The Maritime VSAT Elephant is still Alive and Kicking

The first major maritime industry event since SMM Hamburg last year opened its doors yesterday in Rotterdam to a large crowd of registered attendees for Europort exhibition .

While some people still have trouble even saying the name SpaceX Starlink, let alone getting past the "S" (this isn't The Scottish Play, people), it is truly on everyone's lips, especially in the shipping community.? At insider industry events it is shunned like the plague while it’s fuelling most of the attendants’ sleepless nights anyway.

“Yay” for the seafarer

They can finally connect and stay connected to friends and family, as well as X, Instagram, YouTube, TikTok, Netflix and then some which I will not name (no not ‘Starlink’ ??). A better era of sleep-less nights for them awaits.

With the announcement of distributing Starlink just over a year ago by SpeedCast, soon followed by Marlink, Castor, and pretty much half of everyone else, a trend was set. Out with the expensive traditional Geostationary VSAT and in with the new Low Earth Orbit (LEO) service. Ten times faster and ten times cheaper. Who can compete with that?

For now, well, nobody can. While there are powerful advocates of ships still needing Committed Information Rates (CIR: that's contractually guaranteed bandwidth, if you're not familiar with the jargon we use to impress you) after looking at the performance of Starlink ("Oops, I did it again"), it's safe to say that it works well, very well. And while the service may not be available everywhere due to regulatory issues, licenses, or geopolitical situations, it's out there and running on the latest and greatest technology while not running out of bandwidth ... yet.

The survival

As everyone in the traditional maritime satellite communication world tries to find reasons and ways to survive an already very competitive market, the reality is starting to sink in. The level of disruption that has been created is sending maritime VSAT to the same shelf as my beautiful Hasselblad — gathering dust as an obsolete technology.? Maersk, Carnival, …

It's tough to realize that the future as it was budgeted and marketed is gone and that the maritime VSAT supplier market is left with crumbs, offering value-added services like SD-WAN (yawn) and cybersecurity (of which, real cybersecurity, they actually have no clue, but that's for another time). Everyone is struggling, and no one seems to have a vision of what the world market will look like a few years from now.? Speaking with nearly all the usual suspects of all sizes results in the same uncertainty, some overly brave, some visibly discouraged.

Cue to OneWeb (whenever they're ready — and that wasn't June 6th, 2023)

Unless Starlink decides to shut down its service for whatever reason (if so, then not unlikely based on Mr. Musk's mood that day) or it destroys itself in a chain reaction due to space debris (now THAT is a real problem), it looks like it will leave little room for newcomers.

The OneWeb service and matching hardware is still factors more expensive than a Starlink terminal (and that's without any reseller / distributor margin on top of that), and the service offering seem ?will be a one-page menu with a dozen mains and a few side dishes. Hardly enough to differentiate as a reseller/distribution partner —

Enters Kuiper

Whenever that will be, with the promise of even smaller terminals and matching rates targeting a consumer/prosumer market, it could heavily impact whatever is left in the high-priced VSAT arena. As for operational resilience, well, two Starlinks and a few Kuipers and an eventual OneWeb for the CIR (if/when it would be needed — in the event the first two would run out of bandwidth I guess) should do the trick, if we dare to be honest to ourselves.

Are we off to another price war and flimsy margins, barely enough to sustain a small army of service engineers to bolt on FPAs while the other half reconfigures your router every day to seem busy while your SOC (Security Operations Centre) gets seriously burnt-out.

What's the solution to this industry disruption, if there is any?

While those who haven't shot themselves in the foot (and those who have are at it again) are lining up for the next best thing in LEO land (OneWeb – aka Eutelsat OneWeb nowadays), which due to 11 chapters and a merger has lost valuable market share/potential already and is still postponing (in)definitely is so far not on the horizon, how will this shape the industry? Will this be the second case of corporate FOMO, similar to the one a year ago? Resulting in heavy commitments and uncertain revenue streams while the ancient Ku-well dries up.

Will only those survive who don’t have a legacy to fulfil and can generate sufficient active terminals?

You tell me … please do, because a lot of us would appreciate your valuable insight.