Maritime satellite communications have changed dramatically in the past decade. Not so long ago, basic voice and low-data-rate safety applications were about the only offerings available to ship operators. Today, the maritime market is fully plugged into the global IP network, and ship operators and their crews have access to voice and video communications; real-time updates on weather, routes and trade prices; full Internet access; instant messaging; and asset tracking and surveillance. This greater demand for communications resources has created an attractive opening for mobile satellite service (MSS) high-data-rate systems such as’s FleetBroadband and ’s OpenPort. End users have found them to be an alternative to legacy low-data-rate MSS solutions and the large and expensive VSAT systems.
But that could soon change, with the global emergence of Ka-band service as an alternative for maritime users. By 2014, Inmarsat will have a global constellation of three Ka-band satellites in orbit, providing 50 Mbps throughput for maritime communications with a service called Global Xpress. And other companies are looking at the potential of Ka-band service to this market. The emergence of Ka-band capacity represents a leapfrog move that blurs the border between MSS technology and fixed-satellite service (FSS) technology. By providing Ka-band VSAT service, a satellite operator can better combat the increasing competitive pressure from broadband VSAT and the 60-cm-antenna Mini-VSAT services. In addition, with the high-end Ka-band service, established operators would have greater flexibility to more aggressively market other capacity.
While MSS broadband still dominates the maritime market, VSAT is the fastest growing segment of the business and has been taking market share from MSS operators. Despite high equipment costs, VSAT is competitive thanks to the predictable nature of flat-rate pricing for bandwidth. Monthly fixed pricing of VSAT solutions ranges from $950 to $8,000 (mainly depending on data rate and quality of service) for unlimited usage, while MSS solutions are priced on a per-minute or per-megabyte basis.
The recession has been devastating for the commercial shipping industry, which makes up about 90% of the maritime market. But despite the decline in new ship construction and shipping traffic generally, bandwidth usage has increased dramatically. For example, the Norway-based VSAT service provider Ship Equip reported that its customers’ monthly data transmissions increased from 9.1 gigabytes per ship in April 2009 to 19.7 gigabytes per ship in April 2010. London-based MSS operator Inmarsat also reported that its maritime revenue increased 7.4%, with data transmission increasing 10.8% in 2009. Also in 2009, operating terminals in the global maritime satellite communications market grew by almost 11%, reaching nearly 300,000 active terminals.
Despite flat and negative indicators in the merchant shipping segment, growth in maritime satellite communications for merchant shipping is not expected to slow. By 2020, Euroconsult predicts that the global merchant shipping sector will be using 410,000 satellite communications terminals and generate more than $850 million in revenue at the tier-1 service provider level.
More broadly speaking, other segments of the maritime community are not yet well addressed by the satellite communications industry, and opportunities are still ahead in underdeveloped vertical segments and emerging geographic markets, such as Asia and Latin America. In the coming years Euroconsult expects the satellite maritime communication market to growth at a high single digit rate in both terminals and revenue.
Wei Li is senior consultant at Euroconsult and is editor of the company’s “Maritime Telecom Solutions by Satellite – Global Market Analysis & Forecasts.” Euroconsult is a consulting and analyst firm specializing in satellite applications, communications, and digital broadcasting, providing strategic consulting and analysis, comprehensive research reports and forecasts. Mr. Li can be reached at email@example.com.