Satcoms buyer – heal thyself

Kevin Tester of MITE was right to warn last week that buyers tread a minefield in specifying maritime satellite communications systems. There has never been greater choice in terms of airtime, band and bandwidth, hardware and value-add solutions and never more clamouring voices trying to flog you unlimited this and unrestricted that.

I’d like to put a parallel point of view, not because I disagree with him, but because it’s one that bears repeating. Put simply, owners and managers have to do more than shop comparatively and in doing so drive down price to the lowest possible level.

At the heart of the problem lies a chronic but typically shipping industry mismatch. Owners want the moon on a stick (OK well, fuel savings) but insist on holding down the comms budget and making it hard for the entrepreneurs Kevin talks about to provide the value adds that might actually save them money.

Who is stopping that engine condition monitoring data getting ashore? Yes it’s the owner. Who is wasting money (as Giampiero Soncini regularly contends) on inventory because they cannot replicate databases or make RFQs from the ship. Right again. The list goes on and on.

Some owners go the other way. Dualog told last year’s DS Athens of the Norwegian anchor handling workboat which burned through 40-60GB a month but had no IT policy in place, resulting in congestion so bad that the bridge team couldn’t communicate when they needed to, risking put the ship off-hire.

For the most part, though it’s famine not feast that is the problem. Service providers can talk all they like about the potential of higher bandwidth, faster speeds and HTS services – owners still see cost not value. As a result, the majority of the SOLAS fleet is living in a world closer to 256kb or even lower than to megabits per second. Some send a few hundred megabits of data per month and are happy with that.

This by the way, rather undermines the argument that owners are simultaneously being starved of small volume options while at the same time demanding boundless volume at ever faster speeds. This is not a one size fits all market.

What owners want is uptime and dependability and if they have their eyes on the ball, they will be thinking about the value-added options available to them and weighing these against trading opportunities.

But no-one should imagine that vast numbers of existing bulk carriers or tankers will be re-fitting with VSAT or FleetBroadband. The fact that many owners have entered zombie territory – reliant on the goodwill of their banks but with little forward earnings momentum – means that all available costs will be cut.

Still satcoms makes up a tiny part of day to day operating expenses, marginal when compared to the cost of 50 tonnes of fuel a day burned by a Capesize bulk carrier hauling ore from Brazil to China.

Almost a year ago, Inmarsat Maritime President Frank Coles suggested the VSAT opportunity might be applicable to perhaps 20,000 of the SOLAS fleet, which by some counts is close to 70,000 vessels. That suggests that the remainder will be divided between higher spending owners and more technical ships and a large rump of users who are happy to use lower volumes at lower prices.

But in fact if owners are prepared to look even a little they will find a universe of applications already optimised for satellite, which can hold down bandwidth usage and cost. If they are serious about increasing data traffic, then there has never been a better time.

Let’s not mistake this for utopia – fair usage policies, committed information rates and the like mean that the internet experience at sea will never be like the experience ashore.

But the fact remains that owners who aren’t prepared to spend money on business communications are missing a trick. Owners who aren’t prepared to offer crew communications will see a direct correlation in the quality of the personnel available to them.

And there is another reason to look beyond the short term timeline. As managed VSAT services supplant L-Band, a new universe of services, applications and traffic management is increasingly opened up.

To continue to believe, even as that era begins to open up, that spending on communications is a necessary evil rather than an opportunity to be grasped, would be an enormous mistake.