Managing the data shipboard load and creating low/high end opportunities

In the first part of my interview with Roger Adamson, the Stark Moore McMillan ceo laid out some of the issues that face the bandwidth vendors in 2013 and beyond. In the second part we discuss how owners and managers are adapting to the changing landscape of systems and services.

Among the issues discussed are how companies cope with the data flow that will increasingly come off the ship, whether there are opportunities at the ‘low end’ of the market for GSM services and what can we expect in the near term, especially from Inmarsat and the introduction of Global Xpress.

MI: We were talking before about the trend towards more data being available ‘off the ship’ and you mentioned that optimisation is an engrained requirement in shipping. Does that mean that either large amounts of data are not actually needed or that the optimisation means that volumes will never hit the gold rush levels we are hearing about? It seems to me that in many cases, shipmanagers can actually function perfectly well with a hundred megabits a month or less. If they organise well enough, they probably don’t need a huge amount so I’m not sure whether again it bears the VSAT argument out?

RA: “In some of the research we’ve done, around 70-100MB a month was average for a FleetBroadband user and around about 10-20Gb was average for a VSAT user.  That 70-100MB is primarily operational data. But once you start going up into the gigabyte level then you’re probably talking only 10 or 20% of that being operational traffic, it’s a few gigabytes, and could be a lot less.

“The rest is taken up with crew access: browsing and a lot of people using things like Skype which is incredibly bandwidth inefficient but they’re using it because they think it’s free. They’re using it over a data circuit but it is just totally inefficient, so it’s chewing up bandwidth and distorting the figures.”

MI: Is there an issue too with the data collected and transmitted? High bandwidth promises more throughput and increased reporting but where does the data go and who uses it?

RA: “What vendors are basically saying is we’ll give you a big high bandwidth pipe and you can send all kinds of data from ship to shore. The trouble is you’ve got two or three people that are looking after each ship, or a fleet or a number of ships and these guys don’t have the bandwidth to be able to look at the data, interpret it or make decisions on it.

“A few people that I’ve heard from and spoken with are saying it’s great, it’s fantastic all this data coming back, but we just don’t have the time to look at it, what do we do with this stuff? They are busy trying to just manage the ships without getting into building the efficiency themselves and I don’t think there are that many ship operators with the level of staff that can make those decisions.”

MI: Looking at maritime satcoms from the other end of the telescope, there seems to be renewed interest in GSM and wireless services. Could pressure on the middle come the other way and give owners or operators at the low end an option so that they don’t need to kind of upgrade to higher bandwidth satellite?

“A few operators that I’ve talked to are using GSM services primarily in short sea trades and for container operators on liner routes, who know that they’re going to be within 3G coverage will work in certain places. We are starting to see some like European wide SIM cards where there’s one flat rate across Europe now.

“The problem if you like with GSM is making the business model work with a crew of 15 or 20 people. The concept is great, because people would rather be able to sit in their cabin and use their mobile phones, but getting the kit on board can create another administrative burden for shipowners and managers.

“Also the dynamics have changed. In the Philippines and in Northern Europe as well, users are moving away from SMS traffic in favour of social media and instant messaging. The previous business models were focussed not so much on voice but on SMS because the profit margin was better.”

MI: OK, looking into your crystal ball it would be interesting to know what you think are the trends that we should be looking out for in 2013. Aside from the consolidation and changing the sales focus, are there other major trends that you perceive in the market over the next couple of years?

“It’s an interesting time at the moment seeing Inmarsat try to go direct and go via the channel. It’s quite a juggling act and I think there will always be distributors who will get them into places in the market that would be very difficult for themselves to get to directly, because of the existing relationships.

“Certainly the danger is that you hack off your loyal distributors, or that they don’t have the margins they need in order to make it a profitable business to stay in so don’t put the same level of resource behind it as they once did.

“That said, the way Global Xpress looks, I can see them having a lot of success in the same way as they’ve had with FleetBroadband. Some 32,000 FB terminals in, let’s say, five years on the market and VSAT has been around since the mid to late 1990s and we’re up to 11-12,000 installations, it’s clear what works.

MI: What about the simple versus complex argument. I think users are beginning to grasp that buying GX won’t be the same as buying Fleet or Fleetbroadband?

RA: “Yes, what led people to buy Inmarsat equipment in the last few years was the simplicity and the understanding of the network. VSAT is more complex, with far more variables: which antenna do I have, what levels of coverage do I have, the key thing is the network operator or there could be four or five network operators that we’ve knitted together a patchwork.

“The model has been simple for people to understand and if that stays there, then GX will be quite difficult to match. We’ve seen that with the EPIC NG offering, which comes back to conditioning for the market and who you’re selling to but if you’re a ship owner or an operator what is EPIC?

“The Inmarsat model means one network, a smaller number of manufacturers and below deck and the above deck equipment in the one package.  If they replicate that model and putting aside rain fade and Ka/Ku band issues, if they get the business model right then I can see that it is path of least resistance for VSAT going forward.”