Owners speak – and you might not like everything they have to say

I was commissioned out of the blue earlier this year to write an article for Via Satellite magazine. I was flattered to be asked frankly – time for writing is a rare luxury these days – hence the lack of updates here recently.

The one thing the editor was clear on was that I couldn’t speak to any airtime providers – or at least couldn’t include any of their comments in the article. The piece had to be purely on the developments in the market and how owners and managers were responding.

What I found was largely what I expected – a movement towards Ku-band VSAT among the higher end owners and a period of adjustment elsewhere as buyers transition off older and increasingly expensive L-band systems and onto lower per MB packages as a positional move ahead of HTS systems becoming available within the next few years.

There is some mixing and matching of systems going on, based on areas of operation and there is the usual trade-off between the coverage and higher bandwidth models. The more specialist the operator of course, the more focussed the usage, with ferry operator Stena Rederi using hybrid services to cover crew, passenger and business use. It also has a service agreement that effectively transfers a lot of the performance risk onto its provider, but Stena says the relationship has prospered as a result.

For the tanker owners such as Laurin Maritime, crew usage is unsurprisingly cited as the primary driver for VSAT contracts and business use remains a secondary consideration for the most part.

What they mostly think is that satcoms are still too expensive – or at least that they expect the landside model to prevail – guaranteed performance up to a point, faster services and lower prices resulting from stronger competition.

In the process of upgrading its fleet, Intership Navigation of Cyprus also sought even more flexibility, the ability to conclude short term rental agreements rather than make purchases or conclude long term leases.

That seems surprising when airtime suppliers are pricing so aggressively to win business from each other, but it might make sense if suppliers could provide a service that gives the owner a completely new level of flexibility.

There is also a sense that buyers are risk averse, sensing that the shift from L-Band to VSAT and on to HTS carries the risk of the unknown that in the current climate could be a risk too far. This might be conservatism and it might be experience.

One owner reminded me of the Connexion by Boeing debacle, when the mainstream satellite market once again eyed maritime as some kind of untapped opportunity. Its complete failure made for great copy at the time but a salutory warning.

Shipowners have long memories as well as big problems and shallow pockets. Selling to this market will take a golden touch. The idea of being first to market is less appealing than in the heady days pre-2008. Expensive mistakes are not an option.

Oh and by the way in case you are wondering, I didnt choose the headline – my suggestion was a lot more sanguine – but I hope you enjoy the article.