Government comms
Issue 6 | July 2014
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steering the next wave of connected vehicles
Neville Smith, Director of Mariner Communications, examines the impact of high throughput satellites on maritime communications, and shares his views on why L-band satellite systems will continue to dominate the maritime communications landscape.
The launch of a clutch of high throughput satellite (HTS) services over the coming decade promises to provide something like communications nirvana for the maritime industry—at least if one believes what their operators claim.

The potential increases in bandwidth capability and available airtime suggest that where once the maritime industry labored to do a fraction of what we take for granted on land, it would finally achieve some kind of parity.

In some cases this may be true, but it is far from the whole picture.

A comprehensive understanding of the maritime satellite communications landscape needs to recognize not just the changing dynamics of demand and supply, but also have a clear understanding of customer behavior and needs.

Do just that and it becomes immediately clear that for the majority of ship owners and operators, legacy L-band systems will continue to command the lion’s share of voice and data traffic over the coming years.

That may seem counterintuitive given the potentially lower per megabyte costs and package deals to be had by upgrading to VSAT services. But the fact remains; shipping is only just emerging from a seven year down cycle, with some analysts suggesting that anyone imagining a return to uniform pre-2008 business conditions is likely to be disappointed.

Ask the average ship owner how much he pays per megabyte and chances are he does not know. Ask the same ship owner how much his communications bill is every month and he will be able to tell you to the nearest dollar—and it will still be too high.

Looking ahead even to the medium term and the drivers to satellite communications adoption are likely to remain focused on a service package that delivers on price, quality of signal, robustness and ease of use and installation.

Exciting as HTS is, it will be more expensive and complex to use in day-to-day operations than legacy maritime services. The demand is certainly there and one only need read the pages of the technical press to see that owners of tanker fleets and other specialized tonnage are moving ever closer to full VSAT as a prelude to HTS services when they come on stream.

Even so, questions remain. Do the majority of ship owners need a bandwidth pipe that big? Are they prepared for the higher capital expenditures on ground equipment and maintenance? Will these services work as well as L-band systems in the mobility market?

Even their service providers accept that these services are likely to be attractive to a comparatively few high-end maritime users, making their penetration a small percentage of the addressable market.

But anyone who has spent time in the maritime industry knows that the leading edge is not always representative of the majority. Shipping’s middle ground is a place of fragmented ownership and small- to medium-sized companies which exist in far lower profile niches than the big fleets and publically-listed companies.

The drivers to adoption of VSAT and higher bandwidth services also need to be examined in more detail. As has been noted by recent research, many VSAT vendors are making sales based on the unprecedented demand for crew welfare communications.

This is in part because they struggle to make the case at boardroom level for VSAT or high bandwidth services for business communications and also because the promise of a fat pipe that can keep the crew happy for a fixed monthly fee is almost too good to be true.

In some cases it is just that. Any communications package comes with limits, regardless of what the sales brochures say and what providers will build into contract clauses covering best effort, committed information rates, throttling back and normally some figure covering maximum megabyte consumption. Crew use of social media will test all those parameters.

This suggests that the sale of VSAT services for crew use is distorting the demand figure. Crew usage may be taking up the majority of VSAT airtime but chances are, just like business users, they will not get the advertised rate at all times for purely practical reasons.

Equally for the majority of business users, a smaller pipe with more reliable throughput works fine—notwithstanding peaks and troughs in demand, during which they can throttle the crew channel back themselves.

What the trend towards HTS overlooks is not just the legacy tonnage that will rely on L-band systems in the future, but why it does that. L-band signals and their associated shipboard and ground based signals are prized for their robustness, resistance to rain-fade and the fact that for the most part the crew can install, trouble shoot and even upgrade the equipment with a little help from a service provider.

True, L-band is hardly global, but ‘regionality’ is not limited to L-band providers. Many VSAT services are put together from beams operated by Fixed Satellite Service providers and coverage is rarely global, even when it is marketed as such, requiring an L-band failover for backup.

The fact is that maritime has never been a one-size-fits-all market and emerging from the worst downturn for a generation, this is truer than ever. The successful shipping company in the second, third and fourth decades of the 21st century will need to be connected, but it will also need to keep costs under control and take advantage of proven systems and services that are designed to fit its specific needs.

More often than not, conversations with owners and managers about HTS follow a similar pattern, “Interesting concept, potentially very exciting, but after you…” Banner contracts will come; the groundwork is already laid and the satellites will get launched. No one bets against bandwidth anymore, but perhaps when to lay that bet—and understanding when you might be able to collect—is a more relevant issue.
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Thank You, MSUA!