The pace of change within the maritime satellite sector has seemed especially frenetic during the past couple of years, but only because seaborne platform communications networks have had a lot of catching up to do with their counterparts on land. The maritime sector has shifted from being more or less content with narrow-band channels for its distress and operational systems and simple voice, fax and data communications, to being increasingly absorbed by the next not-so-new thing: the prospect of cheap and plentiful high-speed broadband.

Technology and supply are clearly driving the ferment. Forever in search of new markets, satellite operators, equipment manufacturers and service providers have begun to chart waters that once lay undisturbed in a self-contained marine communications ecosystem.

Diving in the Deep

Intelsat wants to lead the FSS industry’s dive into the blue water. Although the former treaty organization has long provided services to the maritime industry with its global C-band beams, Jay Yass, Intelsat’s vice president of global accounts and strategic sales, says a major enhancement of their mobile capabilities was a logical evolution for their next-generation satellites.

“In about 2009, our customers started to say, ‘we see the demand for broadband growing even more than your mobility fabric is going to be able to fulfill,’” says Yass. “We said, what can we do next to provide more performance, more throughput, higher availability?”

The answer, according to Yass, will come in the form a Ku-band platform slated to begin operating in 2015, that will use dedicated spot beams on seven satellites — some already in orbit and others yet to launch — to create a truly global, high throughput overlay to their existing oceanic capacity.

Telenor Satellite Broadcasting (TSB) signaled its own plans to address the maritime broadband market in February, when it announced that its upcoming Thor 7 satellite would include a Ka-band payload dedicated to shipping lanes in the North Atlantic and the Baltic Sea when it is launched in 2013.

O3b Networks also is aiming to make a Ka-band splash in the maritime business after it launches the first of its eight MEO satellites in early 2013. Steerable beams on its spacecraft will track individual ships, keeping the vessels within beam center for the duration of their voyages. O3b recently inked a deal with service partner Harris CapRock to provide onboard broadband to Royal Caribbean’s Oasis of the Seas cruise ship beginning in 2013.

Steve Collar, CEO, O3b, thinks there is a great opportunity for the company in the maritime vertical. “If you take the cruise industry, huge investment is made to provide guests the very best cruise experience possible from food to excursions, from cabins to facilities and services, but until now it has not extended to include connectivity. This can turn a positive cruise experience into a negative one as, increasingly, we all expect to be connected everywhere as if we are at home or in the office.”

A Sea Change?

Iridium has experienced double-digit, year-over-year growth in its maritime broadband revenue and subscriber growth and is on track to launch its Iridium NEXT system in 2015. The satellite constellation is the company’s following act to its current network of LEO L-band satellites. Advances in their payloads are expected to dramatically improve throughput and performance, while enabling the use of smaller, non-stabilized on-board antennas. In addition, the Iridium NEXT satellites will be capable of providing polar region coverage — a key advantage the company hopes to exploit, as sea routes once closed off by ice open up to traffic.

Iridium’s competitors, however, do not plan on staying out of the way. Inmarsat made its own waves by announcing its plans to launch a new series of Ka-band spacecraft in the 2013­2014 timeframe. Labeled Global Xpress, the new satellites and platform will serve as the company’s front guard, designed to protect and grow the significant territory that the MSS operator, which has traditionally provided services in L-band, want to protect against a slew of VSAT invaders.

“There are a lot of discussions in the press and throughout the market whether Inmarsat will continue to lead, given the fact that others are also investing in (maritime) satellite services,” says Frank Coles, president of Inmarsat’s maritime division. “But our brand, reliability, neighborhood and capabilities are world renowned and trusted.”

The three satellites currently slated to comprise the Global Xpress platform will be built by Boeing on the Inmarsat 5 bus and will be capable of delivering up to 50 Mbps per second downlink speeds to antennas as small as 60 centimeters. The company expects to realize $500 million in revenue from the service within five years of launch.

Inmarsat’s actions are causing a stir not just because of the dramatic planned shift in technology, but also because the company has raised suspicions among its distribution partners through acquisitions of service providers like Stratos, Ship Equip and New Wave Broadband. Imarsat’s migration toward a more vertically integrated business structure may help bypass indirect sales channels and enable the company to aggressively and directly market services to end-users. Until now, Inmarsat’s distribution partners have largely been responsible for reselling the operator’s capacity as part of their turnkey solutions.

“We don’t have the intent of breaking up the distribution chain,” Coles says. “The cost and extent of the organization we would have to put in place if we tried to go direct across the world doesn’t make any sense for us to do.”

The resonating issue is that Inmarsat’s traditional distribution partners are suddenly awash with choice. This could mean that the age of a single satellite player dominating the maritime industry is coming to an end. Simon Bull, senior consultant at Comsys, believes that market share will be determined at the service provider layer. “Anyone who thinks the market ultimately will go to one kind of solution is wrong,” he says.

Indeed, manufacturers, system integrators and service providers have been nudging the maritime industry to embrace alternatives for years. During the past five years, the satellite industry has witnessed the introduction of a dizzying number of new product innovations and introductions — from antennas and modems to payloads and entire satellite systems. Seafaring companies, however, have been notoriously averse to spending for communications. Whether or not this was the result of their conditioning to high per megabit rates in the past, is open to debate. Jim Dodez, senior vice president of marketing and strategic planning at KvH Industries, an equipment manufacturer and systems integrator, says the reluctance is probably a bit more due to a historically independent streak among maritime enterprises.

“I don’t see it as a lack of understanding on their part of what to do with the communications,” Dodez says. “I think it’s a return on investment type thing, where they looked at the cost of communications in the past and said, ‘for this megabyte of data that costs me $20 to transmit on Inmarsat’s Fleet service, it’s just not worth it to use it for these particular applications.’”

The tide on customers’ willingness to buy seems to have turned during the past couple of years, as VSAT alternatives in a host of configurations and price ranges have proliferated and the installed base has grown. KVH and ViaSat, for example, were able to repurpose the technology and SES satellite capacity developed for the short-lived Connexions by Boeing Internet in-the-air initiative to create a low-cost product for the maritime space.

KVH has been particularly keen to erode Inmarsat’s traditional customer base by offering its Mini VSAT Broadband product to Inmarsat distribution partners that want to diversify their portfolios, says Dodez. To date, KVH has an installed base of about 2,500 vessels using the Mini VSAT service in the field.

An Epic Fleet Battle

With so many technical solutions and billion dollar maritime-related satellite projects coming online within the next two years, satellite operators have been keen to woo both direct and indirect customers to their sphere of influence as early as possible. There has been a frenzy of alignments and re-alignments among operators and service providers in the last few months.

“There are the beginnings of an epic struggle between satellite operators,” comments Bull, adding that partners and customers will drift from one side to another as a result. “In a match that nearly every move is a potential game changer, it’s anyone’s guess who the ultimate winner will be.”

As with other industries, early momentum often translates into longer-term success. However, a head start in captured market share is particularly important in the maritime satellite sector given the complexities of the installations and support systems involved.

To this end, Intelsat has been busy signing new deals with service providers for its EpicNG platform, far ahead of operational launch. Yass sees Intelsat’s evolutionary Ku-band strategy as a key strength of the company’s offering.

“We are a broad communications provider across media, government and cellular backhaul, so we don’t want to have a very narrow type of high-performance satellite, which could be very limited if that trend stops,” comments Yass. “Unlike some of our competition, we don’t like to do the one-offs. We like to do something that is very broad, but very high-performance.”

Inmarsat faces a triple challenge as the company continues to nurture its existing distribution partners on its L-band capacity, even while it aims to grow its own service business and evangelize its coming Ka-band platform. Coles says that more than 80 percent of the company’s business is still done indirect, and its acquisition of VSAT service provider Ship Equip brought 1,100 existing new customers into the fold, who will be switched to Global Xpress when the platform is operational.

Even with so many boats in the water, Coles remains sanguine regarding Inmarsat’s ability to lead in maritime, precisely because of the combination of the company’s long history within the sector, its deep ties with its channel partners and its bold initiatives for the future.

“We have subject matter expertise … we know the industry,” Coles says. “Let’s think about why these larger guys are coming into maritime; they’re not actually coming in because they have any claimed expertise in the maritime industry. They’re coming here because they’ve already built capacity … if there was the demand ashore, they would turn their focus back to where it’s more highly profitable and less consumer focused.”

In the end, what the larger entities do may matter less than the fact that the first global industry finally seems ready to go forth into the open waters of next-generation communications technologies and competition. O3b’s recent deal with Harris CapRock and Royal Caribbean, and the willingness of smaller operators like Iridium and Telenor to launch new platforms shows that organizational size and frequency bands may matter less in the future than services and applications.

“This is an incredibly exciting market as it stands. Almost on every single front, something is changing to a massive degree. It wasn’t so long ago that the entire industry relied on only one antenna manufacturer,” says Bull before listing a dozen companies that now supply antennas to a growing list of new operators. “There are a lot of alternatives out there.”