VSAT vs LBand, Examining the Evolution of Maritime Satcom Pricing Adonis Violaris

Managing Director Telaccount Overseas Ltd

Full Management vessels: 320

Bernhard Schulte Vessels: 82

Crew Management vessels: 353

30 VSAT Terminals

Over 17,000 employees onboard and ashore

8 Service Delivery Centres

1 Crew Management Centre

and 25 Crew Service Centres

Presence in over 25 countries around the globe

BSM Overview

Established in January 1989 by 17 Members

Today: 155 Member-Companies

Shipowning

Shipmanagement

Chartering

Shipping-related

2200 Ships - 49 Million Gross Tons

Among the largest Shipping Associations Globally!

11 Companies have 236 VSAT Terminals on

their vessels

Cyprus Shipping Chamber Overview

Telaccount Overseas – 25 years of Experience takes us forward

Established in 1988

Accounting and Communication Service providers

Recognised Accounting Authority by 35 major Flags States

Appointed as Point of Service Activation by 110 countries

Distributor partners of 5 Land Earth Station Operators: Inmarsat Direct, Astrium, Otesat Maritel, Station 711 and Singtel

Installation and support of satellite terminals, Electronic Bridge Equipment, LRIT Conformance Test and Certification, SVDRs, ECDIS, Radars, etc.

Certified with ISO 9001:2008

www.telaccountoverseas.com

The year 2013 started with the crash of Intelsat’s 27, almost immediately after take-off, a satellite that could close the gap in the Ku-Band Network and demonstrate a significant improvement in the Intelsat’s Epic NG programme.

Inmarsat successfully launched the joint EU-funded extension to its LBand, the Alphasat.

On 8th December, Inmarsat successfully launched their new ‘toy’, the first of 3 or may be even 4 Ka-Band satellites, that will provide the maritime communications industry (and not only) with broadband technology and speeds of up to 50 MBits onboard the vessels.

Satellite Market Update

EADS acquired Vizada for its Astrium division for $920 Mio. Astrium to be renamed Airbus soon.

Cobham acquired Thrane & Thrane for $445 Mio

Wins Eutelsat acquired the German based DH Interkom

SpeedCast acquired Pactel and Elektrikom Satellite Services

Panasonic Avionics acquired majority stake in AeroMobile for $400 Mio

Eutelsat acquired Asia-Pacific Satellite from GE Capital for $228 Mio

Wasserstein buys Globecomm for $340 Mio

Broadband Satellite Services (BSS), an investment company based in the UK, acquired AND Group and Satcom Global

Globewireless acquired by Inmarsat for $40 Mio. With this acquisition Inmarsat now has the majority of vessels with Astrium next and followed by the other DPs. Is Navarino the next Inmarsat acquisition, being owned by Inmarsat for 49%?

Acquisitions

Inmarsat Terminals

Source: Inmarsat Partner Conference, Istanbul, Nov. 2013

0

50,000

100,000

150,000

200,000

250,000

300,000

Dec-2009 Dec-2010 Dec-2011 Dec-2012 Sep-2013

11,593 10,760 9,843 8,679 7,918

35,040 33,854 32,375 30,838 29,810

25,728 26,734 26,436 25,256 24,321

5,667 16,005 25,823 33,845 39,696

133,834139,970

145,181149,343 151,434

Inmarsat B Mini M Fleet FleetBroadband Inmarsat C

FBB Terminals

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50007000

1100013000

16000

2000022000

24000

2700029000

3200034000

3600038000

4000042000

Source: Inmarsat Partner Conference, Istanbul, Nov. 2013

VSAT Terminals in Service

0

2000

4000

6000

8000

10000

12000

14000

0203

0405

0607

0809

1011

12

1500 1600 1900 2200

3800

5100

6800

8300

10200

12300

13100

VSAT Terminals by segment – The largest spenders

400 500 600 700 900 950 1150 1150 1250 1450 1550300 400 500 600

800 10001400 1600

19002200 2350

200 250350

400400

400

500700

800

10001200

50100

120200

300400

700800

900

11001250

100110

230500

1000

1750

2100

2400

3000

3500

3800

50

70

140

400

550

650

800

850

5050

50

100

200

300

700

900

1400

1750

1850

50

80

150

300

400

500

0

2000

4000

6000

8000

10000

12000

14000

16000

02 03 04 05 06 07 08 09 10 11 12

Inland

Leisure

Fishing

Commercial

Military/Government

High-End Commercial

Offshore Service

O&G Rigs

Demand of transferring high amounts of data to and from the vessels

Inmarsat price increase for narrowband terminals over the last 2 years made it almost unbearable for the ship operators to retain this technology, making the switch to a broadband terminal the only option

Increasing pressure on ship operators to provide a better overview about the vessel’s operation: cargo status and containers temperature, fleet tracking and reporting with real time updates, bunker fuel consumption, paperless vessel, etc.

Safety and other regulatory requirements increasing the need for connectivity at sea with average data consumption growing rapidly

New enterprise applications require higher bandwidth, VPN, Intranet, etc.

Crew Welfare - the need to have internet Cafés onboard. Maritime Labour Convention (MLC) 2006 - regulatory focus on crew welfare and training

VSAT taking a larger share of the market, supported by improving VSAT coverage and capacity supply and decreasing hardware prices

Combined Ku/L band packages (XpressLink) emerging

Changes in usage pattern drive the growth

Inmarsat Coverage Map

VSAT C Band Coverage Map

VSAT Ku Band Coverage Map

Maritime Shipping Traffic Worldwide

There are currently 40.000 FBB terminals installed onboard the vessels

Ka-band frequencies provide more capacity than traditional C- and Ku-band frequencies.

All You Can Eat or XpressLink can provide unlimited data

I-5 satellite for IOR launched on 8th

December 2013

One network infrastructure and provider with seamless spot beam handovers

Construction of fourth satellite under way

6 satellite access station (SAS) sites: two per satellite region

The Global Xpress solution

GX

FB

NetworkService Device

GX FB

Inmarsat core network

Inmarsat Ka Band Coverage Map

Investment decisions

BANDWIDTH up to 5 Mbps/2 Mbps From 64Kbps up to 4 Mbps/1 Mbps

up to 432 kbps up to 128 kbps

ANTENNA SIZE ~1.8-2.5 m diameter ~60cm-1.5 m diameter 29x27 cm(150)33 x 27 cm (250) 79 x 68 cm (500)

23 cm height57 cm diameter

ANTENNA WEIGHT

>200-850 kg ~30kg-150 kg 5-35 kg 11 kg

TERMINAL COST ~$70,000 - $100,000 ~$20,000-$60,000 ~$5,000-$15,000 <$5,000

SERVICE COST ~$1,500-$8,000/month (flat rate)

~$1,000-$8,000/month (flat rate)

~$0.5-$0.59/minute voice; $0.27-$17 MB data

~$2,700 - $3,000/month (flat rate)

~$0.6-$1.5/minute voice;

~$7-$12/MB data

ADVANTAGES • Unlimited data consumption• Higher bandwidth• Ku/ C Band Antenna from KVH V11 provides Inmarsat

like coverage

• Worldwide coverage• Smaller & low cost terminals• Low installation costs• Signal is not affected by heavy rain• Still affordable for every “pocket”

DISADVANTAGES • Large, heavy and expensive equipment• High installation and maintenance cost• Coverage area for Ku Band is still an issue• Signal loss due to heavy rain

• Low bandwidth rates. Highest is 432kbps• High per MB cost• Affordable installation and maintenance cost

Project Management

FBB or VSAT or both?

How much bandwidth?

What can crew do with bandwidth?

Trading area of the vessels

Reporting

Managing

Supporting

Cost Management

PIN & Account assignment

Pre-Paid or Post-Paid

Roll over or not

SCAP management or SIM Allowance

VSAT Flat monthly rate

Fleet view

Daily, Weekly, and monthly reports

From shore or ship you need to have control

FBB250 / FBB500 / KVH V7 / SEATEL

4 Laptops

4 Telephone sets

Gateway

Wi-Fi Hotspot(s)

Standardised Software

6 GB Plan - 1GB for Commercial purposes and 5 GBs for Crew Internet purposes

Individual e-mail with web-based access both onboard and ashore

Access to mobile sites to avoid high charges on web browsing

Prepaid crew data and calling cards

Business Internet restricted through BSM Internet Policy

Solution and Design

Internet Café Network onboard

Since the beginning of last year iCafé was installed on 82 vessels

750 unique registered users

250 MBs per PIN on vessels equipped with 6GB SCAP, 3 months rollover with Inmarsat FB250 / 256Kbps and FB500 / 432Kbps

400 MBs per PIN on vessels equipped with VSAT, 3 months rollover. Unlimited Data with KVH and Seatel VSAT 128/256 Kbps

20 MBs per day per crew on vessels equipped with VSAT or AYCE and service is provided to the crew free of charge

Status of the iCafé project and Data Allowance

iCafé Usage Report - Registered Users

Total Active Users: 735Jan 2014

iCafé Usage Report – Amount of MBs

Total MB: 269GBJan 2014TankersContainers

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Total Traffic MB

Inmarsat new acquisition: iFusion instead of Infinity? Globe Email instead of AmosConnect? Will iFusion be the GX Service Enablement Platform (SEP) Smartbox?

Astrium/Airbus Xchange, Telaccount Gateway / Setel SmartBox, W-Link Shipsat, Station 711 Start@Sea, Otesat S@tGate, Dualog will still be used with GX Platform?

What will be the prices for GX? Indication for 256/256kbps will be the same price as what we currently pay for 128/128kbps on XpressLink

The maritime VSAT world is going to change radically, soon. Why to use Ku Band now with the limitations in coverage area when next year Ka Band will provide worldwide coverage? Are your Ku Band antennas Ka Band compatible?

Are you ready to go for higher bandwidth? Is Crew Welfare a good reason to move to a 6GB plan?

Ship operators need to educate themselves

Conclusion - Things to think of!

Inmarsat new acquisition: iFusion instead of Infinity? Globe Email instead of AmosConnect? Will iFusion be the GX Service Enablement Platform (SEP) Smartbox?

Astrium/Airbus Xchange, Telaccount Gateway / Setel SmartBox, W-Link Shipsat, Station 711 Start@Sea, Otesat S@tGate, Dualog will still be used with GX Platform?

What will be the prices for GX? Indication for 256/256kbps will be the same price as what we currently pay for 128/128kbps on XpressLink

The maritime VSAT world is going to change radically, soon. Why to use Ku Band now with the limitations in coverage area when next year Ka Band will provide worldwide coverage? Are your Ku Band antennas Ka Band compatible?

Are you ready to go for higher bandwidth? Is Crew Welfare a good reason to move to a 6GB plan?

Ship operators need to educate themselves

Conclusion - Things to think of!

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