REVENUES OF ¼ U$ B BY 2024
Safety is a large driver of new and upgraded M2M terminals in both Maritime and Aeronautical sectors
M2M and IoT mobility boosting satellite revenues, but frequency bands to remain selective for safety, says NSR.
The aeronautical and maritime markets are key segments for satellite telecoms, but one opportunity that is often overlooked is narrowband M2M/ IoT. While individual unit bandwidth requirements may be small, M2M/ IoT via satellite - on the high seas and at cruising altitude - will see retail service revenues reach almost a quarter of a billion dollars by 2024.
Northern Sky Research ( NSR) has analyzed and identified trends separately for both maritime and aeronautical M2M demand. Data from its most recent report entitled: M2M and IoT via Satellite, 6th Edition, identifies that safety requirements, driven by both industry and government, are pushing adoption rates of satellite- based M2M globally.
In short, says Alan Crisp for NSR, the Maritime M2M market remains a much larger market overall, with NSR expecting over 560,000 units in- service by 2024, representing a strong 7.3% CAGR from 2014. By comparison, the Aeronautical M2M market is expected to reach a more modest 48,700 in- service units on the back of a solid 5.4% CAGR.
While bandwidth growth is currently increasing due to in- flight connectivity and WiFi services onboard for passengers, current safety applications consistently remain in narrowband, with monitoring, location position, data reporting, and voice all requiring small amounts of data.
Although safety has always been a high priority for many, a number of recent high profile incidents are moving aircraft ( business jets, wide and narrow body aircraft) and ships ( merchant, fishing, passenger, offshore) to implement greater levels of satellite- based M2M for safety purposes. The majority ( 96%) and remaining steady over the next decade are on L- band. While this is generally due to low bandwidth requirements, there are a number of other regulatory factors at play. Cockpit communications, for example, are expected to remain on L- band as other bands have not been certified for safety usage worldwide. Nevertheless, further regulations by national safety authorities are expected to drive more installed units moving forward.
Unlikely that safety bodies will approve other frequency bands for safety any time soon
Another reason for the continued dominance of L- band is its proven track record, and it is unlikely that safety bodies will approve other frequency bands for safety any time soon. Growth in the ocean regions, especially the Pacific Ocean, remains strong, with increasing levels of flight traffic being a strong growth driver. Beyond this, Asia shows strong potential due to the large number of new narrowbody aircraft orders coming from airlines in the region.
Maritime safety requirements are also expected to expand in their demands, especially on large vessels with large crews, where location reporting is required, and higher levels of automation to reduce staffing offshore is a real cost- saving proposition. However, many smaller pleasure vessels are choosing SPOT or InReach type devices, or alternatively the Cospas- Sarsat program as a lower- cost option.
However, aircraft and vessels are not expected to be upgraded to support satellite based safety requirements instantly. Rather, this will be more of an organic transition over a period of years. In fact, today it is still not considered mandatory in the minds of many due to a perception of negative cost compared to perceived benefits.
While location tracking and big data applications and optimization are the main drivers for Maritime and Aeronautical, safety demands are increasing with regulations expected to come into force in the next decade. This is to be the case in both developed regions with existing safety infrastructure, but also in developing regions that are in general ‘ catching up’ on safety. With trials already underway, higher frequency reporting is expected to become the norm sooner rather than later, with next generation M2M and L- band networks driving strong revenue growth well into the future.