In Valour Consultancy’s latest report, “The Future of Maritime Connectivity – 2020 edition”, Marlink Group remained the largest retail service provider for VSAT communication services. The global service provider increased its revenue market share from 23.1 per cent in 2018, to 23.9 per cent in 2019.
Marlink has a proactive approach to customer service ensuring all its clients and their vessels are functioning at an optimal performance. This has been a particularly poignant matter during the COVID-19 pandemic. Large numbers of merchant seafarers are stranded at sea away from their friends and families.
In addition, the company’s history in the maritime market and strength across all the applications at the firm has also aided its mission of staying at the top of the VSAT retail market. Valour Consultancy estimates Marlink had more than seven thousand vessels subscribed to its SeaLink VSAT service today.
The other VSAT provider contenders
Valour Consultancy ranked Speedcast second in the retail VSAT provider market in 2019. Like Marlink, the company also increased its market share from 2018 primarily due to its acquisition of Globecomm. However, the firm has gone through some financial turmoil recently, filing for Chapter 11 in April 2020. It will be interesting to see how it will perform in the next 12 months.
Inmarsat continues to play a strong dual role in the market, providing wholesale MSS and VSAT satellite capacity to its value added resellers (service providers) and also serving some key customers directly. The firm was purchased by a private equity consortium in 2019. It has done a good job of switching its large existing MSS customer base to its FX VSAT offerings whilst also getting its VARS to commit to fulfilling a number of vessels on its FX services. An example of this is demonstrated by Inmarsat’s strong relationship with Mitsui O.S.K. Lines (MOL). MOL is one of Japan’s largest shipping companies. They plan to continue the roll out of FX across the remainder of all its owned and managed vessels.
Another notable maritime connectivity player has been KVH Industries. The firm has performed exceedingly well with its Agile Plans VSAT leasing service. It reported shipping more than 10,000 VSAT antennas cumulatively earlier this year. Note this is across all mobility and land verticals. Nevertheless, its strength does reside within maritime and the firm has recently introduced its successful leasing plan to leisure market customers. This involved opening up a significant number of vessels for new business.
Unfortunately, Global Eagle has suffered a market share drop from 10% in 2018 to <8% in 2019. This is as a result of having lost a number of key passenger and offshore energy clients to other service providers in recent years.
How things stand
Valour Consultancy’s take on the retail VSAT maritime service provider standings in 2019:
According to the IMF in its June 2020 outlook update – “Global growth is projected to decline by –4.9 per cent in 2020, 1.9 percentage points below the April 2020 World Economic Outlook (WEO) forecast. The COVID-19 pandemic has had a more negative impact on activity in the first half of 2020 than anticipated, and the recovery is projected to be more gradual than previously forecast. In 2021 global growth is projected at 5.4 per cent. Overall, this would leave 2021 GDP some 6.5 percentage points lower than in the pre-COVID-19 projections of January 2020. The adverse impact on low-income households is particularly acute, imperiling the significant progress made in reducing extreme poverty in the world since the 1990s”
Valour Consultancy anticipates a glass half full perspective. Yes, passenger and offshore energy markets have been decimated by the fear of the pandemic, travel restrictions and the unknown of what is next. Nonetheless, other markets have remained less affected. We have seen increases in crew welfare video, messaging and telephone communication usage over the last six months. Some of the wealthy have also seconded themselves on their private superyachts for the period. The demand for overall food produce such as seafood has remained stable. The market is likely to remain steady over the year.
There are many notable pain points in maritime satellite connectivity right now but also a few good ones. Our maritime connectivity report will be providing an October update on 2020 and new projections for 2021 onwards.