Satellite Technology Feature Article
July 16, 2009
Report: Maritime Satellite Communication Market to Reach $27 Billion in 2013
By Calvin Azuri, TMCnet Contributor
A recent study by Frost & Sullivan predicted that revenue from the maritime satellite communications market will reach $27 million in 2013. The study titled “Maritime Market Study - Satellite Communications” also found that the market brought in more than $9.2 billion in 2008.
Since users have started to expect Internet connectivity and access as the norm, the demand for mobile satellite services, better known as “MSS,” in the maritime sector is on the rise. In addition, as both equipment and crew welfare solution prices reduce, smaller vessels will start using satellite communication services. Ship owners are also beginning to adopt satellite communication in order to attract and retain skilled crew and maintain an edge over their competition.
Even though the MSS market is getting a boost from increasing demand for bandwidth and land-based applications, the low-cost, fixed rate very small aperture terminal services are providing stiff competition. However, hybrid solutions that offer 'least cost routing' combined with declining equipment and services prices will be able to supplant MSS as the main choice for communications on board vessels.
According to Salim Abu Haniffa, a Frost & Sullivan (News - Alert) Research analyst, regulatory requirements will ensure MSS has a place on vessels. However, declining revenue will force innovations in compression and other forms of integration as terrestrial wireless coverage continues to grow and provide an alternative for large data transfers.
Haniffa also said that due to the economic downturn, entrenched service providers and services that are a necessity rather than an option will be able to weather the economic storm.
The air-time charges for high usage MSS is expensive due to its pay-as-you-go model, bundled plans, and pre-paid minutes. Even though the service charges are lower for VSAT, initial investment for equipment is prohibitive for most ship owners. As larger vessels look to manage their cost and streamline their fleet management through higher bandwidth applications, MSS operators are providing creative pricing schemes and rolling out products that have bridged the gap at 128 Kbps and 432 Kbps.
Market trends indicate that the demand for bandwidth will continue to increase. Hence service providers must lower entry costs associated with satellite services in order to make it more attractive for vessels to reap productivity gains by using satellite. The study is part of Frost & Sullivan’s Space Communications Growth Partnership Service program.
Calvin Azuri is a contributing editor for TMCnet. To read more of Calvin’s articles, please visit his columnist page.
Edited by Amy Tierney
