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Satellite operators and satellite providers in the fight for the “faithful” customer

NSR (Nothern Sky Research) – a global leader in satellite services market research – wonders if the “faithful” satellite client for the maritime industry is good enough.

Fact: Satellite operators are looking for any profitability opportunities within value chains.

One of the ways to increase the profitability of satellite services is to create a customer base with a high percentage of so-called “faithful” customers, which significantly reduces the operator’s costs for their constant switching. In markets such as DTH (Direct To the Home, home satellite TV), entire geographic areas of “loyal” customers can be held by a single video signal and the high cost of rebuilding household antennas. In the mobile services sector, the capacity of such an “ecosystem” is formed by a satellite operator so that users move within its own satellite fleet. A classic example of creating an “ecosystem” for a marine mobile network is Inmarsat L-band, where a satellite operator provides signal transmission, and service providers focus on its promotion and on relations with end users.

Broadband Maritime Retail Revenues from 2015-2025
According to Maritim Satcom Markets, 4th Edition (market analysis from NSR), the marine broadband market will reach approximately $ 3.3 billion by 2025. Of these, $ 2.2 billion will be the geostationary capacity of the FSS & HTS * C / Ku / Ka bands (where we are now we can observe most of the “ecosystems”). At the same time, revenues will begin to flow from FSS- to HTS-capacity, contributing to the development of “capacious ecosystems”. However, the question is who will create the factors that contribute to strengthening customer “fidelity” to the holder of a particular capacity.

Fixed-satellite service (FSS) – fixed-capacity satellites
An example of attempts to strengthen customer “fidelity” is the recently announced strategic partnership of Marlink and SpeedCast with Inmarsat to connect 4,000 vessels to the Global Xpress network over the next 5 years. Although the details remain unclear (will it be FleetBroadband customers? Or customers of ships equipped with VSAT? Or maybe completely new ships?), The goal is to reproduce the L-band “ecosystem” in the VSAT world. In addition, will these customers be Marlink and SpeedCast customers in the same sense as in the VSAT world, where end users are connected to a service provider (rather than a satellite operator), or are they just end users of Fleet Xpress?

Myth: Ecosystem capacities are limited by satellite operators.

If you do not take into account the unique position of Inmarsat prevailing in the maritime industry, can C / Ku / Ka-band capacities form similar “ecosystems”? The answer is yes, moreover, both for satellite operators and service providers. For example, the Intelsat “ecosystem” (a space constellation of 55 telecommunications satellites), known as the “Intelsat One Flex” (GEO FSS and HTS C / Ku / Ka bands); and SES (a satellite operator with a constellation of 50 satellites) has “SES +” (with GEO and Non-GEO capacity). Other satellite operators are certainly developing their plans to create similar offers.

Why Consolidate: Maximize Network Utilization?
The consolidation of related aviation and maritime trade markets leads to the emergence of a major “service provider provider”. Although there has always been a semi-official tendency to resell capacity to a third party within the maritime industry (for example, MTN or Marlink sold capacity to service providers of niche market segments), the pool of markets is growing rapidly. Since 2009, KVH and ViaSat have built a partnership to provide global Ku-band coverage for the maritime industry using ViaSat tanks. Today, service providers such as Panasonic Avionics and Global Eagle Entertainment may be at the forefront of creating “ecosystems” by combining their capacities from various satellite operators (they themselves will do this, not satellite operators). In addition to the “ecosystems” created by the satellite operators themselves, there is another clear trend: the business of creating “bits from hertz” (that’s what you can call satellite service providers) will come under significant pressure for those providers who either do not have sufficient coverage, or – “Loyal” customers.

Without making sufficient efforts to combine capacities from various satellite operators or create unique networks, relying on end-user databases, will service providers (service providers) be able to extract high enough added value to support a specific number of market players or will this result from the consolidation of providers in their own market segment?

The “ecosystems” of satellite operators may become one of the key events in the maritime transportation market, since even with increasing complexity of networks, HTS coverage remains geographically limited.

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