Looking Out – Advances in Technology in Comparable Markets · 2014. 11. 21. · – Sirion Global...

www.nsr.com © 2014 – NSR

Claude Rousseau Research Director

Looking Out – Advances in Technology in Comparable Markets Communications Drivers and Demand in Maritime Satcom

The Maritime CIO Forum Rotterdam 18 November 2014

www.nsr.com © 2014 – NSR 18 November 2014

The Maritime CIO Forum

Contents

2 The Maritime CIO Forum

About NSR 1. What is Driving Demand ? 2. Mobility a new Design Criteria for Capacity 3. Global Mobility via Satellite Market Overview 4. Aeronautical Market 5. Land-Mobile Market 6. Maritime Market Bottom Line


About NSR NSR is a Global Leader in Satellite Market Research and Consulting

Founded in 2000, NSR specializes in analysis of growth opportunities across the satellite industry

NSR’s expert consultants are located globally and possess over 140 years of combined

industry experience.

Multi-Client Reports on Various Satellite Topics

Extensive Client Research, Consulting and Advisory Services

“Holistic” approach to research enables NSR to anticipate trends with a higher degree of confidence and precision than the competition and stay ahead of the curve.

3 18 November 2014

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The Maritime CIO Forum www.nsr.com © 2014 - NSR



1. What is Driving Demand - On the Ground?


Ground Wireless Networks Traffic Boom

What role for satellite? Data traffic on wireless networks growth very intense in very short time. Satellite = enabler of

connectivity for market expansion in underserved regions, rural areas and for remote locations

Ground-based operators unable to address all traffic and need satellite to help ‘unclog’ jammed networks and reach outside their footprint



1. What is Driving Demand - On the Ground?


Mobile phone and smartphones are dominant communications tools in the private and professional sphere

Voice is still required and will not go away

Far from wireless and wired networks, users will still want/require connectivity

Therefore, platforms like ships, aircrafts and land vehicles will see their bandwidth levels increasingly become a need rather than a wish to support all form factors for business and pleasure Bring-your-own device (BYOD)

is they main driver today and the not-too-distant future

Data traffic is likely to explode in

underserved and remote areas and on mobile platforms in land, air and

at sea.



1. What is Driving Demand - Across Platforms?


Aeronautical Commercial air passenger thirst for connectivity and bandwidth – Airlines catching the “Me-Too”

syndrome – Providers in “Land Grab” – Equipment price erosion

Maritime Ships with more electronics than ever:

– ECDIS combined with on-board sensors to improve ship operations

– GMDSS to remain mandated req. – VMS for fishing as a gateway to offer

more satcom service to smaller ships Communications for passenger and

crew are here to stay

Many similar patterns found across all satellite mobility platforms



1. What is Driving Demand - Across Platforms?


L-Band

Ku-Band

C-band HTS

Satellite FSS/MSS Trends Mirror Terrestrial Connectivity



1. What is Driving Demand – The Supply Answer?


High Throughput Satellites (HTS) – A Supply Answer to Demand

Traditional

Traditional FSS provide large hemi- or regional beams without frequency re-use

or multiple spot beams

HTS HTS almost exclusively make use of

frequency re-use + multiple spot beams

– Why: Higher throughput, more spectrum available, smaller equipment, lower cost-per-bit – Main applications: Consumer broadband access and enterprise data services but

increasingly, mobility. – Examples: Intelsat EPIC, Inmarsat Global Xpress, Thor-7, O3b Networks, Viasat-2, etc…



2. Mobility a new Design Criteria for Capacity


Maritime Aero Land

Is Aero the “next big vertical

market”?

When can we move to true broadband?

Is there still growth left in

this legacy market?



2. Mobility a new Design Criteria for Capacity?


64+ Gbps for commercial demand in HTS from 2014 till 2023, little wonder satellite operators are taking a hard look at HTS mobility…

L-Band loss: 16.5%

Ku/HTS gains: 20%

C-band loss: 3.5%





Lots of Supply in the Sky

Iridium • Pilot • M2M

Inmarsat • Legacy • Fleet

Broadband

Thuraya • Orion IP • Maritime BB

L-Band More beams

dedicated to Ocean regions

Managed services

Ku-Band Wide Use

over Ocean regions

Global coverage

C-Band

Now Available

Inmarsat Global Xpress Global Service Ka-band

Intelsat EPIC 3 satellites Ku-band HTS

O3b Networks Cruise ships, Offshore, air carriers Ka-Band

Telenor Thor-7 EU, North Sea Ka-band

Coming Soon!





Back to the Future! More Constellations More of it and all with higher capacity, longer life and multi-mode capabilities

– Globalstar: 24 new satellites in orbit with an end-of-life in 2027 with possibility to increase number of satellites thus coverage and redundancy – New chipset will multi-mode that will cost less

– Iridium : NEXT constellation with 81 satellites (incl. 9 ground spares) in 2015 – 2017 period with an end-of-life in 2028-2030. Up to 1.5 mbps down to selected users

– OrbComm: NG2 constellation of 17 satellites and 5+ years lifetime – Sirion Global Pty: MEO constellation of 10 satellites with S-band payload for machine-to-

machine service, planned for 2016. – O3bNetworks: Medium Earth Orbit constellation of 12 satellites delivering 750 Mbps to

single user. Could expand to 24 satellites – WorldVu: Low Earth Orbit Ku-band constellation of up to 720 satellites!!!

Source: Iridium Source: Globalstar Source: O3b Networks Source: OrbComm



3. Global Mobility via Satellite Market Overview - Platform

Maritime : +7%

Land-Mobile: -7%

Aeronautical :+1%

Units and Revenues Most units in-service in land-mobile

platform market – More than 72% throughout forecast period

but dropping towards end as FSS/HTS gains in other two platforms

Revenues gain highest in Maritime – Strong offshore oil and gas and merchant marine

market segments – Aero revenue growth led by HTS narrow-body

market




3. Global Mobility via Satellite Market Overview - Capacity Demand

FSS and HTS Capacity It is clear that the mix will increase in terms

of frequency band across the board – FSS demand tops 300 TPEs while GEO-/MEO

HTS skyrockets to 64 Gbps of demand, driving a ten-fold capacity revenue growth

C-band still grows but loses share of the market as the story is HTS generating 50% of capacity revenues by the end of 2023 in large part due to narrow-body aircraft, offshore and passenger vessels.




4. Aeronautical Market Overview

• Business jets together with general aviation are the largest satcom addressable market under study with 60% of the aircraft total.

• Wide-body and narrow-body market today are the main target of the growing demand for broadband connectivity as both Boeing and Airbus have raised their new planes forecast

• Each addressable market represent very different value propositions for the satellite industry.




4. Aeronautical Market Overview – Why Wi-Fi?


Daily Air Traffic in Europe

We are seeing here more of this



4. Aeronautical Market Overview – Antenna Talk


New Types of Antenna to Impact SWaP and Cost Phased array or electronically–steered antennas

– Offer smaller and lighter antennas that result in less drag on airplanes and save on weight

Kymeta stated intent to roll-out their meta-materials antenna (Ka-band) in Q1 2015 – Agreements with Inmarsat for roll-out on business jets in late 2014 – High production rate in Q3 2017 but admitted testing over Global Xpress

delayed. – Will also demonstrate their maritime antenna on O3b Networks in Q3 2014

and said they will target fixed and land-mobile equipment as well Source: Phasor Solutions

Source: Kymeta

Phasor Solutions had a test in 2013 with multi-megabits per second with their flat panel antenna – Indicated readiness to deploy a Ku-band antenna in 2014.

Yet, amidst all these interesting development, over 1,200 Ku- or Ka-band antennas are flying today and

this, after many years of delays. Question is : Will the low-profile products give them high-profile and leapfrog current ones?



4. Aeronautical Market Overview – Antenna Cost


In the meantime, most commercial-grade systems costs have come down in price – Airlines are less shy to equip entire fleets as prices have kept declining

over the last five to ten years… Still, aeronautical Ku-band equipment is pricey

– NSR data shows a decrease of over 50% in the last ten years on equipment pricing and a further 24% is expected over the next decade

Fleets are now considered instead of just the most profitable routes. Why? Major differentiator and lower total cost of ownership (TCO)



4. Aeronautical Market Overview - Forecasts


Aeronautical Market As BYOD trends take hold in the aircraft market, growth of satellite

services to address this market is growing. Additionally, passengers and crew needs for bandwidth and improvements sought in operational efficiencies help tap this growth market – Wide-body markets are the top-end, high-bandwidth market for

commercial airlines and will generate $977 million by the end of 2023.

– Narrow-body is the key market to address for inflight connectivity and will demand a lot of attention with 62 TPEs of FSS capacity and 28 Gbps of HTS capacity demand.

– Business Jets and General Aviation will continue to see growth in connectivity needs with the largest installed base of L-band units and a high potential for HTS capacity in larger corporate and VIP business jets.



5. Land-Mobile – Factoring in Forms

Multiple Formats MSS satellite phones and data services has

become key to many vertical markets and will continue to see demand globally due to absence of terrestrial networks

However, encroachment from 3G and 4G network is growing and higher price points of satellite solutions will lead to single-digit annual growth rate for markets such as satellite handhelds and certain data services. – In this context, operators are seeing pricing

affected and to keep margins, are developing many more B2B and B2C solutions to expand portfolio and grow market share.

– Integration with terrestrial network is a key driver but many new products have targeted consumer markets (SatSleeve, SPOT Trace, InReach).

– New dual-mode chipset or ‘modules’ will become enablers for greater integration into new vertical market products or offer dual wireless/satellite mode with more form factor for consumer and enterprise markets

Exhibit 1.33 Sample of Recently Released B2B and B2C MSS Equipment




5. Land-Mobile – Addressable Market & Forecast


Land-Mobile Market The push started a few years ago in the MSS space to reach into

the consumer market and it is continuing with BYOD trends in full swing on the land-mobile side of the business. The players are actively developing better B2B and B2C solutions to expand the pie and grow market share with many new products targeted to consumer markets (SatSleeve, SPOT Trace, InReach). – Handhelds are on a stable low single-digit path – Fixed Voice/Push-to-Talk will also see low growth due to demand

moving to hotspot devices and consumer handheld. – Consumer Handheld/Sat-Sleeve will offer huge growth in equipment

but lower revenues compared to traditional ones – Comms-on-the-pause (COTP) continue to surf on broadband and

generate the most revenues on this platform market – Hotspot Devices offer a much-needed boost of capabilities



6. Maritime Market – What is Driving Demand?


The need for more applications requiring more bandwidth for crew AND passengers

Operations

VoIP

VPN

Database Replication

Real-time

Video

E-mail

ERP

Entertainment

Voice

BYOD

Wi-Fi and/or

Cellular

Movies & Entertain.

Social Media

E mail


6. Maritime Market – by Vessel Segment

Addressable Markets Driving Growth? Fishing and Passenger vessels show best signs of growth from

improved economic conditions.

Ongoing new-building campaign in the Offshore sector – both larger more sophisticated drilling platforms (semi-submersible, jack-ups, etc.) and trending towards larger OSVs. The ‘sweet spot’ for OSVs are vessel sizes in the 500 – 25,000 GTs, with a growing market above 60,000 GTs.

In general, due to the large number of small fishing and leisure vessels, <500 GTs is the larger market, creating a significant market for smaller, lighter easier to integrate maritime stabilized antennas.

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Maritime Satcom Addressable Markets by Vertical

18 November 2014 The Maritime CIO Forum


6. Maritime Market - Merchant

Merchant Overall, largest market for SATCOM services with over $3.3B

in retail revenues by 2023. With a growing need to track, control, monitor, and connect – the

merchant market will play a key role for maritime SATCOM services: – Containerized cargo fleet will remain the largest segment of the

addressable market, and requires both broadband connectivity for crew/business and narrowband communications for M2M.

– More focus to Asia as global economic activity shifts into the Pacific.

– A lot of units require a lot of bandwidth…but ‘best effort’ is usually good enough for most end-users.


Global Merchant Maritime Satcom Market



6. Maritime Market - Passenger

Passenger A growing addressable market, but highly price sensitive even at the top.. With a clear need for bandwidth but willing to be innovative to meet requirements: Leisure market shows best growth options – but, a highly

fragmented market outside of the largest of yachts. Strong growth across globe, but Asia stands out as individual

wealth increases, cruise industry develops, and ferry market continues to expand.

Demand for bandwidth, but concentrated in a few regions so could be met with some terrestrial capacity.

Almost $1 Billion by 2023 – but shows the best CAGR from 2013 – 2023.


Global Passenger Vessels Market



6. Maritime Market - Offshore (Oil & Gas)

Offshore Increased need for petroleum and a focus towards deeper waters and green-field opportunities continues to expand market:

Offshore Support Vessels are moving towards larger, more flexible vessel configurations which can support ROV operations.

More activity moving into Asia to quantify opportunity, develop exploratory wells, and move into production… regardless of political issues.

FSS C-band lives on here – for now. With slow movements towards FSS Ku-band and HTS-based offerings by 2018 onwards.

Double-Digits CAGR from 2013 – 2023, more than $1 Billion in retail revenues from 50,000 In-service Units by 2023.


Global Offshore (Oil & Gas) Market



6. Maritime Market - Fishing

Fishing Not a bandwidth market – but still room for more SATCOM services:

Largest addressable market… an estimated 4.5 million vessels engaged in fishing, with only 250,000 having a ‘clear need’ for SATCOM.

Europe and Asia lead but a strong global market for In-service Units exists, assuming they are narrowband.

No need for bandwidth…yet. 2019 is a turning point when younger generation is expected to take more leadership positions and begin leveraging more communications infrastructure… and take a selfie.

Less than $150 million by 2023…a narrowband play.


Global Fishing Market



6. Maritime Market - Is it a Legacy Market?…

Maritime Market With growth stabilizing from economic recession – more focus is

on improving operational efficiencies, providing crew comfort, and expanding markets – Merchant Maritime is the key market for maritime SATCOM

services, with over $3.3B in revenues by 2023. – More devices in more places, and more money for gas. The

passenger market will require more than 36 TPEs of FSS capacity.

– Offshore continues to shine – leading bandwidth demand and some of the strongest ARPU rates in the maritime market… from less than 50,000 In-service Units.

– Still not a strong need for bandwidth in Fishing… a narrowband play with an 89% share of the fishing market.




Bottom Line - Issues to Consider The Maritime CIO Forum


Issues to Consider Consolidation trend in maritime market to continue Increased competition within satellite sectors but also from microwave, 4G and

other non-satellite solutions – Trends are very similar across both ground-based and mobile (maritime)

connectivity users Pricing of L-band (pay-as-you-go) vs Ku-band and HTS (monthly flat fees)

– Redundancy or Reliability vs Speed – Competition in regulated services: Can safety rely only on one system?

Will antenna technology help raise adoption of high bandwidth systems? Crew comfort and connectivity: Xmas wishlist or modern seafarer’s necessity?

– Can MLC 2006 deliver? – More electronics on deck = happy passengers and crew?

Can lower pricing, smaller terminals, enable more bandwidth and better service/availability, and allow for more flexible plans for both maritime operational and crew requirements?



Bottom Line – All Devices Aboard

Addressable Maritime Markets Growing? Fishing and Passenger vessels show signs of

growth from improved economic conditions. Then, new-building campaign in the Offshore sector continue and the large number of small fishing and leisure vessels is creating a significant market for smaller, lighter easier to integrate maritime stabilized antennas.

Air Passengers Traffic Growing? • 2013 was a hugely successful year for

airplane manufacturing across all major aircraft producers. Boeing had record deliveries while Airbus had record orders. In the same vein, worldwide air passenger traffic is expected to grow at annual average rate of 5.9% and 6.3% in 2014 and 2015 respectively. ATG plans by AT&T were announced, and several HTS satellites are in 2014/2015 with Inmarsat , Intelsat and O3b.

BYOD Trend Growing? More personal devices in the home, at work, in

the field and during transit is driving connectivity needs beyond projected bandwidth needs for wireless networks. More consumer-oriented solutions needed to keep people and workers connected.

The underlying trends, addressable markets and statistics on mobility needs point to growth for all platforms that commercial mobile satellites serve



Questions?

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Looking Out – Advances in Technology in Comparable Markets · 2014. 11. 21. · – Sirion Global...

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Transcript of Looking Out – Advances in Technology in Comparable Markets · 2014. 11. 21. · – Sirion Global...