Coronavirus has caused a slump in VSAT satellite communications in some vessel sectors, but increased overall use in merchant shipping
This has caused considerable pain for some VSAT service providers, but boosted business and market share for others
In its latest market report, Valour Consultancy said: “There are many notable pain points in maritime satellite connectivity right now, but also a few good ones.”
“Passenger and offshore energy markets have been decimated by the fear of the pandemic, travel restrictions and the unknown of what is next,” the market analysts continued.
However, other markets have remained less affected, and are even up from 2019 in terms of VSAT revenues.
“The effect of having so many seafarers in the merchant market stranded at sea has been to increase crew welfare video, messaging and telephone communication usage over the last six months,” said Valour Consultancy.
“Some of the super wealthy have also seconded themselves on their private superyachts for the period.”
These increase demand for VSAT connectivity for entertainment, business and operational communications, data transmission and video streaming.
Satellite communications demand on fishing vessels also remains at steady levels.
“Demand for overall food produce such as seafood has remained stable and the market is likely to remain steady over the year,” said Valour Consultancy.
It used global domestic product growth (GDP) and decline to provide further information and forecasts in its report.
Global growth is projected to decline by 4.9% in 2020, according to the International Monetary Fund’s World Economic Outlook update in June.
That was 1.9 percentage points below the April outlook. This indicates the global Covid-19 pandemic has had a more negative impact on activity in H1 2020 than anticipated, and the recovery is projected to be more gradual than previously forecast.
Overall, this would leave 2021 GDP some 6.5 percentage points lower than in the pre-Covid-19 projections of January 2020.
Valour Consultancy ranked VSAT service providers according to the number of terminal installations and vessel subscriptions in 2019.
It ranked Marlink in the top spot with a global market share of 23.9% because of its focus on merchant shipping at a time when crew welfare support is rising.
Valour Consultancy estimates that Marlink had more than 7,000 vessels subscribed to its SeaLink VSAT service.
Speedcast was ranked second as it increased market share from 2018 through its acquisition of Globecomm.
However, Speedcast has gone through some financial turmoil recently, filing for Chapter 11 bankruptcy protection in April 2020 and has suffered from declining demand for passenger shipping connectivity.
Inmarsat was ranked third for its wholesale mobile satellite services (MSS) and VSAT satellite capacity value-adding service resellers (VARs).
“Inmarsat has done a good job of switching its large existing MSS customer base to its Fleet Xpress (FX) VSAT offerings whilst also getting its VARS to commit to fulfilling a number of vessels on its FX services,” said Valour Consultancy.
KVH Industries was ranked fourth by the market analysts with more than 10,000 VSAT antennas deployed cumulatively.
“KVH is a notable maritime connectivity player and has performed exceedingly well with its Agile Plans VSAT leasing service,” said Valour Consultancy.
However, Global Eagle has suffered from rapid decline in passenger shipping and offshore connectivity. Its market share dropped from 10% in 2018 to less than 8% in 2019.
VSAT maritime connectivity service providers global market share
Marlink - 23.9%
Speedcast - 15.0%
Inmarsat - 11.3%
KVH Industries - 8.8%
Global Eagle - 7.6%
ITC Global - 6.6%
RigNet - 5.9%
NSSLGlobal - 5.2%
Navarino - 4.3%
Satcom Global - 2.7%
Others - 3%
Vessel connectivity and maritime communications will be discussed during Riviera Maritime Media’s webinar weeks and virtual conferences in Q4 2020 and Q1 2021 - use this link to view more details and to register for events