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Maritime Market Study - Satellite Communications
Frost & Sullivan, Jan 2009, Pages: 145
Research Overview
This Frost & Sullivan research service titled Maritime Market Study - Satellite Communications provides an overview of revenues and forecasts growth as well as a complete analysis of key market drivers, restraints, and trends that are impacting both maritime mobile satellite services (MSS) and very small aperture terminal (VSAT) services markets. In this research, Frost & Sullivan's analysts examine the following vessel markets: leisure, merchant, fishing, and government.
Market Overview
Emerging Applications and the Continued Demand for Bandwidth Drive Maritime Satellite Services Market
The demand for satellite services in the maritime sector is expected to escalate due to crew welfare solutions as users are beginning to expect Internet connectivity and access as the norm. As both equipment and solution prices reduce, smaller vessels are beginning to embrace satellite communication services. The new generation of Internet savvy seafarers expects connectivity wherever they are to stay in touch with family and friends. Ship owners are actively adopting satellite communication to attract and retain skilled crew in this highly competitive marketplace. Pressures to manage cost and large fleet sizes have forced ship owners to turn their gaze towards applications for weather, routing, monitoring, and security to achieve cutting edge precedence over competition.
While factors such as increasing demand for bandwidth from the next generation of crew and land based applications moving to the maritime environment are boosting the MSS market prospects, there is stiff competition from low-cost, fixed rate VSAT services. Hybrid solutions that offer ‘least cost routing’ as well as declining equipment and services prices can supplant MSS as the main choice for communications on board vessels. “While regulatory requirements will ensure MSS’s place on vessels, declining revenues are expected to force innovations in compression and other forms of integration as terrestrial wireless coverage continues to grow and provide further alternative for large data transfers,” notes the analyst of this research service. “However, the current global economy has hit the shipping industry hard, and entrenched service providers and services that are a necessity rather than options are expected to be able weather the economic storm.”
Smart Pricing Strategies Crucial in Spearheading Adoption of Satellite Services
The Pay-As-You-Use model bundled plans and pre-paid minutes have rendered air time charges for high usage MSS expensive. While the service charges are lower for VSAT, initial investment for equipment is prohibitive for most ship owners. As bigger vessels look to manage their cost and streamline their fleet management through higher bandwidth applications, MSS operators have risen to the demand by devising creative pricing schemes and rolling out products that have bridged the gap at 128Kbps and 432Kbps respectively. In this competitive market, geographic presence, integrated multi-platform solutions, and value added services are necessary to establish customer loyalty as technological innovations continue to appear to meet market demands. “Quality of service and increased capacity is critical to retaining customers,” says the analyst. “Trends indicate that the demand for bandwidth will continue on an upward trajectory and service providers must lower entry costs associated with satellite services to make it a more attractive solution for vessels to reap productivity gains by using satellite.”
Of late, VSAT service charges are beginning to meet MSS price points and overcoming the latter’s reputation as a high-end solution for large merchant vessels and the oil and gas industry. New leasing options may unfold new pricing structures that will appeal to ship owners. Emerging solutions are expected to bolster the demand for VSAT and MSS and hybrid solutions will provide the means for the two services to complement each other.
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
- Mobile communications
- Satellite communications
- Telecommunications services
- Technologies
The following technologies are covered in this research:
- Broadband services
- Satellite space hardware
- Broadband access service
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