Maritime VSAT Statistics

There are a number of segments within the maritime niche which have been very well targeted and are now saturated not least because of the O&G downturn even though this remains one of the largest segments in terms of revenues. These include O&G rigs & platforms with the leading providers being Speedcast, RigNet and ITC Global; cruise lines, with SES/O3b and Speedcast who are the largest in this segment that now has many more operators; oil & gas supply Marlink, RigNet, KVH, Inmarsat, BlueTide, SpeedCast and other O&G specialists); and, ferries Marlink, TSBC and Telespazio. These sub-segments are small in volume – less than 4,500 ships in total – but very high in value. The related market in the oil and gas business is broken out as maritime in the latest COMSYS Maritime VSAT Report. This includes supply vessels, seismic vessels and dive support services.  There has been more competition and entrants into these segments and the market disruption we predicted in our last report has happened.

Changes over the past couple of years in the demand for broadband at sea and the pressures in the land-based market have increased the number of operators deploying stabilised antenna systems from a handful of very specialised companies to more than 120 service providers across the world all interested or providing some form of VSAT service to the maritime industry.  At the same time there have been many smaller operators close down as well as a great many acquisitions.  There continues to be greater penetration of the lower levels of the market which comprises several sub-segments that are both regional and international in scope. The saturation of the high-end segments together with the wider commercial segment now seeing broadband at sea as an essential requirement to both retain crew and adopt more value-added services which help reduce operational costs has now brought the commercial .segment as the number one in terms of both vessels in service and revenues.

Now that the old issues of ocean coverage of bandwidth by satellites has gone away, service pricing has become more commoditised and a growing move towards smaller stabilised antennas, the growth of the number of vessels with VSAT has exploded since 2016.  Recent growth of maritime VSAT services has been extremely vibrant as commercial fleets the world over have increasingly thrown away the inhibitions so evident in past years.  All stabilised antenna VSAT services have shown strong long term growth in the number of vessels served with growth at 3 year compound annual rates having risen from 10% to 20% between 2016 and 2018.  Although due to some of the points made above as well as others, like rapidly falling bandwidth prices, the revenues during this period (2016-2018) only grew by 5%.

A big part of all this is the fact that the fishing business has seen a sea-change (pun intended yet again!) as the Chinese government introduced a subsidy for the service and the number of fishing vessels connected grew exponentially in the last three years.  There are challenges with this very low cost government initiated service for operators and manufacturers, but other countries are also looking to adopt similar programs based on various security reasons.  In our opinion the wider commercial tanker, container and freight market is the most attractive area of growth for maritime VSAT operators for the next three to five years as fleet owners and operators have finally accepted the criticality and utility of broadband and the fact that VSAT services represent an important tool to lower costs and retain crew.  However, with new pollution regulations being imposed, vessel owners may have financial challenges as they are forced to upgrade and modify their ships to meet these compliances.

The addressed customer base has broadened quite considerably and average prices and margins have continued to reduce.  This, smaller antennas, the heavier move into the fishing market and other things have expanded the potential numbers of vessels that may be connected with VSAT in the future versus the way that VSAT was considered to be a highly expensive good bandwidth service that only the really rich vessels could afford once upon a time.

The maritime industry now enjoys a far greater diversity of choice in hardware, software and service as well as the proposed GEO, MEO and LEO satellite developments all of which are heavily promising to change the market.  Most successful operators have adopted value-added services as part of their integrated connectivity and antenna manufacturers, led primarily by Intellian, have brought more simplicity, reliability and lower operational costs.

MSS services are clearly important and play an essential role for safety and back-up services, but the lower bandwidth and higher pricing that L-band services have to bear has now ensured that MSS is more of a complement than a competitor to VSAT.  Revenues from stabilised VSAT services (which include bundled hardware) grew to almost $1.8 billion in 2014 and the number of vessels, including rigs and platforms, in service closed in on 52,000 in 2019.

The 5th Edition of the COMSYS Maritime VSAT Report analyses the total available maritime market based on primary research, publicly available data and specific data points from industry contacts.  With all the changes mentioned briefly above, the report shows that there are over 3 million vessels of all types that could theoretically be connected by satellite services and that, after removing the small yacht and fishing market, now only 137,000 vessels represent the core opportunity of which almost 38 per cent are actual or near term potential customers for VSAT.  The breakdown of these vessels by segment can be seen in the pie chart above.