A sea change in connectivity
Every day, more than 50,000 merchant ships cross the oceans with millions of cargo containers in tow, signalling the need for fast and efficient communications aboard vessels, and between land and sea. SatellitePro ME spoke to some prominent maritime solution providers to understand key trends and challenges in the segment, and how they are being addressed.
The maritime industry is going through a major transformation on multiple levels. Overcapacity and low freight rates have led to several consolidations – particularly among dry bulk, offshore and containers – leading to a bearish outlook and compelling companies, in turn, to look at operational efficiencies and reduced costs through digitisation. In parallel, connectivity demands have skyrocketed with crew welfare, seafarers and passengers using their own devices on ships, and the insatiable appetite for operational data processing and analysis moving up the priority list for ship owners. All these factors have driven the need for always-on connectivity on the seas, thereby driving some of the biggest innovations in the sector at the moment.
“The revenue for maritime service providers is estimated to exceed $2.5bn by 2025,” says Nabil Soussia, Managing Director of IEC Telecom Middle East.
“We see the emergence of the smart ship and the autonomous ship,” he says, citing a report from Reportlinker that the autonomous ships market is expected to grow from $6.1bn in 2018 to $13.8bn by 2030, at a CAGR of 7%.
“Connectivity will be a driving factor for improved operations and efficiency, as well as to bring more attention to topics such as safety and cybersecurity,” explains Soussia.
Priya Patel, Regional Director APAC of NSSLGlobal, agrees that “smart ships are not just redefining the way maritime organisations manage their communications systems and digital infrastructure, but also revolutionising their core business models”.
“Satellite connectivity is enabling ships to become an extension of on-shore operations – effectively fully-functional mobile offices at sea. In this context, the adoption of broadband always-on connectivity for maritime applications continues its exponential upwards climb, driven by a greater understanding of the high bandwidth benefits among shipping companies, the increasing mission-criticality of IT systems and remote monitoring systems in maritime applications, and the need for remote systems to integrate with central IT networks.”
With over 90% of worldwide trade served by the maritime market, vessels at sea rely on broadband connectivity to stay in touch with operations on land to receive revised instructions, weather forecasts and navigation map updates in time for prompt decision-making.
“Satcom enhances productivity by allowing new technologies onboard. Such technologies as remote maintenance, digital medicine and e-training fully rely on disrupted connectivity,” explains Soussia.
One technology that perhaps all solution providers agree is playing a key role in the maritime sector is VSAT technology, which has evolved over the years to cater to changing market requirements. A Verified Market Research report estimates that the global maritime VSAT market will reach $5.19bn by 2025, growing at a CAGR of 13.3%, with Asia Pacific predicted to be the fastest growing market.
NSR’s ‘Maritime Satcom Markets 7th Edition’ report, published last month, also says that VSAT-enabled maritime vessels are estimated to grow in number from over 20,000 vessels in 2018 to over 75,000 by 2028, and to generate almost $42bn in cumulative revenues in that period. The maritime satcom connectivity market has never looked more promising, thanks to the “right combination of price, end user requirements and connectivity demand”, according to Brad Grady, NSR Principal Analyst and author of the report.
In fact, each market will provide unique advantages across the maritime satcom value chain, Grady says. For satellite operators, the passenger market (ocean and river cruises, ferries) will require massive amounts of connectivity, exceeding 870Gbps by 2028. For service providers, merchant vessels are adopting VSAT connectivity at unprecedented rates, adding over 40,000 vessels between 2018 and 2028. For equipment manufacturers, the fishing and leisure markets are expected to post some of the best revenue growth rates, at almost 8% with a CAGR of over 12% between 2018 and 2028.
Soussia explains why “VSAT wins over MSS in every way” for vessel owners looking to leverage investment to maximise operational efficiency and ROI.
“The biggest reason is the financial predictability of flat monthly rates offered by VSAT, as opposed to the traditional pay per use of MSS communication. Unlike MSS, VSAT services can enable modern applications onboard, bringing maritime connectivity on a par with land solutions. Satcom technologies turn vessels into fully operational remote business units,” he points out.
“VSAT set up on its own is capable of receiving and distributing bandwidth. The rest comes with a package of value-added services connected to your VSAT terminal. The most common requirements fulfilled by value-added services are optimisation, filtration, email compression services and cybersecurity.”
Marlink has also witnessed a 50% growth in VSAT uptake in the APAC market over the last 12 months, says Tore Morten Olsen, President for Maritime at Marlink.
“Ship owners are looking to secure their systems against hackers and ransomware, as well as ensure that their data is collected and stored with the GDPR requirements,” says Tore Morten Olsen, President for Maritime at Marlink.
“More APAC companies are migrating from L-band satellite communications for their fleets to VSAT services on Ka- or Ku-band. This comes from the realisation that more throughput can enable digital applications that support more efficient fleet management, while also keeping crew connected to friends and family ashore.”
He says global demand for satellite bandwidth is always increasing and “our VSAT installations generally double in number year on year”.
Patel advocates a more cautious approach, however, saying hybrid solutions may be the answer in some scenarios.