A few months ago, I was walking my dog through some local woodlands with an old schoolfriend. He had recently come up with the idea of getting his skipper license and owning a boat.
He mentioned some interest in a Westerly Centaur 26 (built in 1977). He described it as a small ~8-metre-long sailboat, berthing up to four people for the night, with a small diesel engine for windless days. Its cruising speed is four knots, with a fast and furious top speed of eight knots.
I then asked what connectivity solution the boat had. Christopher (or Captain Christopher from henceforth) looked at me blankly, then paused and told me it had a kitchen and table, and he could make cups of tea at sea. On reflection, it was a silly question to ask my friend. Nevertheless, it did get me thinking about how fragmented this market is for connectivity.
Looking at the other end of the spectrum of leisure vessels. In late 2021, it was reported Jeff Bezos had spent $500 million on building a new superyacht, Y721. The vessel is purported to be around 417 feet (139 metres) in length, a black hull, three large decks and three masts.
The custom-built vessel was reportedly designed by Oceanco, a Dutch shipbuilder and designer. The firm also built Bravo Eugenia, a superyacht belonging to the US billionaire Jerry Jones, owner of the Dallas Cowboys. Jerry, I will wipe down your glasses for a trip on Bravo Eugenia. These vessels are chalk and cheese compared to future Captain Christopher’s potential sea voyager.
When I mention the bigger superyachts, it is much easier to see what connectivity solutions are onboard; as the satellite antennas are HUGE! The Westerly’s more understated.
At the end of last year, we estimated more than 5,000 yachts worldwide were using VSAT connectivity globally. A good portion (30-35%) of this number are the big superyachts such as Jerry and Jeff’s. A slightly bigger portion is taken by chartered vessels for hire. Speaking to the maritime service providers who cover this market (E3s, Omniaccess, KVH, Anuvu, and others), you will get many interpretations of leisure vessels’ ARPU depending on the market segment they serve and location of the vessels.
Allow me to summarise this for you:
- The pandemic has certainly adversely affected some markets in commercial maritime, particularly passenger vessels. This had not been the case for the super luxury yacht market where owners have moved their lives onto their boats.
- Some of the top end superyacht users are on par with large ocean-going cruise vessels for monthly connectivity ARPU value and pay between $20,000 to sometimes $80,000 per month.
- More than 5,000 leisure vessels subscribe to VSAT airtime services presently. Approximately, 65% of these vessels are paying between $1,000 to $3,500, all depending on their locations. Think Fijian islands: VSAT full-time. Caribbean and Mediterranean: full throttle 4G.
- The total number of L-band vessel subscriptions was between 8,000 to 10,000 by the end of 2021, the bulk of these will be smaller vessels. Most of these vessels will be primarily using cellular connectivity as the primary mode of communication and paying $995 per month for a single sim deal.
- I believe the number of cellular contracts far exceeds satellite connectivity; some hybrid solutions won’t have their VSAT terminals activated.
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