. As a matter of fact, the coverage of Ku- and C-band for VSATs today is incrementally reaching that of non-VSAT solutions.
MSS L-band operators are also developing higher download speed solutions, and many of their customers (used to on-demand traffic and limited usage) are still happy with contended broadband products that peak at 500 Kbps, allowing them to get the same bill for more data than before. The maritime L-band market is currently "owned" by Inmarsat through two products, the new FleetBroadband and the older Fleet 77 with the new addition available in two ‘flavors’, the FB-250 and the FB-500. The Inmarsat IP-based products provide voice, data and video to ships with a quality and price point that was not available before in the L-Band spectrum. But the soon-to-be released lower bandwidth FB-150 terminal, which will come online in 2009, is a direct response to the less capable but still very valuable Iridium OpenPort solution.
The larger choice of L-band satellite products will mean more units installed on legacy user platforms and stiff competition for VSATs.
This all means that the competition is definitely increasing between L-band ship solutions (often considered too slow) and VSAT-based C- and Ku-band options (which come with an "expensive’ tag attached) and provide wider choices than were possible a few years ago. In the end, the most important aspect of the demand is how well each solution fits the bill for each customer.
For the foreseeable future, NSR expects mobile broadband satellite services to become a staple of the industry and continue to foster even more diversity in supply and demand. As such, the choice of a "winner" becomes a matter of measures for the customer. And at the end of the day, it is certainly going to be the customer who "wins" by benefiting from a wider array of services to conduct their business with greater efficiency and safety in the satellite maritime broadband market.
Information for this article was extracted from the NSR report entitled: Mobile Satellite Services, 4th Edition
