NSR report: Maritime satcom buoyed by broadband demand despite COVID-19 impact


NSR’s Maritime SATCOM Markets, 8th Edition report finds mixed impact to Maritime Satcom Markets in the near-term, a challenging middle period, yet optimism for longer-term sector health. On the footsteps of a strong 2019, with 24,000 VSAT-enabled vessels and over $2.8B in retail revenues, 2020 had initial signs of another strong year. However, widespread economic shutdowns due to COVID-19, unprecedented pause to the Cruise sector, and collapsing oil prices have caused significant near-term disruption. While ships continue to require crew, transport goods, and perform essential services, these bright spots cannot mask the near-term systemic risks. “The Maritime sector is perhaps the ‘2nd worst’ impacted mobility market due to COVID-19,” states Principal Analyst and Report Author Brad Grady. “Unlike the Airline industry, which has largely parked their aircraft awaiting a ‘return to normal’, everything from Cruise Ships to Merchant Vessels remain “online” with crew or other shipboard-functions - even if their operational duties have slowed or vanished. The immediate effect is that 2020 bandwidth demand will see a 7% increase over 2019 figures, even while In-Service Units and Retail Revenues decrease. As Service Providers launch or re-launch Crew Welfare-focused applications, Cruise Ships are re-tasked repatriating crew members, and all Maritime end-users look at ways to safely operate in what is likely to become a ‘new normal’; the demand for connectivity will continue to increase on a per-vessel basis. What’s in question – How many vessels will be active over the next ten years?” Amongst the five core maritime segments (Merchant, Passenger, Offshore, Fishing, Leisure), Offshore faces the longest road to revenue recovery – not matching 2019 Retail Revenues until 2027 as crude pricing challenges are met with a sharp decrease in petroleum demand. Fishing markets have one of the highest one-year drop in revenues, yet regulatory demands, falling service prices, and cheaper terminals will also make it one of the fastest growing Maritime markets. The Leisure segment is seeing a significant and sustained boost in requirements as owners enjoy social distancing on their yachts. The Passenger segment faces the highest uncertainty, and particularly the Ocean Cruise market. Smaller vessels and “normal” occupancy or large vessels with low occupancy? More sailings or Fewer sailings? Regardless, demand for satellite services will continue to increase. Overall, even among these rapid transformations, one theme is clear – vessels are adopting VSAT connectivity and higher bandwidth provisioning rates. Retail revenues yield a cumulative $34.5B with Broadband Connectivity accounting for over 80%, capacity demand grows 24%, and the addressable market will expand to over 500,000 vessels by 2029 – all signs that the long-term fundamentals remain strong.

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