Who will be the winners in maritime satellite communications five years from now?

Telenor Satellite Broadcasting Q2 Newsletter | June 2015

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During this year’s Maritime Satcoms customer and partner forum, which took place during Norshipping, Telenor Satellite Broadcasting (TSBc) discussed its new HTS Ka-band services on the THOR 7 satellite. Customer testing is due to start in August and services are expected to commence commercial operation later this year. During the event, Wei Li from Euro Consult discussed who are likely to be the winners in maritime satellite communications five years from now. In this interview, Wei Li shares his insights into the opportunities facing the industry over the next five years.

1. Can you give us a quick overview of the maritime VSAT market as it is today?

The maritime VSAT market has been growing very fast over the last five years. On average we see annual revenue growth of around 10%. Today, there are more than 13,000 VSATs operating in the maritime environment, most of them in Ku-band. We see that there is sufficient momentum to maintain growth in the coming decade – in particular, the introduction of Ka-band systems such as THOR-7 and Inmarsat GX will give a big push to the sector.

2. How much capacity will be available over the oceans by 2016?

We are entering the HTS era. The global maritime market will have close to 70 Gbps capacity available for VSAT services by the end of next year. We are really at a transition phase of the industry – there was only about 15 Gbps two years ago.

3. Emerging systems are creating some waves – is this something to be very concerned about?

We have heard a lot recently about emerging projects involving constellations of small satellites. Examples include: SpaceX, which plans to launch 4,000 satellites from 2017; OneWeb, which recently contracted Airbus D&S to build 900 satellites; and many others such as Google, Facebook, etc. If all that happens, the satellite industry will be changed completely.

However, these new players face several challenges. First, they really need well-performing end-user equipment at a very low cost, which does not really exist in the market today. Second, it will not be that easy for these companies to get landing rights from all the countries they plan to include in their services.

Third, the lifetime of small satellites will be significantly shorter than traditional geostationary satellites, so it will be extremely challenging for these emerging operators to develop the market, fulfil the satellites, and then get enough revenue for replacement constellations.

4. What is the impact of making HTS capacity available over the oceans?

The abundance of capacity supplied by HTS satellites will dramatically lower the satellite capacity price per MB. Satellite operators and service providers will be able to provide a much better service performance at the same or lower prices. Maritime end users will enjoy a real broadband service and, more importantly, the enhanced connectivity will enable them to use a large range of applications either to improve their operating efficiency or to have access to much richer media to provide better offshore entertainment experiences.

5. What do you think will drive capacity usage for the maritime industry in the next five years?

We see four main applications: BYOD (bring your own device), content (entertainment videos and games, tele-education, telemedicine, etc.), big data (for vessel operation, maintenance and security), and cloud computing (mostly for operational-related activities but also including entertainment).

6. Ultimately who will be the winners?

The maritime end users will be the winners. Shipping companies, yacht owners, cruise passengers, offshore operators, and fishing crews will enjoy an offshore telecom service offshore equivalent to the one they can have onshore. And, of course, companies such as Telenor Satellite Broadcasting and its partners – which have realised the benefits of HTS satellites and are determined to provide the HTS services – will get great opportunities from this transformation.