Quietly Tucked Away
What seems unspoken is how prevalent cellular connectivity has become in maritime connectivity. The industry, and Valour Consultancy too, have focused on satellite connectivity, be it new LEO constellations, GEO, MEO VSAT, or MSS.
However, cellular connectivity on vessels is almost just as omnipresent as satellite’s GEO VSAT.
Let us delve a little bit deeper.
Beginnings
Reading through some presentation decks recently, our maritime analyst, Joshua Flood, reviewed Poynting, the South African cellular antenna manufacturer. They have been focusing on 4/5G maritime antennas for over eight years now, with tens of thousands of antennas sold for this particular market.
The leisure market – particularly yachts – generated early interest, but now the company also sells to all commercial maritime verticals.
Speaking to John Hoeven, a spokesperson at Poynting, he highlighted how its solutions have developed over the years.
One of the most interesting aspects of the maritime cellular market is the hardware ecosystem. As we understand, Poynting dominates the cellular antenna market. Peplink, previously a router maker, has also started manufacturing and selling maritime cellular antennas.
In addition, it is safe to assume that another portion of cellular-equipped vessels are using proprietary systems from the maritime service providers themselves. The cellular router market is dominated by Peplink, Cradlepoint, and a selection of the maritime service provider’s own solutions.
Hardware
Examining Poynting in further detail, its mantra has been on producing high-quality antennas which are essential to achieve the furthest from shore, stable connectivity connection.
As such, the company segments its product line into three categories:
• Smaller, all-in-one antennas for as an entry-point solution, where the MIMO-4 and MIMO-3 can be highlighted.
• The more traditional “stick” antennas; namely the 900 and 400 series, where the OMNI-402 has been the industry standard for many years so far.
• Newer models of cellular dome antennas, such as its WaveHunter and the RIPPLE. These product ranges contain both long and short-range ship-to-shore links, multiple 5G routers, and a host of different connectivity technologies.
Hardware solutions cost, Addressability by Vertical
It is easy to make some lazy analysis and assume that the leisure market consists of single boat owners purchasing a router and a couple of antennas for roughly €400 to €500. Then add a few sim card deals from one, or a small array, of mobile operators ,and a ship can be up and running whilst connected by cellular services.
The level of sophistication of cellular deployments is much more advanced than that, and some of the more advanced hardware solutions range between €20,000 to €30,000 per vessel.
Service providers and others
One would assume the typical maritime service providers such as Marlink, Speedcast, KVH, NSSLGlobal, and Castor Marine would dominate all the cellular contracts. This would be incorrect.
A number of companies will purchase their connectivity service direct to a specific telecom company. In the case of Seaspan (its tug division) all the vessels have connectivity sims with the Canadian telecom company, Telus. The pool deal covering all its fleet costs roughly $10,000 Canadian and equates to 2TB of monthly data. The challenge is when one of the tugs strays into American waters and cellular airspace, which can cause bills to hike up quickly.
Cellular packages of unlimited data and voice at sea seem to have stopped, some industry peers believe.
Comparing prices between North America and Europe, Northern European shipping companies typically purchase a data pool package type, which is shared across their fleet. This is similar to Seaspan but a package for 10TB is roughly €7,500 per month, which is far less than the US.
In the midst of this are cellular specialists who package multiplied mobile telcos into attractive packages. Fascinatingly, one interviewee highlighted that the maritime cellular industry can be segmented into three types of people: cowboys, naive resellers, and those in the know. Make sure you pick the latter.
The main telecom providers are Vodafone, AT&T, Three, T-Mobile, KPN, TIM, Orange, Cosmote, EE – BT Global, and a plethora of others depending on the region/country.
As of the middle of 2023
Leisure
Valour Consultancy estimates that the leisure market contains the highest concentration of cellular-connected vessels. Granted, some of these vessels will not be connected on active subscriptions all year around, but we believe around 20,000 yachts and leisure boats have cellular equipment onboard. This is approximately almost four times more than the satellite VSAT market.
Companies like MIMO Connect, Omniaccess (owned by Marlink Group), E3 Systems (owned by Group Arbulo), and others are strong players in the marketplace.
Merchant
One would assume if many commercial merchant shipping vessels are traversing deep ocean waters, the need for cellular service would be minimal. Nevertheless, merchant vessels spend much time in ports and chugging along various coastlines worldwide.
It would be ill-advised, not monetary astute, to prioritise the use of VSAT in ports. It is also a nightmarish experience with the limited bandwidth available on L-band in a busy port. We estimate that 40% of the 30,000 merchant VSAT vessel fleet will have cellular connectivity. As more maritime service providers look to integrate cellular services as part of a hybrid service portfolio, the number of cellular-equipped vessels will expand rapidly.
For example, Inmarsat Maritime (now owned by Viasat), will include Fleet Reach as part of its ORCHESTRA service to all its FX customers. This essentially means potentially cellular-connected vessels could grow by 15,000 FX vessels over the next 1-2 years, depending on if those vessels have cellular connectivity already. In addition, KVH, Marlink, and Speedcast are all actively selling hybrid connectivity services to its large merchant customer base.
Offshore Energy
Tampnet, a Norwegian headquartered connectivity specialist, holds a solid position in the offshore market; particularly the North Sea and the Gulf of Mexico. It is the only specialist provider able to offer a very bespoke solution, as each area has cellular base stations across the region at sea which enables it to provide cellular connectivity speeds, far away from the Northern European coastlines or United States and Mexican landmass.
However, offshore energy is far bigger than those regions with notable areas in South America, the Middle East, Asia, and areas in the Pacific. Nearshore Networks (US) / Kjaer Data (DK) and Know-IT (IT) are examples of pioneers of incorporating hybrid and bespoke cellular solutions for their customers, particularly using cellular connectivity.
Valour Consultancy estimates that 2,000 offshore energy vessels are equipped with cellular technologies; approximately 65% of the total VSAT offshore vessel market.
Passenger
For the bigger ocean cruise vessels, the song by Depeche Mode, “We just can’t get enough” is aptly true. The top +300 big cruise vessels will have
multiple 2.4-metre VSAT antennas, MSS connectivity, a lot with radio-link, and cellular connectivity. We believe nearly 80% of passenger vessels with satellite connectivity will have cellular connectivity, equating to approximately 2,000 vessels globally. This vertical will be particularly interested in the deployment and use of 5G technology.
Fishing
The marketplace is highly fragmented, but undoubtedly has the largest number of addressable vessels. These vessels can be extremely cost-sensitive, and only a small portion, specifically the bigger fishing vessels, have VSAT connectivity. Vessels out at sea longer than a week will have a VSAT system. Nevertheless, we believe a good portion of the connectivity will be via fishermen purchasing different mobile sim connectivity packages from various providers.
Impact of 5G
Why is cellular service becoming more prevalent?
One key element of this is the impact of 5G technology. The highspeed connectivity could open vessels to aggregated speeds of 500+ Mbps. This factor is 10 times faster than LTE, and likely a factor of 2-3 times greater than LEO services offered in the maritime realm.
One critical differentiating point between 5G and, say LEO VSAT service, is the highspeed of 5G technology in ports. For satellite services, high concentration of vessels in a port utilising the same spot beam from a satellite or group of satellites will cause significant congestion and, thus a much slower service. 5G potentially negates this issue.
Ultimately, such speedy connectivity hopes to enable real-time, accurate information. This could encompass many potential applications. This could aid logistical information from a vessel, crew, or passengers.
Please note our addressable market for cellular equipped vessels is from preliminary data and may change with the release of our full report. Valour Consultancy will publish a new report on cellular technologies and 5G in the maritime market soon – for more information, please click here.
