Inmarsat’s new, Fleet Broadband services is facing never anticipated competition. Its huge investment in its i4 satellite system and its revenue stream are being challenged by the proliferation of Ku Band deep ocean coverage and new hybrid VSAT/L Band solutions as well as by Iridium’s new OpenPort service. For those merchant shipping users that demand high capacity broadband, typically large fleet owners, rising demand for fixed priced broadband is making Inmarsat’s “pay-by-the-byte” services unaffordable at high usage levels and price-challenged at low usage levels. OpenPortsm offers volume based 128 Kbs service will be available at a cost significantly lower than Inmarsat.
With fixed price broadband, large fleet owners and other bandwidth hungry users can consolidated routine tasks onshore reducing personnel at sea, PCs can be maintained remotely limiting the need to send personnel to the ship, weather data can be received and downloaded into fuel optimization programs, documents can be transmitted ahead of ship arrival thereby saving down time in port and crew attrition can be reduced through the provision of web surfing, video and photo transmission, GSM services including SMS, Telemedicine, and entertainment services – all applications that would be cost prohibitive with “Pay-by-the-Byte” services – can be done with fixed price VSAT.
As demand for broadband in deep ocean routes rises, Inmarsat’s heaviest users can be expected to migrate to new Ku Band VSAT/L Band hybrid solutions.
Why a Hybrid VSAT/L Band Solution
Essentially, owners and operators of major commercial shipping fleets demand global coverage and low fixed cost broadband. Since Ku Band VSAT provides low cost fixed price coverage over only 70% to 80% of the globe, a clever hybrid infrastructure has been devised that combines VSAT with L Band backup. Essentially, VSAT and Inmarsat or Iridium are deployed together and data streams are automatically switched between them. This novel solution is facilitated by new, “least cost routing devices” that automatically select the lowest cost transmission alternative available. In addition to routing, the devices often incorporate IP acceleration, store and forward, web caching and VPN capability. Employing the “store and forward” capability allows users to store large non-time critical files for later transmission over low cost Ku infrastructure. One manufacturer even includes software that restricts the download of web page graphics and/or http traffic during periods when fixed price broadband is not available. In addition to switching, this infrastructure requires that the VSAT antenna be re-pointed as the vessel “roams” across satellite beams.
ComtechEF Data’s Vipersat Division and iDirect have only recently introduced this capability to market. Owners of Vipersat and iDirect Hubs can add appropriate hardware aboard ship and software that automatically re-points a Seatel Antenna as the vessel moves under different satellite beams. It is also possible to maintain the same IP address throughout the switching process.
Dramatic Cost Savings
In fleets today, most global shipping uses less than 200 Megabytes of data per/month. The limited usage is due largely to the fact that existing services such as Inmarsat are so expensive on a per byte basis that usage is throttled.
Yet, when you talk to large fleet owners, they want to run applications and services that would boost data usage into the range of Gigabytes per/month per/ship. Consider that a ship using 1 Gigabyte per/month could easily spend $6,000 to $10,000 per/month (depending on pricing plan). Multiply this by a fleet of 50 to 100 ships and the cost soars. Using a Hybrid Ku/VSAT system and assuming 20% Inmarsat or Iridium usage, monthly cost are cut roughly in half with saving increasing even more dramatically at levels above 1 Gigabyte per/month.
The implications of this shift are clear: Inmarsat and other “Pay-by-the Byte” providers are likely to be confined to two applications: as primary transmission on ships with limited data transmission needs and as back-up for VSAT. In the future, heavy users will increasingly gravitate towards a hybrid solution and the need to provide back-up will continue to diminish along major shipping routes as Ku Band coverage of ocean routes increases further limiting the need for L Band backup.
Market Opportunities
The rising demand for fixed priced broadband at sea will create opportunities for satellite operators, integrators and manufacturers of stabilized satellite antennas. In addition, widespread availability of fixed price broadband at sea will create a new market segment for those providers capable of supplying broadband dependent software applications and crew communication entertainment and training services.
Conclusion
Just as low, fixed cost broadband has become the norm in our home and office environments, we can expect the same sort of services to become increasingly common in global merchant shipping markets. The recent spread of Ku Band, partially a result of Boeing’s abandoned Connexion service, is proving to be a significant catalyst for change in maritime communications.
Hybrid VSAT/L Band infrastructure will by first adopted by large fleet owners in Northern Europe and can be expected to spread to Greek and Asian markets in the next two to three years. As more and more vessel owners and operators experience the benefits of high speed, fixed cost connectivity, broadband will become commonplace at sea.
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Alan Gottlieb is a distinguished consultant to the satellite and telecommunications industry. His firm, Gottlieb International Group Inc., specializes in market research, business development and sales into international oil and gas and maritime markets. His careers encompasses a diverse telecommunications background in cellular infrastructure, handsets, mobile commerce and satellite. He has served as Vice President of Sales for Audiovox, Director of Sales for Southeast Asia for COMSAT and Aether Systems, Corporate Market Research Manager for Baker International. Mr.. Gottlieb has been responsible for initiating and managing successful market entries into Southeast Asia and the South Pacific Markets and assisting satellite related companies with diversification into new market niches and geographies. Major clients have included Intelsat, Inmarsat, Verestar, Globecomm Systems, Sonic Telecom, Frontier technology, and Thiss Technologies (Singapore). He is a native of Washington, D.C. and holds a Masters Degree in International Business from Thunderbird Graduate School and a B.A. from Stetson University. He has published numerous articles in Sat News and is a frequent speaker at Offshore Communications, ISCe, the Washington Satellite Exhibition, and other industry events. He can be reached at +1-703-622-8520. Website: www.gottliebinternationalgroup.com
