who will be the winners in maritime satcom five years from now
TRANSCRIPT
Euroconsult for Thor 7 customer briefing June 3rd, 2015, Mini Bottle Gallery, Oslo
Who will be the winners in maritime satcom five years from now An Euroconsult presentation for Thor 7 customer briefing
Euroconsult presentation for Thor 7 customer briefing
Wei Li, Senior Consultant
Oslo June 3rd, 2015
Euroconsult for Thor 7 customer briefing June 3rd, 2015, Mini Bottle Gallery, Oslo
• Satellite market research & consulting
• Established in 1983
30 Years of experience
• Independently owned and operated
About Euroconsult
Euroconsult Japan
Serving clients in over 50 countries
Over 20 recurring research reports Annual executive events
for networking & deal-making
• 4 offices: France(HQ), Canada and USA, Japan
• 500+ customers in 50 countries
Euroconsult for Thor 7 customer briefing June 3rd, 2015, Mini Bottle Gallery, Oslo
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Euroconsult for Thor 7 customer briefing June 3rd, 2015, Mini Bottle Gallery, Oslo
Overview of the Maritime VSAT Market Today
70 + VSAT service providers
121,000 Addressable vessels
$2,500-$3,000 /month. Average VSAT ARPU
9% VSAT penetration
$ 250 million FSS operator revenue
11,000 VSAT terminals
5 Gbps Total maritime VSAT demand
13% CAGR Growth since 2010
0
2,000
4,000
6,000
8,000
10,000
12,000
2009 2010 2011 2012 2013
No. of terminals
C
North America 29%
Europe 31%
Asia Pacific
20%
Latin America 7%
Maritime VSAT
Middle East & Africa 13%
Ku
Euroconsult for Thor 7 customer briefing June 3rd, 2015, Mini Bottle Gallery, Oslo
5
Maritime vertical review
MERCHANT
FISHING
PASSENGER
LEISURE
OFFSHORE O&G
Drivers
68,000
46,000
6,500
6,600
1,200
• Fuel cost reduction • Operation optimization • Crew retention
• Passenger entertainment & communications
Addressable vessels Penetration ARPU
MSS >100%
source: Euroconsult research.
• Data intensive exploration and monitoring applications
• Crew retention
• Passenger entertainment & communications
• Regulation • Crew retention
MSS >100%
MSS >100%
MSS >100%
VSAT <5%
VSAT >10%
VSAT >15%
VSAT<20%
MSS >50%
VSAT <10%
MSS <$500
VSAT ~$2,500
MSS <$300
VSAT ~$10,000
MSS <$1,000
VSAT ~$20,000
MSS ~$1,000
VSAT ~$2,000
MSS <$500
VSAT ~$2,000
Euroconsult for Thor 7 customer briefing June 3rd, 2015, Mini Bottle Gallery, Oslo
• HTS systems to increase capacity over oceans to over 65Gbps by 2016
• The Northern Atlantic and the Pacific Ocean with strongest capacity increase
• Ka-band to grow from ~1Gbps in 2012 to over 40Gbps by 2016
• Ku-band to almost triple over the next 5 years
•Inmarsat (GX) and Intelsat (EPIC) leading operators, but lots of new entrants
• Different solutions for different needs: some are regional and some are global
Satellite capacity over oceans
Estimated satellite capacity for maritime VSAT, 2005-16
Gbps
Pacific
Indian OceanMediterranean
Atlantic
0
10
20
30
40
50
60
70
2005 2007 2009 2011 2013 2015Gbps
0
10
20
30
40
50
60
70
2005 2007 2009 2011 2013 2015
Ku-band
Ka-band
0
10
20
30
40
50
60
70
2005 2007 2009 2011 2013 2015
Intelsat
Inmarsat
O3b
others
Gbps
Euroconsult for Thor 7 customer briefing June 3rd, 2015, Mini Bottle Gallery, Oslo
Google Loon, high-altitude helium balloons currently in trials in North America, Latin America, and Europe
Emerging systems (1/2)
Formerly named WorldVu investors include Qualcomm and Richard Branson’s Virgin Group, 648 LEO satellites providing broadband internet worldwide, start service in 2019. 10 terabits per second. First satellites are expected to be launched in 2017. In 2015 Honeywell partnered with OneWeb to provide broadband internet services onboard aircraft.
Combination of ultralight but large drones cruising at 60,000-plus feet, a network of satellites (likely Ka-band) and a new laser communications technology.
Chinese-US venture acquisition of in-orbit L-band DMB satellite Asia with coverage over China, Southeast Asia, India, Japan and Korea. It plans to expand globally. In 2014, acquisition of a 51% share in Taiwanese DTH operator Dish-HD Asia.
$1 billion investment from Google and Fidelity Investment a 4,000 satellites constellation in LEO orbit. End-user terminals between $100 and $300 an initial constellation with global coverage except the polar region in a five year
Small Australian venture, acquired the long-unused ICO F1 satellite of Pendrell Corp. in 2012 to secure spectrum for 10-12 satellites to launch for a M2M service to debut in 2017.
Others players have plans for such systems. Thales has project for a constellation of between 800 and 4,000 LEO satellites, named MCSat. The lichtenstain is working on a project named 3ECOM-1 264 satellites using Ku- and Ka-band. Another Canadian project, named COMSTELLATION, would use 794 LEO satellites in Ka-band. ASK-1 is a Norwegian project for a 10-satellites constellation.
Euroconsult for Thor 7 customer briefing June 3rd, 2015, Mini Bottle Gallery, Oslo
Emerging systems (2/2)
Most of the emerging systems are using low-earth orbit (LEO) constellations of hundreds of small satellites with lower latency than geostationary satellite systems. Some of them have inter-satellite links which reduce the dependence on ground segment and reduce latency. Three challenges for such systems: • The development time, which has ultimately taken up to 8-10 years for all LEO
constellations including regulatory process to access spectrum, design issues with the constellation, time required to launch satellites to orbit etc.
• The need to develop a likely dedicated ground segment that is cost effective, • Constellations are global by nature: they need to obtain landing rights/access in all
countries where they want to provide capacity from their day of launch.
Large capex required at the start for satellites that usually have a short lifetime (less than 10 years) and the time needed to develop their business have so far made the economic model extremely challenging.
Euroconsult for Thor 7 customer briefing June 3rd, 2015, Mini Bottle Gallery, Oslo
• Capacity prices per Mbps will go down
• New maritime markets and end-users will become addressable for satellite broadband
• Services will allow for new, more bandwidth intense applications (e.g. high-speed internet, streaming, cloud computing, etc.)
• The growth of ARPU is however not expected to be in line with bandwidth
• End users and service providers are becoming increasingly technology agnostic with the abundance choice of networks
• When bandwidth is not anymore a limitation, the market will become application and service driven
Impacts from HTS capacity over the oceans
Supply
Demand
Euroconsult for Thor 7 customer briefing June 3rd, 2015, Mini Bottle Gallery, Oslo 10
• Engine manufacturers and other vendors are building their systems with sensors in vessels and run algorithms to interpret that data, for maintenance, remote diagnostic, customer support and product improvement purpose
• In most cases shipping company’s IT will take care of the data transmissions
• In average, one IT engineer takes care of 15-20 ships
• Yards, vendors, owners, ship managers, regulators, need to agree what data should be there, and what format it should be in
• There are many standards and the data all needs to have the same protocol to be transferred over a single centralized system
• Autonomous vessel will be the next step as result from big Data
Big Data
Euroconsult for Thor 7 customer briefing June 3rd, 2015, Mini Bottle Gallery, Oslo 11
• Trend of more and more automation onboard the vessel with an increasing amount of data to be tracked
• Regulation and safety applications (LRIT, AIS, etc.)
• Condition based/performance monitoring (engine, etc.)
• Cargo monitoring (containers, etc.)
• Requirements for M2M applications onboard vessels growing and diversifying
• Need for interoperability of multiple technologies and systems (GSM, RFID, satellite, etc.)
M2M – the internet of things
Euroconsult for Thor 7 customer briefing June 3rd, 2015, Mini Bottle Gallery, Oslo 12
• ‘Cloud computing’ can help shipping companies to reduce IT investment, and improve efficiency.
• However it has yet struggled to gain acceptance within the conservative maritime industry
• Ship owners generally have strong concern about data security over cloud infrastructure
• Some major companies have started to move in this direction
• The majority of the cloud projects are still with company-wide or ship-wide cloud infrastructures.
• Ship-wide cloud is by far mostly used for entertainment for crew or passengers (e.g. VAVE system from MCP for Corsica Ferries)
• Internet-wide cloud infrastructures have been recently started to adopt by a few shipping companies for business purpose (e.g. Orange Business Services for Columbia Ship Management).
Cloud applications
Euroconsult for Thor 7 customer briefing June 3rd, 2015, Mini Bottle Gallery, Oslo 13
• For long the telecommunications in ships are only available in the bridge via wired and fix devices
• Crew call room and Internet café are adopted by a shipping companies
• The crew and passenger communications have been significantly increasing along with the trends in terrestrial telecom
• The majority of new communication needs are data
• BYOD is becoming popular and communication become wireless onboard
• Wireless communications basically include Wi-Fi and cellular. Wi-Fi is easier to realize and cellular is of more complexity and require roaming agreements.
Bring-your-own-device (BYOD)
Euroconsult for Thor 7 customer briefing June 3rd, 2015, Mini Bottle Gallery, Oslo 14
• Increasing use of video applications with high data rate requirements
• Real time video streaming from the vessel for remote monitoring and diagnostics
• E-learning and crew training
• Update of weather charts, maps, shipping documents, manuals
• Video conferencing
• Quality and resolution of videos and images improving
• Trend towards HD with video streams that can require 2-8Mbps
• More efficiency systems and better compression needed
Video – “Pictures worth a thousand words”
Euroconsult for Thor 7 customer briefing June 3rd, 2015, Mini Bottle Gallery, Oslo 15
• The market, especially high end market is approaching the saturation in terms of satcom penetration
• SP are looking for new opportunities to increase ARPU
• Content is considered to be the most important and easy to do add on to get incremental revenue from existing customers
• KVH and Inmarsat are the pioneers among service provider to provide contents to ships
• By far most contents are entertainment and news related
• Tele-education and business related contents are in development and are expected to be online in the coming months
Content is king
Euroconsult for Thor 7 customer briefing June 3rd, 2015, Mini Bottle Gallery, Oslo
2009 ~$470m
16
Maritime satcom service provider revenue
2019 ~$1,095m.
2014 ~$635m
2009 ~$385m
Estimated VSAT service revenues (excluding maritime government and offshore rigs)
Estimated MSS service revenues
2014 ~$610m
2019 ~$745m
Estimated total satcom service revenues for the maritime market (excluding maritime government and offshore rigs for VSAT)
2019 ~$1,840m
2014 ~$1,245m
2009 ~$855m
Source: Euroconsult research
Note: revenue estimate for service providers includes the access services, revenues from the reselling/leasing of equipment and from potential value added services
CAGR09-14: +5,4% CAGR14-19: +4,1% CAGR09-14: +10,5%
CAGR14-19: +11,5%
CAGR09-14: +7,8% CAGR14-19: +8,1%
Key growth drivers: • Increasing data usage • New vessel installations • Migration to new generation broadband
systems
Euroconsult for Thor 7 customer briefing June 3rd, 2015, Mini Bottle Gallery, Oslo
CONTACTS
Wei LI [email protected]
www.euroconsult-ec.com
17
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