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Evolution of Maritime Smart Shipping Strategies

Over the last few months, the topic of smart shipping and the various purposes of maritime IoT has been receiving increased media attention. A key point to remember is these terms mean different things to different people within the shipping ecosystem.

I will attempt to shed some light upon these….The uses of smart shipping technology for a ship owner, to a charterer, a ship manager, or an operator will vary significantly. One is primarily maintaining the asset’s value and utilisation as best as possible, another may to simply enable the vessel to reach its destination as quick and cost effectively, or another to maintain optimal performance of vessel operations.

Companies providing solutions will vary in their approach to each segment and how they convey their solutions. Software control of major marine equipment has been with us for over 30 years and with the capacity of microchips and memory increasing so has the sophistication and proliferation of that control so much so that, beyond the galley kitchen, it is rare to find some aspect or equipment of modern ships that is not monitored and/or controlled by a microprocessor. Connecting these to a shore-based intelligence (artificial or otherwise) is a sensible step.

Within maritime digital application vendors, the race is wide open, and how companies target potential customer group differs. One notable observation, from myself, is that everyone seems to be focused on the merchant market and the time to build up a critical mass of dominance in this area will lengthy.

Solutions within the maritime connectivity service provider market are also building and we are seeing some clear frontrunners, particularly Inmarsat and KVH Industries.

However, what some people may not realise is the strength, and clever strategies deployed by marine OEMs. In this piece, I wanted to give a clear overview of the key players in this part of the ecosystem.

In the case of marine OEMs, these firms have quickly envisage the potential for connected vessels with new operations of innovation or cost savings, and adjusted their businesses accordingly.

This has been a case from moving CAPEX business models for machinery to SaaS model for value added services or service included within the purchase of equipment.

This means the owners of the connectivity solution onboard the vessel need to allocate or allow some capacity for equipment machineries.

Recently, I interviewed Wärtsilä in regards to Fleet Operations Solution for voyage planning and fleet performance management.

The firm offers an entry point to an element of its smart shipping service with Navi-Planner which incorporates a modular approach; the first being “tracking and awareness”. In some cases, no upfront payments are required for installing a module onboard. Obviously to fully utilise the Warstila’s smart shipping solutions, radar and bridge sensors are necessary.

The primary object of the tool is allow an operator or charterer to understand their fleets in real-time, see planned routes, contingent deviations and forecast vessel/fleet schedules. Connectivity is key and VSAT, and even MSS connectivity needs sufficient bandwidth for use. Interestingly, Wärtsilä is offering customers the connectivity capabilities (like a service provider) as part of its fleet operation solutions, however, how many vessels they’ve equipped as a service provider is unknown. My guess is less than 500 but more than 100. (However, I should add this is only a portion of Wärtsilä’s smart shipping portfolio, and customers brought from the Eniram acquisition, vessel traffic services and others means Wärtsilä has a hefty number of vessel subscriptions.).

Monthly fees for Navi-Planner increase with additional modules of compliance reporting, voyage and ports and also hull-monitoring and engine supervision are included. The compliance and reporting module is particularly useful for charterers, hull and engine module for ship owners to extoll the productivity of their asset and voyage and ports solution for any companies looking to augment their logistics capabilities.

While Wärtsilä has been pushing focused services of a vessel’s functionality, ABB, with its ABB Ability™ offering has been gathering pace. In another interview with Antto Shemeikka, Vice President Digital Services, ABB Marine & Ports, the company has seen an increased interest in its digital maritime technology over the last 18 months.

Moreover, ABB also launched its ABB Ability™ Genix Industrial Analytics and AI Suite to aid in decision making. The firm believes with the greater use of vessel operational data, combined with its AI and analytics feature, included in ABB Ability™ Genix, a reduction of fuel consumption by up to ten per cent is possible. Furthermore, the technology has other benefits such as maintenance savings which utilises condition-based monitoring and early identification of potential malfunctions. All these factors can improve vessel uptime and reduce essential service visits to vessels by as much as 30 per cent.

ABB has refrained from getting too involved in whether the vessel has connectivity, and providing this if not. It is unclear why the company has chosen not to get too involved in this area as connectivity is vital for its solutions Valour’s take is in the case of Wärtsilä, that decision was probably thrust upon them. Wärtsilä has a significant market in after-sales. Its primary products are great big heavy marine diesel engines which need regular overhauls. Most ships won’t have the crew numbers for this activity so will call in a Wärtsilä team or one of the licensed providers to strip the engines. Many of these ships are older models and, in order to increase that side of their business, they will have offered extended warranty provided the ship engines can report into a Wärtsilä base, so it was in their commercial interest to hook up with a connectivity supplier. ABB ‘s marine business is primarily electronic solutions and digital offerings, which traditionally have a smaller after-sales market than other vessel systems. For example, distribution and control systems are rarely overhauled.

ABB has recently developed  a new module within its ABB Ability™ Marine Advisory – OCTOPUS for the EU-funded ATLANTIS project that provides actionable insights to help onshore operators optimise the planning of missions from port to wind farm, cut transfer times between land and wind farms, and reduce vessel waiting time and working times on-site.

The potential for this new module goes beyond a original sector. ABB’s vision is to develop the module to serve multiple sectors, such as the cruise industry, where it could be used to plan short routes, and the offshore oil and gas industry to map supply operations for rigs and floating offshore units.

ABB estimates that the system is currently utilised by around 90 per cent of the semi-submersible heavy lift ships in operation worldwide.

By the end of 2021, Valour Consultancy anticipates more than 60,000 smart shipping subscriptions will be sold by marine OEMs, representing a hefty chunk of changes, nearly $235 million globally. More increasingly, we foresee monthly subscription rates increasing over the next two to three years.

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A key point to remember is these terms mean different things to different people within the shipping ecosystem. I will attempt to shed some light upon these….The uses of smart shipping technology for a ship owner, to a charterer, a ship manager, or an operator will vary significantly. One is primarily maintaining the asset’s value and utilisation as best as possible, another may to simply enable the vessel to reach its destination as quick and cost effectively, or another to maintain optimal performance of vessel operations. Companies providing solutions will vary in their approach to each segment and how they convey their solutions. Software control of major marine equipment has been with us for over 30 years and with the capacity of microchips and memory increasing so has the sophistication and proliferation of that control so much so that, beyond the galley kitchen, it is rare to find some aspect or equipment of modern ships that is not monitored and/or controlled by a microprocessor. Connecting these to a shore-based intelligence (artificial or otherwise) is a sensible step. Within maritime digital application vendors, the race is wide open, and how companies target potential customer group differs. One notable observation, from myself, is that everyone seems to be focused on the merchant market and the time to build up a critical mass of dominance in this area will lengthy. Solutions within the maritime connectivity service provider market are also building and we are seeing some clear frontrunners, particularly Inmarsat and KVH Industries. However, what some people may not realise is the strength, and clever strategies deployed by marine OEMs. In this piece, I wanted to give a clear overview of the key players in this part of the ecosystem. In the case of marine OEMs, these firms have quickly envisage the potential for connected vessels with new operations of innovation or cost savings, and adjusted their businesses accordingly. This has been a case from moving CAPEX business models for machinery to SaaS model for value added services or service included within the purchase of equipment. This means the owners of the connectivity solution onboard the vessel need to allocate or allow some capacity for equipment machineries. Recently, I interviewed Wärtsilä in regards to Fleet Operations Solution for voyage planning and fleet performance management. The firm offers an entry point to an element of its smart shipping service with Navi-Planner which incorporates a modular approach; the first being “tracking and awareness”. In some cases, no upfront payments are required for installing a module onboard. Obviously to fully utilise the Warstila’s smart shipping solutions, radar and bridge sensors are necessary. The primary object of the tool is allow an operator or charterer to understand their fleets in real-time, see planned routes, contingent deviations and forecast vessel/fleet schedules. Connectivity is key and VSAT, and even MSS connectivity needs sufficient bandwidth for use. Interestingly, Wärtsilä is offering customers the connectivity capabilities (like a service provider) as part of its fleet operation solutions, however, how many vessels they’ve equipped as a service provider is unknown. My guess is less than 500 but more than 100. (However, I should add this is only a portion of Wärtsilä’s smart shipping portfolio, and customers brought from the Eniram acquisition, vessel traffic services and others means Wärtsilä has a hefty number of vessel subscriptions.). Monthly fees for Navi-Planner increase with additional modules of compliance reporting, voyage and ports and also hull-monitoring and engine supervision are included. The compliance and reporting module is particularly useful for charterers, hull and engine module for ship owners to extoll the productivity of their asset and voyage and ports solution for any companies looking to augment their logistics capabilities. While Wärtsilä has been pushing focused services of a vessel’s functionality, ABB, with its ABB Ability™ offering has been gathering pace. In another interview with Antto Shemeikka, Vice President Digital Services, ABB Marine & Ports, the company has seen an increased interest in its digital maritime technology over the last 18 months. Moreover, ABB also launched its ABB Ability™ Genix Industrial Analytics and AI Suite to aid in decision making. The firm believes with the greater use of vessel operational data, combined with its AI and analytics feature, included in ABB Ability™ Genix, a reduction of fuel consumption by up to ten per cent is possible. Furthermore, the technology has other benefits such as maintenance savings which utilises condition-based monitoring and early identification of potential malfunctions. All these factors can improve vessel uptime and reduce essential service visits to vessels by as much as 30 per cent. ABB has refrained from getting too involved in whether the vessel has connectivity, and providing this if not. It is unclear why the company has chosen not to get too involved in this area as connectivity is vital for its solutions Valour’s take is in the case of Wärtsilä, that decision was probably thrust upon them. Wärtsilä has a significant market in after-sales. Its primary products are great big heavy marine diesel engines which need regular overhauls. Most ships won’t have the crew numbers for this activity so will call in a Wärtsilä team or one of the licensed providers to strip the engines. Many of these ships are older models and, in order to increase that side of their business, they will have offered extended warranty provided the ship engines can report into a Wärtsilä base, so it was in their commercial interest to hook up with a connectivity supplier. ABB ‘s marine business is primarily electronic solutions and digital offerings, which traditionally have a smaller after-sales market than other vessel systems. For example, distribution and control systems are rarely overhauled. ABB has recently developed  a new module within its ABB Ability™ Marine Advisory - OCTOPUS for the EU-funded ATLANTIS project that provides actionable insights to help onshore operators optimise the planning of missions from port to wind farm, cut transfer times between land and wind farms, and reduce vessel waiting time and working times on-site. The potential for this new module goes beyond a original sector. ABB’s vision is to develop the module to serve multiple sectors, such as the cruise industry, where it could be used to plan short routes, and the offshore oil and gas industry to map supply operations for rigs and floating offshore units. ABB estimates that the system is currently utilised by around 90 per cent of the semi-submersible heavy lift ships in operation worldwide. By the end of 2021, Valour Consultancy anticipates more than 60,000 smart shipping subscriptions will be sold by marine OEMs, representing a hefty chunk of changes, nearly $235 million globally. More increasingly, we foresee monthly subscription rates increasing over the next two to three years. [/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

Smart Shipping Has Arrived

One thing is certain within the maritime industry, smart shipping has arrived. However, what most people will think is “What is Smart Shipping?”

After speaking to range of different players in the ecosystem; I will endeavor to try and provide some understanding of this.

Smart shipping, ship digitalisation, maritime IoT, maritime digital applications; all these terms essentially refer advancements in ship operations, maintenance, performance optimisation via the use of technology and broadband communications.

Over the course of developing our latest report on smart shipping – The Future of Smart Shipping and Maritime Digital Applications, we discovered a plethora of opinions and interpretations about the aforementioned terms from a variety of players in the ecosystem.

Valour Consultancy defines a smart vessel as any vessel with applications to cover remote machinery diagnostics, CCTV/video connection services, predictive maintenance and cloud-based storage. To achieve this, the vessel must have broadband connectivity capabilities such as VSAT or cellular, and a vessel management system.

However, proclaiming how many smart ships are operating around the world is challenging as this category is catered for by a multitude of players for each of the above components.

Furthermore, for example, Samsung Heavy Industries (a ship builder) constructs a merchant vessel and deploys its SSI solution, sells the vessel to CMA CMG, who purchase several pieces of equipment from ABB and Wartsila, then also add some additional IoT services from Marlink, its connectivity service provider, and also subscribing to a data analytics company, such as NAPA.

Each of the parties will claim a sale, or subscription service for this one smart vessel. As such, calculating the total number of smart ships is rather challenging because if we were to sum each smart ship subscription or service, it would amount to a very high number indeed misrepresenting magnitude of the market.

Key Suspects

Presently, the maritime equipment manufacturers hold the majority of smart shipping services, with companies such as Kongsberg, Wärtsilä, and ABB being quick to extend their digital offerings to existing business operations. For example, as widely publicised, Kongsberg has been heavily involved in the Yara Birkeland, an autonomous container vessel currently being completed and commissioned in Norway. Although the subject of this piece is smart shipping, this element is a key step in the evolution, ultimately, to autonomous vessels.

Kongsberg’s intelligent digital platform, Kognifai, enables 3rd party data analytics companies to bring their solutions to a much larger shipping fleet. In addition, one of the company’s key smart shipping and IoT solutions is “Vessel Insight Benchmark”. The new application aims to provide ship metrics and data insights to improve a vessel or a fleet of vessel’s performance and was launched in the middle of 2020. The maritime digital application looks to provide a data-driven insight into the vessel operating profile compared to vessels of similar size and type. The service is based on common definitions and high quality data that provides an instant historic perspective. It is understood 37 per cent of the firm’s maritime revenues are recurring basis. The firm had more 30,000 vessels with vessel insight installed.

The Finnish company, Wärtsilä, defining its products and services within the smart shipping realm in itself would be a 50,000 word thesis focusing upon operational efficiencies and cost savings. However, a short summary includes the firm serves Anglo-Eastern’s fleet, more than 600 vessels, with its Fleet Optimisation Solution, a digitalisation suite that enhances efficiency and performance via route optimisation, speed management, weather routing, ship-to-shore reporting, and fleet performance management to reduce fuel consumption. Other services offered include a new online platform that allows companies to manage their installations more efficiently, and the remote accessibility of experts. This tool leverages artificial intelligence and advanced diagnostics to remotely monitor equipment and systems in real time. The firm has quickly transformed its business model to a SaaS rather than traditional CAPEX business model. Consequently, managing the lifecycle of an asset has become paramount and performance gains are achieved via upgrades, fuel conversions, and using data analytics and artificial intelligence to support its customer business decisions. Even by the end of 2019, the business of equipment sales to service revenues were equally split.

ABB launched ABB Ability in 2017, digital portfolio that offers hundreds of digital solutions to increase productivity and safety cost effectively. The solution is part of an integrated global network of round-the-clock operations centers that can take care of the full scope of ABB systems on board vessels from afar. Remote diagnostics of shipboard equipment has become a key feature of shipping over the last decade. Sensor-driven onboard monitoring software that fully integrates with analytics ashore plays a central role in facilitating this approach and ABB believes that there are clear maintenance savings available to owners that commit to its package as digitally connected on-duty engineers can solve cases remotely 24/7.

Traditional connectivity providers such as Inmarsat, KVH Industries and others are also embracing the smart shipping revolution. For example, Inmarsat now provides dedicated IoT and operational service called Fleet Data. The service or digital ecosystem enables 3rd party data analytic vendors or other solutions to “plug-in” their applications for Inmarsat’s FX vessels. This could be simply to aggregate data functions allowing the user of the service to easily view, monitor, analyse and compare performances of vessel operations. Inmarsat has made Fleet Data available to all its FX and FB vessels – more than 40,000 vessels. The service is offered on a yearly subscription basis and it is estimated that the basic package starts from $1,000 per year, however, costs obviously vary upon the application’s data usage from a bandwidth and capacity standpoint.

KVH provides a similar stand-alone IoT service which it launched in June 2019. The solution has three modes: Watch Flow, for 24/7, machine-to-machine (M2M) data delivery compatible with all IoT applications; Flow Intervention for a boosted data capacity and speeds for bulk file transfers, application updates, and general access to the onboard endpoint. Remote Expert Intervention is an on-demand high-speed session for remote face-to-face support and remote equipment access. The company hopes KVH Watch service enable hardware manufacturers, data analytic companies and other IoT service firms to have their own dedicated VSAT terminal.

The Watch Flow plan starts from as little as $99 per month and customers do not need to purchase an AgilePlans subscription for the IoT service. The price of the plan is primarily dependent on the number of sensors and data requirements of the user.

As stated above, many companies are addressing elements of the smart shipping market in different ways. This patchwork of solutions is a start but still in the primary stages of development.

The availability and price of ship satellite connectivity is much better than, say, 5 years ago, and, providing simple solutions to streamline processes onboard a vessel is easy to translate into operational and financial gains.

It is expected that a swarm of bigger companies will develop holistic system solutions that will provide a complete oversight and co-ordination for all the software inputs feeding it. These may be companies outside of the maritime sphere.

Market Dynamics

Satellite connectivity is becoming ever more cost effective. It’s highly commoditized and we will see a raft of mergers and acquisitions in the next 18 months within the maritime connectivity sphere.

One natural strategy for service providers and operators will be to include and upsell more value added services. Cybersecurity protection and IoT solutions will become focal services in the next two years. Services providers will likely generate more than 40 per cent of their revenues from these new services rather than the connectivity airtime within this period.

We will also see it as much more common practice for hardware companies, such as Wartsila or Kongsberg to own their communication terminals onboard customer vessels. Control and accessibility of their resources will be more critical than ever. KVH Industries will likely see some strong upsides from this trend.

Valour Consultancy’s key takeaways

1.      The initial stages of the smart shipping evolution are now fully developed.

2.      A concise and clear definition of a smart vessel is possible, how many smart ships sailing the oceans is still unclear. However, there are many smart shipping solutions being used.

3.      Following the last point, the number of maritime digital applications has exploded and hundreds of vendors are pushing their services.

4.      Large number of acquisitions will be undertaken by the leading companies of hardware manufacturers and service providers.

5.      Service providers will become kingmakers in this field by 2026 onwards, we believe they will quickly purchase the leading 3rd party maritime analytic companies.

6.      The end game is autonomous vessels.

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However, what most people will think is “What is Smart Shipping?” After speaking to range of different players in the ecosystem; I will endeavor to try and provide some understanding of this. Smart shipping, ship digitalisation, maritime IoT, maritime digital applications; all these terms essentially refer advancements in ship operations, maintenance, performance optimisation via the use of technology and broadband communications. Over the course of developing our latest report on smart shipping – The Future of Smart Shipping and Maritime Digital Applications, we discovered a plethora of opinions and interpretations about the aforementioned terms from a variety of players in the ecosystem. Valour Consultancy defines a smart vessel as any vessel with applications to cover remote machinery diagnostics, CCTV/video connection services, predictive maintenance and cloud-based storage. To achieve this, the vessel must have broadband connectivity capabilities such as VSAT or cellular, and a vessel management system. However, proclaiming how many smart ships are operating around the world is challenging as this category is catered for by a multitude of players for each of the above components. Furthermore, for example, Samsung Heavy Industries (a ship builder) constructs a merchant vessel and deploys its SSI solution, sells the vessel to CMA CMG, who purchase several pieces of equipment from ABB and Wartsila, then also add some additional IoT services from Marlink, its connectivity service provider, and also subscribing to a data analytics company, such as NAPA. Each of the parties will claim a sale, or subscription service for this one smart vessel. As such, calculating the total number of smart ships is rather challenging because if we were to sum each smart ship subscription or service, it would amount to a very high number indeed misrepresenting magnitude of the market.

Key Suspects

Presently, the maritime equipment manufacturers hold the majority of smart shipping services, with companies such as Kongsberg, Wärtsilä, and ABB being quick to extend their digital offerings to existing business operations. For example, as widely publicised, Kongsberg has been heavily involved in the Yara Birkeland, an autonomous container vessel currently being completed and commissioned in Norway. Although the subject of this piece is smart shipping, this element is a key step in the evolution, ultimately, to autonomous vessels. Kongsberg’s intelligent digital platform, Kognifai, enables 3rd party data analytics companies to bring their solutions to a much larger shipping fleet. In addition, one of the company’s key smart shipping and IoT solutions is “Vessel Insight Benchmark”. The new application aims to provide ship metrics and data insights to improve a vessel or a fleet of vessel’s performance and was launched in the middle of 2020. The maritime digital application looks to provide a data-driven insight into the vessel operating profile compared to vessels of similar size and type. The service is based on common definitions and high quality data that provides an instant historic perspective. It is understood 37 per cent of the firm’s maritime revenues are recurring basis. The firm had more 30,000 vessels with vessel insight installed. The Finnish company, Wärtsilä, defining its products and services within the smart shipping realm in itself would be a 50,000 word thesis focusing upon operational efficiencies and cost savings. However, a short summary includes the firm serves Anglo-Eastern’s fleet, more than 600 vessels, with its Fleet Optimisation Solution, a digitalisation suite that enhances efficiency and performance via route optimisation, speed management, weather routing, ship-to-shore reporting, and fleet performance management to reduce fuel consumption. Other services offered include a new online platform that allows companies to manage their installations more efficiently, and the remote accessibility of experts. This tool leverages artificial intelligence and advanced diagnostics to remotely monitor equipment and systems in real time. The firm has quickly transformed its business model to a SaaS rather than traditional CAPEX business model. Consequently, managing the lifecycle of an asset has become paramount and performance gains are achieved via upgrades, fuel conversions, and using data analytics and artificial intelligence to support its customer business decisions. Even by the end of 2019, the business of equipment sales to service revenues were equally split. ABB launched ABB Ability in 2017, digital portfolio that offers hundreds of digital solutions to increase productivity and safety cost effectively. The solution is part of an integrated global network of round-the-clock operations centers that can take care of the full scope of ABB systems on board vessels from afar. Remote diagnostics of shipboard equipment has become a key feature of shipping over the last decade. Sensor-driven onboard monitoring software that fully integrates with analytics ashore plays a central role in facilitating this approach and ABB believes that there are clear maintenance savings available to owners that commit to its package as digitally connected on-duty engineers can solve cases remotely 24/7. Traditional connectivity providers such as Inmarsat, KVH Industries and others are also embracing the smart shipping revolution. For example, Inmarsat now provides dedicated IoT and operational service called Fleet Data. The service or digital ecosystem enables 3rd party data analytic vendors or other solutions to “plug-in” their applications for Inmarsat’s FX vessels. This could be simply to aggregate data functions allowing the user of the service to easily view, monitor, analyse and compare performances of vessel operations. Inmarsat has made Fleet Data available to all its FX and FB vessels – more than 40,000 vessels. The service is offered on a yearly subscription basis and it is estimated that the basic package starts from $1,000 per year, however, costs obviously vary upon the application’s data usage from a bandwidth and capacity standpoint. KVH provides a similar stand-alone IoT service which it launched in June 2019. The solution has three modes: Watch Flow, for 24/7, machine-to-machine (M2M) data delivery compatible with all IoT applications; Flow Intervention for a boosted data capacity and speeds for bulk file transfers, application updates, and general access to the onboard endpoint. Remote Expert Intervention is an on-demand high-speed session for remote face-to-face support and remote equipment access. The company hopes KVH Watch service enable hardware manufacturers, data analytic companies and other IoT service firms to have their own dedicated VSAT terminal. The Watch Flow plan starts from as little as $99 per month and customers do not need to purchase an AgilePlans subscription for the IoT service. The price of the plan is primarily dependent on the number of sensors and data requirements of the user. As stated above, many companies are addressing elements of the smart shipping market in different ways. This patchwork of solutions is a start but still in the primary stages of development. The availability and price of ship satellite connectivity is much better than, say, 5 years ago, and, providing simple solutions to streamline processes onboard a vessel is easy to translate into operational and financial gains. It is expected that a swarm of bigger companies will develop holistic system solutions that will provide a complete oversight and co-ordination for all the software inputs feeding it. These may be companies outside of the maritime sphere.

Market Dynamics

Satellite connectivity is becoming ever more cost effective. It’s highly commoditized and we will see a raft of mergers and acquisitions in the next 18 months within the maritime connectivity sphere. One natural strategy for service providers and operators will be to include and upsell more value added services. Cybersecurity protection and IoT solutions will become focal services in the next two years. Services providers will likely generate more than 40 per cent of their revenues from these new services rather than the connectivity airtime within this period. We will also see it as much more common practice for hardware companies, such as Wartsila or Kongsberg to own their communication terminals onboard customer vessels. Control and accessibility of their resources will be more critical than ever. KVH Industries will likely see some strong upsides from this trend.

Valour Consultancy’s key takeaways

1.      The initial stages of the smart shipping evolution are now fully developed. 2.      A concise and clear definition of a smart vessel is possible, how many smart ships sailing the oceans is still unclear. However, there are many smart shipping solutions being used. 3.      Following the last point, the number of maritime digital applications has exploded and hundreds of vendors are pushing their services. 4.      Large number of acquisitions will be undertaken by the leading companies of hardware manufacturers and service providers. 5.      Service providers will become kingmakers in this field by 2026 onwards, we believe they will quickly purchase the leading 3rd party maritime analytic companies. 6.      The end game is autonomous vessels. [/fusion_text][/fusion_builder_column][fusion_builder_column type="1_1" layout="1_1" spacing="" center_content="no" link="" target="_self" min_height="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" hover_type="none" border_size="0" border_color="" border_style="solid" border_position="all" border_radius="" box_shadow="no" dimension_box_shadow="" box_shadow_blur="0" box_shadow_spread="0" box_shadow_color="" box_shadow_style="" padding_top="" padding_right="" padding_bottom="" padding_left="" margin_top="" margin_bottom="" background_type="single" gradient_start_color="" gradient_end_color="" gradient_start_position="0" gradient_end_position="100" gradient_type="linear" radial_direction="center" linear_angle="180" background_color="" background_image="" background_image_id="" background_position="left top" background_repeat="no-repeat" background_blend_mode="none" animation_type="" animation_direction="left" animation_speed="0.3" animation_offset="" filter_type="regular" filter_hue="0" filter_saturation="100" filter_brightness="100" filter_contrast="100" filter_invert="0" filter_sepia="0" filter_opacity="100" filter_blur="0" filter_hue_hover="0" filter_saturation_hover="100" filter_brightness_hover="100" filter_contrast_hover="100" filter_invert_hover="0" filter_sepia_hover="0" filter_opacity_hover="100" filter_blur_hover="0" last="no"][fusion_separator style_type="default" hide_on_mobile="small-visibility,large-visibility" class="" id="" sep_color="#ffffff" top_margin="20" bottom_margin="20" border_size="" icon="" icon_circle="" icon_circle_color="" width="" alignment="center" /][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

Market Roundup on Maritime Connectivity Acquisitions

Acquisitions in Maritime Connectivity

Over the last two months, the maritime and offshore satellite connectivity market has been sparked with a bout of merger and acquisition activities.

ViaSat to acquire Rignet

In late December 2020, ViaSat announced an agreement to acquire RigNet, an American energy connectivity provider for approximately $222 million. It is believed RigNet’s customer base in the energy market is of strong interest to ViaSat, with the upcoming launch of ViaSat-3, a new constellation of three satellites.

About RigNet

Founded in 2001, RigNet is a US-based service provider of connectivity services, applications and cybersecurity solutions primarily for the offshore oil, gas and energy market. The company is headquartered in Houston (USA) and also has offices in the UK, Singapore, Brazil and another US office in Louisiana. It employs roughly 650 staff globally.

In its latest publicly released financials, Q3 2020, the firm recorded revenues of almost $161 million for the first nine months of 2020, down by $18 million from the same period in 2019. RigNet recorded a net loss of $36.5 million for the same period in 2020, almost double of that in 2019. Not exactly a rosy trajectory over the last two years.

The company divides its business into four segments: managed communications services (MCS), applications and IoT, systems integration, and corporate with its biggest segment, MCS, suffering in 2020 compared to 2019.

However, not all is doom and gloom when RigNet, in October 2020, announced a multiple-year contract with an undisclosed offshore drilling contractor to provide fully MCS and global satellite access to its entire global drilling fleet. The new contract also includes RigNet’s machine learning platform, Intelie, and other supplementary applications, intelligence, and network security solutions.

One key challenges the company has faced is the diminishing number of sites that it manages for MCS; a count in Q3 2020 noted 1,190 sites compared to 1,229 in Q2 2020. In Q3 2019, the firm held 1,386 sites.

Valour’s Take

In Valour’s opinion, the justifications for ViaSat intent to purchase RigNet is not some paradigm leap in market growth or unseen grab of untapped assets.

The move is relatively simple one. RigNet provides a relatively steady business in an uncertain business environment, the energy sector, at the moment.

It allows ViaSat to slowly grow its nascent maritime connectivity proposition and meld it with RigNet’s well-known managed communications services business.

This business has a reasonable array of customers, 500 companies, which encompasses 369 offshore production sites, 173 maritime vessels and a number of other sites.

Finally, one of the main quotes of the great Warren Buffet, always try and buy under-priced assets. At the moment, most energy related companies are relatively lowly priced.

Marlink proposed acquisition of ITC Global

Marlink Group, owned by Apax Partners (France), has signed an agreement to acquire 100 per cent of ITC Global, a maritime and energy service provide owned by Panasonic. The value of the deal as yet to be disclosed, if it ever will.

My question is what value ITC Global brings to Marlink Group, the leading retail maritime service provider?

ITC Global

ITC Global is an American satellite-based communications provider which primarily serves the energy, mining, maritime, and NGO markets. The company was originally set up in 2001 and has its headquarters in Houston, Texas. Interestingly, the firm was acquired by Panasonic in 2015 and now operates as a subsidiary of the Japanese company.

In January 2020, ITC Global partnered with Inmarsat to expand its service to providing Ka-band coverage to energy, maritime and yachting customers. The five-year strategic partnership means ITC Global will act as a reseller for FX. ITC Global’s parent company, Panasonic Avionics, signed a similar agreement with Inmarsat in 2018 to provide inflight connectivity.

Valour’s Take

Marlink Group’s potential acquisition of ITC Global is an interesting move within the maritime connectivity sphere.

Not to second guess Marlink’s case, the firm’s maritime satellite connectivity solution, SeaLink, has made remarkable progress in recent years. Over 2020, the firm increased its SeaLink vessel count by 1,000 from 2019.

That said, Marlink Group, in the past, has not been shy to purchase some key players; OmniAccess, Telemar Group, Radio Holland’s VSAT distribution business over 2016 and 2017. Nonetheless, Marlink has strategised a strong surge of organic growth since.

The proposed purchase of ITC highlights two things. Firstly, this period of organic growth has possibly to come to an end. In the Sigmoid Curve, there are critical phases. Development, introduction, growth, maturity and decline. To arrest the decline, it is vital to catch the next opportunity on the rise, before the current one fells. I believe we are in a spell of acquisitions and mergers within the industry with companies scoping out potential suitors and targets.

Marlink Group is very well known for its presence in the maritime connectivity commercial merchant market, and high-end leisure. As such, ITC Global’s strong maritime offshore energy, passenger and enterprise customer base provides Marlink group with a new market segment to master.

Looking at this from other side of the fence, in my opinion, Panasonic Group has conducted a thorough review of its business operations over the last twelve months. This will indubitably entailed picking which businesses and operations will see the group through, in the long term. Unfortunately, it would seem, Panasonic doesn’t see ITC Global as a long term fit for its business portfolio.

Finally, with the downturn of the energy sector, and speculating that Panasonic were looking for an exit plan in maritime, Marlink Group will likely achieve a very good deal price for ITC Global.

What’s next

It is predicted we will see three more notable mergers and acquisitions over the course of 2021.

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Acquisitions in Maritime Connectivity

Over the last two months, the maritime and offshore satellite connectivity market has been sparked with a bout of merger and acquisition activities.

ViaSat to acquire Rignet

In late December 2020, ViaSat announced an agreement to acquire RigNet, an American energy connectivity provider for approximately $222 million. It is believed RigNet’s customer base in the energy market is of strong interest to ViaSat, with the upcoming launch of ViaSat-3, a new constellation of three satellites.

About RigNet

Founded in 2001, RigNet is a US-based service provider of connectivity services, applications and cybersecurity solutions primarily for the offshore oil, gas and energy market. The company is headquartered in Houston (USA) and also has offices in the UK, Singapore, Brazil and another US office in Louisiana. It employs roughly 650 staff globally. In its latest publicly released financials, Q3 2020, the firm recorded revenues of almost $161 million for the first nine months of 2020, down by $18 million from the same period in 2019. RigNet recorded a net loss of $36.5 million for the same period in 2020, almost double of that in 2019. Not exactly a rosy trajectory over the last two years. The company divides its business into four segments: managed communications services (MCS), applications and IoT, systems integration, and corporate with its biggest segment, MCS, suffering in 2020 compared to 2019. However, not all is doom and gloom when RigNet, in October 2020, announced a multiple-year contract with an undisclosed offshore drilling contractor to provide fully MCS and global satellite access to its entire global drilling fleet. The new contract also includes RigNet's machine learning platform, Intelie, and other supplementary applications, intelligence, and network security solutions. One key challenges the company has faced is the diminishing number of sites that it manages for MCS; a count in Q3 2020 noted 1,190 sites compared to 1,229 in Q2 2020. In Q3 2019, the firm held 1,386 sites.

Valour’s Take

In Valour’s opinion, the justifications for ViaSat intent to purchase RigNet is not some paradigm leap in market growth or unseen grab of untapped assets. The move is relatively simple one. RigNet provides a relatively steady business in an uncertain business environment, the energy sector, at the moment. It allows ViaSat to slowly grow its nascent maritime connectivity proposition and meld it with RigNet’s well-known managed communications services business. This business has a reasonable array of customers, 500 companies, which encompasses 369 offshore production sites, 173 maritime vessels and a number of other sites. Finally, one of the main quotes of the great Warren Buffet, always try and buy under-priced assets. At the moment, most energy related companies are relatively lowly priced.

Marlink proposed acquisition of ITC Global

Marlink Group, owned by Apax Partners (France), has signed an agreement to acquire 100 per cent of ITC Global, a maritime and energy service provide owned by Panasonic. The value of the deal as yet to be disclosed, if it ever will. My question is what value ITC Global brings to Marlink Group, the leading retail maritime service provider?

ITC Global

ITC Global is an American satellite-based communications provider which primarily serves the energy, mining, maritime, and NGO markets. The company was originally set up in 2001 and has its headquarters in Houston, Texas. Interestingly, the firm was acquired by Panasonic in 2015 and now operates as a subsidiary of the Japanese company. In January 2020, ITC Global partnered with Inmarsat to expand its service to providing Ka-band coverage to energy, maritime and yachting customers. The five-year strategic partnership means ITC Global will act as a reseller for FX. ITC Global’s parent company, Panasonic Avionics, signed a similar agreement with Inmarsat in 2018 to provide inflight connectivity.

Valour’s Take

Marlink Group’s potential acquisition of ITC Global is an interesting move within the maritime connectivity sphere. Not to second guess Marlink’s case, the firm’s maritime satellite connectivity solution, SeaLink, has made remarkable progress in recent years. Over 2020, the firm increased its SeaLink vessel count by 1,000 from 2019. That said, Marlink Group, in the past, has not been shy to purchase some key players; OmniAccess, Telemar Group, Radio Holland’s VSAT distribution business over 2016 and 2017. Nonetheless, Marlink has strategised a strong surge of organic growth since. The proposed purchase of ITC highlights two things. Firstly, this period of organic growth has possibly to come to an end. In the Sigmoid Curve, there are critical phases. Development, introduction, growth, maturity and decline. To arrest the decline, it is vital to catch the next opportunity on the rise, before the current one fells. I believe we are in a spell of acquisitions and mergers within the industry with companies scoping out potential suitors and targets. Marlink Group is very well known for its presence in the maritime connectivity commercial merchant market, and high-end leisure. As such, ITC Global’s strong maritime offshore energy, passenger and enterprise customer base provides Marlink group with a new market segment to master. Looking at this from other side of the fence, in my opinion, Panasonic Group has conducted a thorough review of its business operations over the last twelve months. This will indubitably entailed picking which businesses and operations will see the group through, in the long term. Unfortunately, it would seem, Panasonic doesn’t see ITC Global as a long term fit for its business portfolio. Finally, with the downturn of the energy sector, and speculating that Panasonic were looking for an exit plan in maritime, Marlink Group will likely achieve a very good deal price for ITC Global.

What’s next

It is predicted we will see three more notable mergers and acquisitions over the course of 2021. [/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

Can VSAT, Smart Shipping Demand Revive the Hard-Hit Maritime Connectivity Market?

This article was first published in Via Satellite.

The past year will be known as a year of strife and great difficulty for the maritime satellite communication market, as a number of key applications have been greatly affected by the restrictions of the COVID-19 pandemic.  In Valour Consultancy’s H1 2020 Maritime Connectivity report, we highlighted how the trade sanctions between the United States and the Republic of China badly affected world trade. The current and prolonged effects of COVID-19 have, and will continue to be much worse. However, the pandemic has also highlighted the need for technologies that will provide the “green shoots” of recovery in the digitalization and communications realm of commercial maritime.

Reflections on 2020

The L-band market is believed to have been quite resilient to the troubles of 2020, with estimated global revenues in 2020 assumed to have declined by $25 million from 2019, and the number of vessels using L-band technology decreasing by 2,680 in the same period. Inmarsat, the biggest maritime L-band provider, no longer discloses its financial figures since it was purchased. However, it’s FleetBroadband business is expected to have only slightly reduced from 2019.

Iridium, like many companies, has only released its Third Quarter (Q3) 2020 financial results at this point. But Iridium’s commercial voice and data service (maritime forms part of this segmentation) revenues were down by $3 million for the first nine months of 2020, compared to the same period in 2019. Furthermore, the majority of this drop is attributed to the aviation rather maritime operations, as stated in the financial report. Its broadband revenues were actually up $4 million, and Internet of Things (IoT) data revenues flat for the same first nine months of 2020 versus 2019.

Delving into the Very Small Aperture Terminal (VSAT) market, Valour Consultancy estimates the retail market, the total value of airtime sold directly to the end user, dropped to $1 billion in 2020, a decline from $1.15 billion in 2019.

The passenger market, in particular sea cruises, has come to a complete standstill. The number of active VSAT connected passenger vessels have fallen from nearly 4,100 in 2019, to less than 700 in 2020. Although this is a dramatic market fall, the key question is what portion of service fees for satellite connectivity will redundant vessels have to pay — full, partial, or none?

The answer is yes and no.

From a wholesale perspective, large batches of capacity and bandwidth are agreed and contractual obligations for payment are scheduled years in advance. As such, even though demand for connectivity has reduced due to vessels being docked, service providers will nonetheless still need to pay for these services. The key questions are whether the end users will pay the service providers, or deferred? One could see how working in Inmarsat or Marlink’s accounts receivable team could be challenging.

Service providers offering customers flexible payment term contracts would have brought in only a  fraction of their 2019 revenues if customers are not contractually obliged to pay for redundant vessels. As we understand it, most merchant vendors will have to pay 80% of their monthly contracted ARPU if not in use. With passenger cruise vessels, it’s uncertain whether they will pay the full ARPU per vessel in their service level agreements. My guess is yes — but smart connectivity providers may opt to tie their customers down to longer contract terms if customers are unable to pay current bills.

Offshore energy has also been badly hit, and Valour Consultancy anticipates 2,500 vessels/assets were made redundant in 2020. However, companies in this application are much more astute at catering to this in their service level agreements and have clauses for reduced service payments during periods of downtime.

The challenge with articulating how revenues are affected within the industry depends on multiple factors, such as wholesale or retail provider of connectivity services. Our gut feeling is maritime wholesale satellite revenues were flat to slightly up in 2020, compared to 2019; however, service provider retail revenues (to the end user) were possibly down by between 10-15%.

Revenues generated from 2020 VSAT Ku- and C-band equipped vessel market are predicted to decline by 19% and 17% from 2019’s standings, respectively. With the number of active vessels using the Ku- and C-band systems are also anticipated to decline between minus 11% and 5% over the same period.

Interestingly, Inmarsat has reported an increase in its FX fleet and as such, we have noted an increase in Ka-band equipped vessels, standing around an estimated 10,000 ships by the end of 2020. The company no longer reports its financial results; however, Valour Consultancy believes the firm has increased its FX vessel count by 10% and reflected this in the global Ka-band commercial revenues, thought to be around $255 million by the end of 2020.

The Next 12 Months

In the long term, vessel numbers with VSAT connectivity are expected to increase to nearly 66,000 by the end of 2029, and we project to see maritime VSAT revenues return to the same levels as 2019. The take up of VSAT services for broadband connectivity, combined with a decline of L-band connected vessels, will still remain the primary driver of the market going forward. A notable milestone is retail VSAT and Mobile Satellite Service (MSS) maritime services surpassing $2 billion by the end of 2025.

A Bright Spot in Smart Shipping

Despite the downturn of maritime connectivity services in 2020, one technology segment within the market has grown and will continue growing for many years: maritime digital applications and smart shipping technologies.

There is a realization that maritime digital applications and smart shipping technologies have come to the forefront of the industry. With the restricted movement of crew, depressed freight rates due to limited demand, and closed facilities, monitoring and managing assets without human interaction is crucial. The largest penetration of smart shipping technologies is within the passenger and offshore energy markets. However, we actually see the biggest untapped potential within the merchant sector. Container vessels, tankers, and bulk carriers are all prime targets for these solutions. Valour Consultancy estimates smart shipping solutions sold to merchant market amounted to $139 million in 2019 and will almost quadruple by the end of the decade.

Valour Consultancy foresees the current pick up of the merchant market as a positive sign for smart shipping and maritime IoT services. With the operational headaches and inability to perform key functions at sea, shipping companies will likely invest heavily in remote monitoring, optimizations, and control.

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[fusion_builder_container hundred_percent="no" hundred_percent_height="no" hundred_percent_height_scroll="no" hundred_percent_height_center_content="yes" equal_height_columns="no" menu_anchor="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" status="published" publish_date="" class="" id="" border_size="" border_color="" border_style="solid" margin_top="" margin_bottom="" padding_top="" padding_right="" padding_bottom="" padding_left="" gradient_start_color="" gradient_end_color="" gradient_start_position="0" gradient_end_position="100" gradient_type="linear" radial_direction="center" linear_angle="180" background_color="" background_image="" background_position="center center" background_repeat="no-repeat" fade="no" background_parallax="none" enable_mobile="no" parallax_speed="0.3" background_blend_mode="none" video_mp4="" video_webm="" video_ogv="" video_url="" video_aspect_ratio="16:9" video_loop="yes" video_mute="yes" video_preview_image="" filter_hue="0" filter_saturation="100" filter_brightness="100" filter_contrast="100" filter_invert="0" filter_sepia="0" filter_opacity="100" filter_blur="0" filter_hue_hover="0" filter_saturation_hover="100" filter_brightness_hover="100" filter_contrast_hover="100" filter_invert_hover="0" filter_sepia_hover="0" filter_opacity_hover="100" filter_blur_hover="0"][fusion_builder_row][fusion_builder_column type="1_1" layout="1_1" spacing="" center_content="no" link="" target="_self" min_height="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" hover_type="none" border_size="0" border_color="" border_style="solid" border_position="all" border_radius="" box_shadow="no" dimension_box_shadow="" box_shadow_blur="0" box_shadow_spread="0" box_shadow_color="" box_shadow_style="" padding_top="" padding_right="" padding_bottom="" padding_left="" margin_top="" margin_bottom="" background_type="single" gradient_start_color="" gradient_end_color="" gradient_start_position="0" gradient_end_position="100" gradient_type="linear" radial_direction="center" linear_angle="180" background_color="" background_image="" background_image_id="" background_position="left top" background_repeat="no-repeat" background_blend_mode="none" animation_type="" animation_direction="left" animation_speed="0.3" animation_offset="" filter_type="regular" filter_hue="0" filter_saturation="100" filter_brightness="100" filter_contrast="100" filter_invert="0" filter_sepia="0" filter_opacity="100" filter_blur="0" filter_hue_hover="0" filter_saturation_hover="100" filter_brightness_hover="100" filter_contrast_hover="100" filter_invert_hover="0" filter_sepia_hover="0" filter_opacity_hover="100" filter_blur_hover="0" last="no"][fusion_imageframe image_id="5707|full" max_width="" style_type="" blur="" stylecolor="" hover_type="none" bordersize="" bordercolor="" borderradius="" align="none" lightbox="no" gallery_id="" lightbox_image="" lightbox_image_id="" alt="" link="" linktarget="_self" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" animation_type="" animation_direction="left" animation_speed="0.3" animation_offset=""]https://valourconsultancy.com/wp-content/uploads/2021/02/Source-Via-Satellite.png[/fusion_imageframe][fusion_separator style_type="default" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" sep_color="#ffffff" top_margin="20" bottom_margin="20" border_size="" icon="" icon_circle="" icon_circle_color="" width="" alignment="center" /][fusion_text columns="" column_min_width="" column_spacing="" rule_style="default" rule_size="" rule_color="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" animation_type="" animation_direction="left" animation_speed="0.3" animation_offset=""] This article was first published in Via Satellite. The past year will be known as a year of strife and great difficulty for the maritime satellite communication market, as a number of key applications have been greatly affected by the restrictions of the COVID-19 pandemic.  In Valour Consultancy’s H1 2020 Maritime Connectivity report, we highlighted how the trade sanctions between the United States and the Republic of China badly affected world trade. The current and prolonged effects of COVID-19 have, and will continue to be much worse. However, the pandemic has also highlighted the need for technologies that will provide the “green shoots” of recovery in the digitalization and communications realm of commercial maritime.

Reflections on 2020

The L-band market is believed to have been quite resilient to the troubles of 2020, with estimated global revenues in 2020 assumed to have declined by $25 million from 2019, and the number of vessels using L-band technology decreasing by 2,680 in the same period. Inmarsat, the biggest maritime L-band provider, no longer discloses its financial figures since it was purchased. However, it’s FleetBroadband business is expected to have only slightly reduced from 2019. Iridium, like many companies, has only released its Third Quarter (Q3) 2020 financial results at this point. But Iridium’s commercial voice and data service (maritime forms part of this segmentation) revenues were down by $3 million for the first nine months of 2020, compared to the same period in 2019. Furthermore, the majority of this drop is attributed to the aviation rather maritime operations, as stated in the financial report. Its broadband revenues were actually up $4 million, and Internet of Things (IoT) data revenues flat for the same first nine months of 2020 versus 2019. Delving into the Very Small Aperture Terminal (VSAT) market, Valour Consultancy estimates the retail market, the total value of airtime sold directly to the end user, dropped to $1 billion in 2020, a decline from $1.15 billion in 2019. The passenger market, in particular sea cruises, has come to a complete standstill. The number of active VSAT connected passenger vessels have fallen from nearly 4,100 in 2019, to less than 700 in 2020. Although this is a dramatic market fall, the key question is what portion of service fees for satellite connectivity will redundant vessels have to pay — full, partial, or none? The answer is yes and no. From a wholesale perspective, large batches of capacity and bandwidth are agreed and contractual obligations for payment are scheduled years in advance. As such, even though demand for connectivity has reduced due to vessels being docked, service providers will nonetheless still need to pay for these services. The key questions are whether the end users will pay the service providers, or deferred? One could see how working in Inmarsat or Marlink’s accounts receivable team could be challenging. Service providers offering customers flexible payment term contracts would have brought in only a  fraction of their 2019 revenues if customers are not contractually obliged to pay for redundant vessels. As we understand it, most merchant vendors will have to pay 80% of their monthly contracted ARPU if not in use. With passenger cruise vessels, it’s uncertain whether they will pay the full ARPU per vessel in their service level agreements. My guess is yes — but smart connectivity providers may opt to tie their customers down to longer contract terms if customers are unable to pay current bills. Offshore energy has also been badly hit, and Valour Consultancy anticipates 2,500 vessels/assets were made redundant in 2020. However, companies in this application are much more astute at catering to this in their service level agreements and have clauses for reduced service payments during periods of downtime. The challenge with articulating how revenues are affected within the industry depends on multiple factors, such as wholesale or retail provider of connectivity services. Our gut feeling is maritime wholesale satellite revenues were flat to slightly up in 2020, compared to 2019; however, service provider retail revenues (to the end user) were possibly down by between 10-15%. Revenues generated from 2020 VSAT Ku- and C-band equipped vessel market are predicted to decline by 19% and 17% from 2019’s standings, respectively. With the number of active vessels using the Ku- and C-band systems are also anticipated to decline between minus 11% and 5% over the same period. Interestingly, Inmarsat has reported an increase in its FX fleet and as such, we have noted an increase in Ka-band equipped vessels, standing around an estimated 10,000 ships by the end of 2020. The company no longer reports its financial results; however, Valour Consultancy believes the firm has increased its FX vessel count by 10% and reflected this in the global Ka-band commercial revenues, thought to be around $255 million by the end of 2020.

The Next 12 Months

In the long term, vessel numbers with VSAT connectivity are expected to increase to nearly 66,000 by the end of 2029, and we project to see maritime VSAT revenues return to the same levels as 2019. The take up of VSAT services for broadband connectivity, combined with a decline of L-band connected vessels, will still remain the primary driver of the market going forward. A notable milestone is retail VSAT and Mobile Satellite Service (MSS) maritime services surpassing $2 billion by the end of 2025.

A Bright Spot in Smart Shipping

Despite the downturn of maritime connectivity services in 2020, one technology segment within the market has grown and will continue growing for many years: maritime digital applications and smart shipping technologies. There is a realization that maritime digital applications and smart shipping technologies have come to the forefront of the industry. With the restricted movement of crew, depressed freight rates due to limited demand, and closed facilities, monitoring and managing assets without human interaction is crucial. The largest penetration of smart shipping technologies is within the passenger and offshore energy markets. However, we actually see the biggest untapped potential within the merchant sector. Container vessels, tankers, and bulk carriers are all prime targets for these solutions. Valour Consultancy estimates smart shipping solutions sold to merchant market amounted to $139 million in 2019 and will almost quadruple by the end of the decade. Valour Consultancy foresees the current pick up of the merchant market as a positive sign for smart shipping and maritime IoT services. With the operational headaches and inability to perform key functions at sea, shipping companies will likely invest heavily in remote monitoring, optimizations, and control. [/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

Marlink Remains Largest Retail VSAT Service Provider in 2019

In Valour Consultancy’s latest maritime connectivity report, The Future of Maritime Connectivity – 2020 edition, Marlink Group remained the largest retail service provider for VSAT communication services in 2019. 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 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 with large numbers of merchant seafarers 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 that Marlink had more than seven thousand vessels subscribed to its SeaLink VSAT service today. 

Valour Consultancy ranked Speedcast second in the retail VSAT 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 and 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, purchased by a private equity consortium in 2019, 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), one of Japan’s largest shipping companies, who announced 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 and 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, opening up a significant number of vessels for new business. 

Unfortunately, Global Eagle has suffered somewhat over recent years and its market share dropped from 10 per cent in 2018 to less than 8 per cent 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. 

Valour Consultancy’s take on the retail VSAT maritime connectivity standings in 2019: 

Looking Forward 

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 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 nextNonetheless, other markets have remained less affected, if not up from 2019. The effect of having so many seafarers in the merchant market stranded at sea has been to increase crew welfare video, messaging and telephone communication usage over the last six months. Some of the super wealthy have also seconded themselves on their private superyachts for the period. In addition, the demand for overall food produce such as seafood has remained stable and 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. For more information please click here 

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[fusion_builder_container hundred_percent="no" hundred_percent_height="no" hundred_percent_height_scroll="no" hundred_percent_height_center_content="yes" equal_height_columns="no" menu_anchor="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" status="published" publish_date="" class="" id="" border_size="" border_color="" border_style="solid" margin_top="" margin_bottom="" padding_top="" padding_right="" padding_bottom="" padding_left="" gradient_start_color="" gradient_end_color="" gradient_start_position="0" gradient_end_position="100" gradient_type="linear" radial_direction="center" linear_angle="180" background_color="" background_image="" background_position="center center" background_repeat="no-repeat" fade="no" background_parallax="none" enable_mobile="no" parallax_speed="0.3" background_blend_mode="none" video_mp4="" video_webm="" video_ogv="" video_url="" video_aspect_ratio="16:9" video_loop="yes" video_mute="yes" video_preview_image="" filter_hue="0" filter_saturation="100" filter_brightness="100" filter_contrast="100" filter_invert="0" filter_sepia="0" filter_opacity="100" filter_blur="0" filter_hue_hover="0" filter_saturation_hover="100" filter_brightness_hover="100" filter_contrast_hover="100" filter_invert_hover="0" filter_sepia_hover="0" filter_opacity_hover="100" filter_blur_hover="0"][fusion_builder_row][fusion_builder_column type="1_1" layout="1_1" spacing="" center_content="no" link="" target="_self" min_height="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" hover_type="none" border_size="0" border_color="" border_style="solid" border_position="all" border_radius="" box_shadow="no" dimension_box_shadow="" box_shadow_blur="0" box_shadow_spread="0" box_shadow_color="" box_shadow_style="" padding_top="" padding_right="" padding_bottom="" padding_left="" margin_top="" margin_bottom="" background_type="single" gradient_start_color="" gradient_end_color="" gradient_start_position="0" gradient_end_position="100" gradient_type="linear" radial_direction="center" linear_angle="180" background_color="" background_image="" background_image_id="" background_position="left top" background_repeat="no-repeat" background_blend_mode="none" animation_type="" animation_direction="left" animation_speed="0.3" animation_offset="" filter_type="regular" filter_hue="0" filter_saturation="100" filter_brightness="100" filter_contrast="100" filter_invert="0" filter_sepia="0" filter_opacity="100" filter_blur="0" filter_hue_hover="0" filter_saturation_hover="100" filter_brightness_hover="100" filter_contrast_hover="100" filter_invert_hover="0" filter_sepia_hover="0" filter_opacity_hover="100" filter_blur_hover="0" last="no"][fusion_imageframe image_id="5634|full" max_width="" style_type="" blur="" stylecolor="" hover_type="none" bordersize="" bordercolor="" borderradius="" align="none" lightbox="no" gallery_id="" lightbox_image="" lightbox_image_id="" alt="" link="" linktarget="_self" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" animation_type="" animation_direction="left" animation_speed="0.3" animation_offset=""]https://valourconsultancy.com/wp-content/uploads/2020/09/v240mt_sixten-lundgren_for-web_w1860px-e1605709183233.jpg[/fusion_imageframe][fusion_separator style_type="default" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" sep_color="#ffffff" top_margin="20" bottom_margin="20" border_size="" icon="" icon_circle="" icon_circle_color="" width="" alignment="center" /][fusion_text columns="" column_min_width="" column_spacing="" rule_style="default" rule_size="" rule_color="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" animation_type="" animation_direction="left" animation_speed="0.3" animation_offset=""] In Valour Consultancy’s latest maritime connectivity report, The Future of Maritime Connectivity – 2020 edition, Marlink Group remained the largest retail service provider for VSAT communication services in 2019. 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 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 with large numbers of merchant seafarers 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 that Marlink had more than seven thousand vessels subscribed to its SeaLink VSAT service today.  Valour Consultancy ranked Speedcast second in the retail VSAT 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 and 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, purchased by a private equity consortium in 2019, 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), one of Japan’s largest shipping companies, who announced 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 and 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, opening up a significant number of vessels for new business.  Unfortunately, Global Eagle has suffered somewhat over recent years and its market share dropped from 10 per cent in 2018 to less than 8 per cent 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.  Valour Consultancy’s take on the retail VSAT maritime connectivity standings in 2019:  Looking Forward  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 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 nextNonetheless, other markets have remained less affected, if not up from 2019. The effect of having so many seafarers in the merchant market stranded at sea has been to increase crew welfare video, messaging and telephone communication usage over the last six months. Some of the super wealthy have also seconded themselves on their private superyachts for the period. In addition, the demand for overall food produce such as seafood has remained stable and 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. For more information please click here  [/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

Review of Onboard VSAT Connectivity on the Spirit of Tasmania

As part of Valour Consultancy’s remit to produce concise and comprehensive market research reports on the maritime connectivity market, we also like to get out of the office to test maritime connectivity systems out.

On Thursday 17th of January 2019, I crossed the Bass Strait from Melbourne to Devonport on the Spirit of Tasmania. The voyage was a relatively short duration of slightly more than 9 hours. I left Port Phillip Bay at 21:45 and arrived in Devonport at 07:00 of the morning of Friday 18th of January 2019.

During the journey, I purchased the onboard Full Sailing Wi-Fi pass for $20 AUD, equating to $14.35 USD. One other option was available, an hour Wi-Fi pass for $10 AUD.

Performance of Wi-Fi Network
Time – 22:24


My first speed test, 45 minutes into my journey, showed a download speed of 9.85 Mbps, and upload speed of 0.85 Mbps. The high download speed likely reflects the relatively few passengers using the service at the time. I didn’t test out internet pass for streaming any audio or video content, however, on the vessel’s marketing material, it states “certain types of content or high bandwidth intensive usages may be limited or blocked”. It was noticeable that web pages were taking 2-3 seconds to load up, and this is most likely a reflection of the high latency of the connection, which was stated in the marketing material of the vessel’s Internet pass.

Time – 00:28

My second speed test, almost three hours into the journey, and a significant distance from port, resulted in a much lower download speed, 2.54 Mbps, and an upload speed that was slightly lower than my first test of 0.80 Mbps.
It is unlikely more passengers would have been using the vessel’s connectivity system. It is possible more vessels were using the same capacity in the same area, or the system switched to another beam with less available capacity. On closer examination of Thaicom 4’s sport beams, it looks like there is one spot beam covering the Port Phillip Bay area close to land and another covering much of the rest of the Bass Strait and Tasmania.
Overall, I was very impressed with the speed of the service and ease of use, although I did encounter a few security warnings upon initially joining the network.

Service Provider and Satellite Operator

Shortly after purchasing the Internet pass, I received an invoice from Nava System – a service platform run by Orion Satellite Systems for its maritime activities. The company is based in Perth, Western Australia and is owned 100 per cent by Thaicom.
The Thai satellite operator serves five key verticals, and its maritime service resides in its mobility portfolio. The service operates predominantly on its IPStar (Thaicom – 4 satellite) Ku-band HTS service which is regionally focussed on China, India, Japan and the South East Asian countries, as well as Australia and New Zealand. The satellite has a Ku-band capacity of 45 Gbps.
Overall, the satellite operator has four other satellites and serves 13 countries in the Asia-Pacific, Middle East and Africa regions.
Please see the coverage map of Thaicom’s satellite 4 coverage service below:

Spirit of Tasmania aside, Thaicom’s other notable wins include announcing, in August 2018, Uniwise Offshore Limited, an Asian offshore support vessel operator that will use Nava on its entire fleet of more than 30 vessels. In November 2018 during in the firm’s Q3 2018 investor relations presentation, it was revealed that an additional 27 vessels were added to the Nava platform in Thailand, reaching a total of 47 vessels. Thaicom has also signed a contract with the Royal Thai Navy for an additional 12 vessels.

Equipment

Upon investigation on the top deck I caught a glimpse of two units, a large VSAT unit manufactured by SeaTel, and a Sailor L-band FBB terminal as a back-up system. It was difficult to gauge the size of the antenna due to the distance they were away from me.

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[fusion_builder_container hundred_percent="no" equal_height_columns="no" menu_anchor="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" background_color="" background_image="" background_position="center center" background_repeat="no-repeat" fade="no" background_parallax="none" parallax_speed="0.3" video_mp4="" video_webm="" video_ogv="" video_url="" video_aspect_ratio="16:9" video_loop="yes" video_mute="yes" overlay_color="" video_preview_image="" border_size="" border_color="" border_style="solid" padding_top="" padding_bottom="" padding_left="" padding_right=""][fusion_builder_row][fusion_builder_column type="1_1" layout="1_1" background_position="left top" background_color="" border_size="" border_color="" border_style="solid" border_position="all" spacing="yes" background_image="" background_repeat="no-repeat" padding_top="" padding_right="" padding_bottom="" padding_left="" margin_top="0px" margin_bottom="0px" class="" id="" animation_type="" animation_speed="0.3" animation_direction="left" hide_on_mobile="small-visibility,medium-visibility,large-visibility" center_content="no" last="no" min_height="" hover_type="none" link=""][fusion_text columns="" column_min_width="" column_spacing="" rule_style="default" rule_size="" rule_color="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" animation_type="" animation_direction="left" animation_speed="0.3" animation_offset=""] As part of Valour Consultancy’s remit to produce concise and comprehensive market research reports on the maritime connectivity market, we also like to get out of the office to test maritime connectivity systems out. On Thursday 17th of January 2019, I crossed the Bass Strait from Melbourne to Devonport on the Spirit of Tasmania. The voyage was a relatively short duration of slightly more than 9 hours. I left Port Phillip Bay at 21:45 and arrived in Devonport at 07:00 of the morning of Friday 18th of January 2019. During the journey, I purchased the onboard Full Sailing Wi-Fi pass for $20 AUD, equating to $14.35 USD. One other option was available, an hour Wi-Fi pass for $10 AUD. Performance of Wi-Fi Network Time – 22:24 My first speed test, 45 minutes into my journey, showed a download speed of 9.85 Mbps, and upload speed of 0.85 Mbps. The high download speed likely reflects the relatively few passengers using the service at the time. I didn’t test out internet pass for streaming any audio or video content, however, on the vessel’s marketing material, it states “certain types of content or high bandwidth intensive usages may be limited or blocked”. It was noticeable that web pages were taking 2-3 seconds to load up, and this is most likely a reflection of the high latency of the connection, which was stated in the marketing material of the vessel’s Internet pass. Time – 00:28 My second speed test, almost three hours into the journey, and a significant distance from port, resulted in a much lower download speed, 2.54 Mbps, and an upload speed that was slightly lower than my first test of 0.80 Mbps. It is unlikely more passengers would have been using the vessel’s connectivity system. It is possible more vessels were using the same capacity in the same area, or the system switched to another beam with less available capacity. On closer examination of Thaicom 4’s sport beams, it looks like there is one spot beam covering the Port Phillip Bay area close to land and another covering much of the rest of the Bass Strait and Tasmania. Overall, I was very impressed with the speed of the service and ease of use, although I did encounter a few security warnings upon initially joining the network. Service Provider and Satellite Operator Shortly after purchasing the Internet pass, I received an invoice from Nava System – a service platform run by Orion Satellite Systems for its maritime activities. The company is based in Perth, Western Australia and is owned 100 per cent by Thaicom. The Thai satellite operator serves five key verticals, and its maritime service resides in its mobility portfolio. The service operates predominantly on its IPStar (Thaicom – 4 satellite) Ku-band HTS service which is regionally focussed on China, India, Japan and the South East Asian countries, as well as Australia and New Zealand. The satellite has a Ku-band capacity of 45 Gbps. Overall, the satellite operator has four other satellites and serves 13 countries in the Asia-Pacific, Middle East and Africa regions. Please see the coverage map of Thaicom’s satellite 4 coverage service below: Spirit of Tasmania aside, Thaicom’s other notable wins include announcing, in August 2018, Uniwise Offshore Limited, an Asian offshore support vessel operator that will use Nava on its entire fleet of more than 30 vessels. In November 2018 during in the firm’s Q3 2018 investor relations presentation, it was revealed that an additional 27 vessels were added to the Nava platform in Thailand, reaching a total of 47 vessels. Thaicom has also signed a contract with the Royal Thai Navy for an additional 12 vessels. Equipment Upon investigation on the top deck I caught a glimpse of two units, a large VSAT unit manufactured by SeaTel, and a Sailor L-band FBB terminal as a back-up system. It was difficult to gauge the size of the antenna due to the distance they were away from me. [/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

The Future of Maritime Connectivity – A Sneak Preview

In October 2018, Valour Consultancy will publish a long-awaited update to its maritime connectivity report. For those that simply cannot wait to get a hold of this information, we thought we’d share a sneak peek of our just-realised preliminary data…

Our statistics show that the global maritime connectivity market will continue to grow strongly in 2018, with annual service revenues projected to reach $1.6 billion by the end of the year. This represents a 5.4 per cent increase from 2017.

The VSAT portion of the market is anticipated to drive future growth, with MSS service revenues declining over the coming years. By the end of 2017, VSAT terminals accounted for only nine per cent of the installed base of vessels with some type of connectivity system installed. This will increase to 10 per cent by the end of 2018 and 18 per cent by 2027.

Revenues from VSAT terminal services represented 68 per cent of the total market (equivalent to some $1 billion) in 2017. Average monthly revenues per terminal for C-, Ku-, and Ka-band services differ considerably, however, and were recorded at $5,750, $3,078, and $2,757, respectively, in 2017. In comparison, average monthly service revenues for L-band terminals were just $169.

The passenger segment is a particularly lucrative market as many cruise and ferry line operators are seeking out greater satellite bandwidth capacities to match an ever-increasing demand from passengers to use Internet-enabled smartphones and tablets. Not only do people want to eat their breakfasts, lunches, and dinners; they wish to take pictures of them and post them on social media pages for all the world to see (or sea, if you pardon the pun).

In other maritime verticals, such as merchant, the desire to improve crew welfare is a major driver for the adoption of VSAT technologies for voice, video and email communications. Spending months away from friends and family without any communications can be sapping on morale and will likely lead to staff reconsidering their career or employment choices.

Another major driver within the shipping industry is the digitalisation of vessel operations and increasing operational efficiencies. One key cost saver is anticipating maintenance or repair work before a piece of machinery on the vessel breaks down out at sea, which is much costlier to fix than a vessel docked at a port.

Furthermore, people’s expectations are changing to the degree that not having the ability to access emails or messages is intolerable no matter where they are in the world, on land, at sea or in the air. This is a very notable trend in the leisure market. Yacht or smaller leisure boat owners want to continue with their normal life and business routines whilst sailing around the world. Access to connectivity is essential for them to achieve this.

The Future of Maritime Connectivity” report projects maritime connectivity service revenues will reach almost $2.1 billion by the end of 2027. The leisure and passenger segments are predicted to be the fastest growing areas. Indeed, ARPU for some of the biggest cruise vessels using VSAT systems is expected to easily surpass $30,000 per month.

Speedcast, the Australian service provider, has been very successful in the passenger market thanks in part to the 2017 acquisition of Harris Caprock and August 2018 purchase of Globecomm.

Within the next ten years, global VSAT terminal deployments will treble to more than 72,000 units. The Ka-band market is projected to record the biggest increase, expanding ten-fold from a small base of around 3,000 terminals at the end of 2017, to greater than 30,000 by 2027. In fact, Inmarsat recently revealed that it expects to carry out the 5,000th ship installation of its Fleet Xpress solution by the end of this month, which gives an idea of just how quickly this particular technology is being adopted.

With the prospects for VSAT in maritime incredibly rosy, it can be easy to overlook the MSS market. As such, the report also delves into the low-speed and no voice MSS segment (GMDSS and asset tracking) of the maritime communications market and provides forecasts for the broadband and voice portion (Fleet Broadband and OpenPort). Although VSAT is steadily cannibalising these markets across different maritime verticals, annual L-band service revenues are projected to decline at a slower rate than some might expect. Demand in the fishing, merchant and leisure sectors will continue to support this limited bandwidth technology.

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[fusion_builder_container hundred_percent="no" equal_height_columns="no" menu_anchor="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" background_color="" background_image="" background_position="center center" background_repeat="no-repeat" fade="no" background_parallax="none" parallax_speed="0.3" video_mp4="" video_webm="" video_ogv="" video_url="" video_aspect_ratio="16:9" video_loop="yes" video_mute="yes" overlay_color="" video_preview_image="" border_size="" border_color="" border_style="solid" padding_top="" padding_bottom="" padding_left="" padding_right=""][fusion_builder_row][fusion_builder_column type="1_1" layout="1_1" background_position="left top" background_color="" border_size="" border_color="" border_style="solid" border_position="all" spacing="yes" background_image="" background_repeat="no-repeat" padding_top="" padding_right="" padding_bottom="" padding_left="" margin_top="0px" margin_bottom="0px" class="" id="" animation_type="" animation_speed="0.3" animation_direction="left" hide_on_mobile="small-visibility,medium-visibility,large-visibility" center_content="no" last="no" min_height="" hover_type="none" link=""][fusion_imageframe image_id="4867|full" max_width="" style_type="" blur="" stylecolor="" hover_type="none" bordersize="" bordercolor="" borderradius="" align="center" lightbox="no" gallery_id="" lightbox_image="" lightbox_image_id="" alt="" link="" linktarget="_self" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" animation_type="" animation_direction="left" animation_speed="0.3" animation_offset=""]http://217.199.187.200/valourconsultancy.com/wp-content/uploads/2018/09/yacht-3480913_1280-min-1024x682-1.jpg[/fusion_imageframe][fusion_separator style_type="default" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" sep_color="#ffffff" top_margin="20" bottom_margin="20" border_size="" icon="" icon_circle="" icon_circle_color="" width="" alignment="center" /][fusion_text]In October 2018, Valour Consultancy will publish a long-awaited update to its maritime connectivity report. For those that simply cannot wait to get a hold of this information, we thought we’d share a sneak peek of our just-realised preliminary data… Our statistics show that the global maritime connectivity market will continue to grow strongly in 2018, with annual service revenues projected to reach $1.6 billion by the end of the year. This represents a 5.4 per cent increase from 2017. The VSAT portion of the market is anticipated to drive future growth, with MSS service revenues declining over the coming years. By the end of 2017, VSAT terminals accounted for only nine per cent of the installed base of vessels with some type of connectivity system installed. This will increase to 10 per cent by the end of 2018 and 18 per cent by 2027. Revenues from VSAT terminal services represented 68 per cent of the total market (equivalent to some $1 billion) in 2017. Average monthly revenues per terminal for C-, Ku-, and Ka-band services differ considerably, however, and were recorded at $5,750, $3,078, and $2,757, respectively, in 2017. In comparison, average monthly service revenues for L-band terminals were just $169. The passenger segment is a particularly lucrative market as many cruise and ferry line operators are seeking out greater satellite bandwidth capacities to match an ever-increasing demand from passengers to use Internet-enabled smartphones and tablets. Not only do people want to eat their breakfasts, lunches, and dinners; they wish to take pictures of them and post them on social media pages for all the world to see (or sea, if you pardon the pun). In other maritime verticals, such as merchant, the desire to improve crew welfare is a major driver for the adoption of VSAT technologies for voice, video and email communications. Spending months away from friends and family without any communications can be sapping on morale and will likely lead to staff reconsidering their career or employment choices. Another major driver within the shipping industry is the digitalisation of vessel operations and increasing operational efficiencies. One key cost saver is anticipating maintenance or repair work before a piece of machinery on the vessel breaks down out at sea, which is much costlier to fix than a vessel docked at a port. Furthermore, people’s expectations are changing to the degree that not having the ability to access emails or messages is intolerable no matter where they are in the world, on land, at sea or in the air. This is a very notable trend in the leisure market. Yacht or smaller leisure boat owners want to continue with their normal life and business routines whilst sailing around the world. Access to connectivity is essential for them to achieve this. “The Future of Maritime Connectivity” report projects maritime connectivity service revenues will reach almost $2.1 billion by the end of 2027. The leisure and passenger segments are predicted to be the fastest growing areas. Indeed, ARPU for some of the biggest cruise vessels using VSAT systems is expected to easily surpass $30,000 per month. Speedcast, the Australian service provider, has been very successful in the passenger market thanks in part to the 2017 acquisition of Harris Caprock and August 2018 purchase of Globecomm. Within the next ten years, global VSAT terminal deployments will treble to more than 72,000 units. The Ka-band market is projected to record the biggest increase, expanding ten-fold from a small base of around 3,000 terminals at the end of 2017, to greater than 30,000 by 2027. In fact, Inmarsat recently revealed that it expects to carry out the 5,000th ship installation of its Fleet Xpress solution by the end of this month, which gives an idea of just how quickly this particular technology is being adopted. With the prospects for VSAT in maritime incredibly rosy, it can be easy to overlook the MSS market. As such, the report also delves into the low-speed and no voice MSS segment (GMDSS and asset tracking) of the maritime communications market and provides forecasts for the broadband and voice portion (Fleet Broadband and OpenPort). Although VSAT is steadily cannibalising these markets across different maritime verticals, annual L-band service revenues are projected to decline at a slower rate than some might expect. Demand in the fishing, merchant and leisure sectors will continue to support this limited bandwidth technology.[/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

Debunking Misconceptions About Connectivity in The Maritime Industry

When Nautilus International – a global trade union and professional association for seafarers and other crew in the maritime industry – carried out their 2017 investigation into connectivity at sea, major attention was given to the quality of connectivity that crew have onboard.

In an era where connectivity is no longer an expectation but a norm, this survey found that 88% of crew were able to connect to the Internet regularly, which is an improvement for an industry that tends to embrace technology relatively slowly.

Communication anomalies against connectivity onboard

Not only had connectivity made an impact on crew’s attitude towards long-term employment opportunities and social issues, it also redefined human resources retaining policies in accordance with the Maritime Labor Convention adopted in 2006.

Yet, this survey reported some communication anomalies that maritime employers need to address if they are to improve the lives of those who work in remote locations.

Whilst 83% of companies commented that they were concerned that crew may download illegal or adult content, only 16% of crew reported unauthorised content as a main reason for not providing Internet access for personal use.

At a first glance, maritime employers appear to be reluctant to the provision of onboard connectivity for cyber-security reasons, but firms fail to take heed of the growing interest of employees to work on a policy that solves any discrepancy with regards to connectivity for personal use.

As a matter of fact, 84% of respondents said they would be willing to sign an Internet usage policy with their employer if it were to translate into better connectivity while onboard.

Installations and running costs against connectivity onboard

Maritime employees also alluded that service installations and running costs are key reasons why companies deny Internet access for personal use onboard, which cannot be otherwise proven considering that every vessel has different bandwidth and/or communication needs.

While there are several packages and integral alternatives available to maritime companies in the market, debunking cost-related justifications requires valid scenario constructions and estimates, which, to some extent, were abstractly covered by the above-mentioned international survey.

Cognisant of VSAT broadband opportunities, iDirect has introduced, discussed, and analysed typical costs per MB based on C-band, Ku-band, and L-band coverage. By designing a business case for every broadband choice, this study developed a price spread for overall costs depending on usage profiles.

This construct has helped the group to amortise installation costs over fixed periods and put them together with monthly usage charges to conclude that C-band and Ku-band choices are more cost-effective than L-band coverage over the long-term.

From a financial perspective, iDirect argues that making an investment on VSAT technologies over the short-run could be painful, but the return on investment (ROI) over the long term outranks any pay-per-use model today. Yet, when it comes to satellite communications, integration and service adjustments are vital during a loss of service.

To avoid service disruptions, L-band coverage works impressively as a VSAT-backup alternative, which delivers resiliency at its best. For example, Iridium – a global satellite communications provider – is launching Iridium NEXT to create a new constellation of satellites with an upgraded L-band coverage, which is scheduled to be completed by mid-2018.

Distraction against connectivity onboard

Lastly, another critical obstacle to the provision of Internet access for personal use is distraction from work, which also adheres to the sailor’s perception of connectivity onboard, covered by marineinsights.com.

Motivated by the plausibility of connecting seafarers with their loved ones, this article outlined key disadvantages against Internet onboard ships based on behavioural justifications, risks on duty, and unapproved actions.

“Behavioural justifications” refers to reduced socialisation, inappropriate usage times, and social media addiction, whereas “unapproved actions” comprises conflicts and misunderstandings in usage, adult or questionable content, brand-damaging or immoral content, offensive or discrediting posts, and Internet piracy.

Notwithstanding the fact that both behavioural justifications and unapproved actions are side-effects of the investment in connectivity in deep waters, which commonly take place during recess time, “risks on duty” further details the effect that connectivity has upon performance.

Engaged seafarers explained that “risks on duty”, which includes watchkeeping interference, troubleshooting, and other work-related distractions increases the margin of error that certain tasks cannot simply afford.

Again, as it was anteriorly mentioned above, 84% of seafarers are willing to sign an Internet usage policy with their employer if that initiative translates into a better connectivity while onboard. However, when it comes to social interactions, this same survey shows that not speaking the common language makes a stronger impact upon social interaction onboard than crew connectivity.

Fulfilling operational and crew expectations by connecting vessels

Owners and operators cannot afford to underestimate the power of connectivity ever again. Note that maritime companies are facing continuous demands on data-driven applications for strategic decision-making and other operational/safety efficiencies that are pivotal to success.

Similarly, there is a growing emphasis in career progression and training methods that could only be powered by changes in service infrastructure. A new generation of seafarers are breaking the status-quo in the maritime industry, expecting uninterrupted connectivity for professional and personal use regardless of location.

Limiting connectivity today results in competitive disadvantage and stagnation not only for owners and operators but also for the entire industry. For that reason, the maritime industry needs to be reactive to crew demands, take a long-term approach towards crew retention, and start connecting vessels in the most reliable, cost-effective way.

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[fusion_builder_container hundred_percent="no" equal_height_columns="no" menu_anchor="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" background_color="" background_image="" background_position="center center" background_repeat="no-repeat" fade="no" background_parallax="none" parallax_speed="0.3" video_mp4="" video_webm="" video_ogv="" video_url="" video_aspect_ratio="16:9" video_loop="yes" video_mute="yes" overlay_color="" video_preview_image="" border_size="" border_color="" border_style="solid" padding_top="" padding_bottom="" padding_left="" padding_right=""][fusion_builder_row][fusion_builder_column type="1_1" layout="1_1" background_position="left top" background_color="" border_size="" border_color="" border_style="solid" border_position="all" spacing="yes" background_image="" background_repeat="no-repeat" padding_top="" padding_right="" padding_bottom="" padding_left="" margin_top="0px" margin_bottom="0px" class="" id="" animation_type="" animation_speed="0.3" animation_direction="left" hide_on_mobile="small-visibility,medium-visibility,large-visibility" center_content="no" last="no" min_height="" hover_type="none" link=""][fusion_imageframe image_id="4870|full" max_width="" style_type="" blur="" stylecolor="" hover_type="none" bordersize="" bordercolor="" borderradius="" align="center" lightbox="no" gallery_id="" lightbox_image="" lightbox_image_id="" alt="" link="" linktarget="_self" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" animation_type="" animation_direction="left" animation_speed="0.3" animation_offset=""]http://217.199.187.200/valourconsultancy.com/wp-content/uploads/2018/07/Ship.jpg[/fusion_imageframe][fusion_separator style_type="default" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" sep_color="#ffffff" top_margin="20" bottom_margin="20" border_size="" icon="" icon_circle="" icon_circle_color="" width="" alignment="center" /][fusion_text]When Nautilus International – a global trade union and professional association for seafarers and other crew in the maritime industry – carried out their 2017 investigation into connectivity at sea, major attention was given to the quality of connectivity that crew have onboard. In an era where connectivity is no longer an expectation but a norm, this survey found that 88% of crew were able to connect to the Internet regularly, which is an improvement for an industry that tends to embrace technology relatively slowly. Communication anomalies against connectivity onboard Not only had connectivity made an impact on crew’s attitude towards long-term employment opportunities and social issues, it also redefined human resources retaining policies in accordance with the Maritime Labor Convention adopted in 2006. Yet, this survey reported some communication anomalies that maritime employers need to address if they are to improve the lives of those who work in remote locations. Whilst 83% of companies commented that they were concerned that crew may download illegal or adult content, only 16% of crew reported unauthorised content as a main reason for not providing Internet access for personal use. At a first glance, maritime employers appear to be reluctant to the provision of onboard connectivity for cyber-security reasons, but firms fail to take heed of the growing interest of employees to work on a policy that solves any discrepancy with regards to connectivity for personal use. As a matter of fact, 84% of respondents said they would be willing to sign an Internet usage policy with their employer if it were to translate into better connectivity while onboard. Installations and running costs against connectivity onboard Maritime employees also alluded that service installations and running costs are key reasons why companies deny Internet access for personal use onboard, which cannot be otherwise proven considering that every vessel has different bandwidth and/or communication needs. While there are several packages and integral alternatives available to maritime companies in the market, debunking cost-related justifications requires valid scenario constructions and estimates, which, to some extent, were abstractly covered by the above-mentioned international survey. Cognisant of VSAT broadband opportunities, iDirect has introduced, discussed, and analysed typical costs per MB based on C-band, Ku-band, and L-band coverage. By designing a business case for every broadband choice, this study developed a price spread for overall costs depending on usage profiles. This construct has helped the group to amortise installation costs over fixed periods and put them together with monthly usage charges to conclude that C-band and Ku-band choices are more cost-effective than L-band coverage over the long-term. From a financial perspective, iDirect argues that making an investment on VSAT technologies over the short-run could be painful, but the return on investment (ROI) over the long term outranks any pay-per-use model today. Yet, when it comes to satellite communications, integration and service adjustments are vital during a loss of service. To avoid service disruptions, L-band coverage works impressively as a VSAT-backup alternative, which delivers resiliency at its best. For example, Iridium – a global satellite communications provider – is launching Iridium NEXT to create a new constellation of satellites with an upgraded L-band coverage, which is scheduled to be completed by mid-2018. Distraction against connectivity onboard Lastly, another critical obstacle to the provision of Internet access for personal use is distraction from work, which also adheres to the sailor’s perception of connectivity onboard, covered by marineinsights.com. Motivated by the plausibility of connecting seafarers with their loved ones, this article outlined key disadvantages against Internet onboard ships based on behavioural justifications, risks on duty, and unapproved actions. “Behavioural justifications” refers to reduced socialisation, inappropriate usage times, and social media addiction, whereas “unapproved actions” comprises conflicts and misunderstandings in usage, adult or questionable content, brand-damaging or immoral content, offensive or discrediting posts, and Internet piracy. Notwithstanding the fact that both behavioural justifications and unapproved actions are side-effects of the investment in connectivity in deep waters, which commonly take place during recess time, “risks on duty” further details the effect that connectivity has upon performance. Engaged seafarers explained that “risks on duty”, which includes watchkeeping interference, troubleshooting, and other work-related distractions increases the margin of error that certain tasks cannot simply afford. Again, as it was anteriorly mentioned above, 84% of seafarers are willing to sign an Internet usage policy with their employer if that initiative translates into a better connectivity while onboard. However, when it comes to social interactions, this same survey shows that not speaking the common language makes a stronger impact upon social interaction onboard than crew connectivity. Fulfilling operational and crew expectations by connecting vessels Owners and operators cannot afford to underestimate the power of connectivity ever again. Note that maritime companies are facing continuous demands on data-driven applications for strategic decision-making and other operational/safety efficiencies that are pivotal to success. Similarly, there is a growing emphasis in career progression and training methods that could only be powered by changes in service infrastructure. A new generation of seafarers are breaking the status-quo in the maritime industry, expecting uninterrupted connectivity for professional and personal use regardless of location. Limiting connectivity today results in competitive disadvantage and stagnation not only for owners and operators but also for the entire industry. For that reason, the maritime industry needs to be reactive to crew demands, take a long-term approach towards crew retention, and start connecting vessels in the most reliable, cost-effective way.[/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]
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