Asia: A Market poised for Maritime Communications

The maritime communications market in Asia is on the cusp of a surge in growth. In terms of communications, the expectations of crew and shipping owners alike have evolved and the satellite sector is enabling their expectations to be met.

A recent Frost and Sullivan report on satellite mobile satellite services in the maritime sector has forecast an escalation in demand. The Maritime Market Study- Satellite Communications predicts that market earned revenues of over $9.20 billion in 2008 will swell to $27.36 billion in 2013. Communications within the maritime environment have changed to a great extent. Vessels, whether they are cruise liners, container ships or small fishing boats, are now looking for more in terms of communications and IT. No longer are vessels seen as a detached part of a business. Shipping managers now wish to be in constant touch with their fleets. They wish to monitor their location and to manage them much more effectively. It is not simply a case of enhancing their fleets’ effectiveness, ship owners are actively adopting satellite communications to attract and retain skilled crew members in a highly competitive marketplace. Fleet owners are under pressure to manage cost, especially in the current economic situation, and this has forced them to consider applications that they may not have done so before such as weather monitoring, routing, fuel usage, and security to gain an advantage over the competition.

As ever, these new applications create a demand for more bandwidth. Competition has been introduced in the sector by low-cost, fixed rate VSAT services.

"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," says Frost & Sullivan Research Analyst Salim Abu Haniffa. "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 to weather the economic storm."

Satellite communications at sea have traditionally been viewed as an expensive solution and the pay-as-you-go, bundled plans and pre-paid minutes have made high usage MSS expensive. However, this is changing. The actual service charges for VSAT broadband are considerably lower, however, there is an initial outlay to make. The equipment required is still expensive but is coming down in price and the fleet managers are coming to realise that the investment is well worth is as through the applications broadband can offer, they can streamline their fleet and make it more efficient. The Frost and Sullivan report acknowledges that MSS operators have developed competitive and creative pricing schemes and rolling out products that have bridged the gap at 128kbps and 432kbps.

The maritime communications market is very competitive and there are many satellite communication companies that want to see a piece of the action and are anxious to provide the fleet managers with the solutions that they require. In order for these companies to retain customer loyalty they must continue to offer Quality of Service.

As a result of the financial crisis, some regions of the world such as Europe are finding the maritime business slow. Many vessels are in dry dock, their owners unable to afford to put them to sea. This pressure has meant that many maritime satellite service providers are turning to the East to find precious business. The price competitive nature of the Asian market has resulted in service providers offering deals to ship owners that cannot be refused. Now that coverage is much less of an issue with the recent launch of Telstar 11N, and the majority of shipping companies are yet to experience what VSAT broadband can offer, the time seems right for companies to head to Asia. It will be a region to watch.

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