Too many providers and not enough profits. Who will buy whom and can the market finally generate profits on a sustainable scale? These are the topics swirling beneath the surface for the inflight connectivity market. Technical innovation continues apace, but what of consolidation and profits??
So who would pick now as a smart time to join the fray as a new entrant? Turns out there are at least a couple companies willing to make such a move.
They see the market as large enough for additional players or come with nation state backing to deliver new options for airline connectivity. As the larger companies battle with each other to fit aircraft tails these new entrants scoop up small pockets of customers, hoping to prove valuable in the longer term. Earlier this month two such vendors emerged, one of which even has a commercial airline contract. Details are hazy, but it seems that the consolidation the industry expects (and arguably needs to survive) might not play out this year as initially forecast.
Saudi satellite operator Taqnia Space used the Aircraft Interiors Expo 2018 event to launch its UON inflight wifi connectivity solution. The announcement includes a deal to fit the system on the aircraft of Saudia, the country’s flag carrier. Specifics on which aircraft types or how many will be fitted were not detailed, though both short-haul and long-haul services are suggested.
UON is easy to use, accessible to everyone and offers individual and unrestricted connectivity for every passenger. You can easily connect your smartphones, tablets or laptops wirelessly with UON and also surf the Internet at many kilometers above the clouds, watch live TV and make international phone calls via GSM. And that throughout the whole flight. – Eng. Abdullah Alosaimi, CEO of TAQNIA SPACE Company
Taqnia Space partnered with industry stalwarts Eutelsat, SITAONAIR, Jamco, iDirect and Axinom to help build out the service offering. SITAONAIR will deliver its 3.5G GSM platform as part of the connectivity solution. It will also manage the overall service infrastructure. Axinom developed bandwidth management services to facilitate streaming of live content to consumer devices on board.
Taqnia Space CEO Abdullah Alosaimi suggests that UON allows airlines to “[open] up entirely new segments of value creation – without expensive investments in IFC and technology updates.” It is unclear what the up front cost for the equipment will be or if Taqnia is subsidizing that to keep airline acquisition costs below that of competitors, as the statement implies.
UON is expected to be flying within a year on Saudia aircraft. This timeframe is spectacularly aggressive, even with the roster of experienced providers aiding the work. Saudia confirmed that timeline, however, suggesting that it has aircraft ready to use for testing in the near future.
Taqnia operates or has plans to launch a handful of Ku and Ka-band satellites covering Europe, the Middle East, North Africa and South Asia. The UON solution includes a Ku/Ka combination antenna that will allow aircraft to connect to the best satellite for service anywhere on the globe. For service under the owned satellites UON should be able to price very competitively; Viasat works with a similar business model and appears successful on that front.
Delivering a truly global service, however, will require partnerships with other satellite providers given the limited footprint Taqnia Space can cover on its own. With limited initial demand for such services it is unlikely that Taqnia Space holds much leverage in the negotiation of such partnerships. Ultimately this leads to higher transport costs, though potentially buying small bits of otherwise unused capacity (i.e. less than anyone else wants) could be cost effective. The status of such deals is unclear; a representative at the company’s AIX booth was unable to provide any useful details about the service offering.
Sputnik partners with SES, Aeroflot
Separately, Russia’s Sputnik Telecommunications Entertainment Company (STECCOM) announced a deal with satellite operator SES to deliver inflight connectivity via SES satellite capacity and associated services. The deal includes sharing ground infrastructure between the two companies across Europe, Russia and Central Asia.
With this agreement STECCOM is positioning itself to extend its aeronautical network throughout Europe and is able to create opportunities for future reach beyond this geographical area. Our partnership with SES Networks gives us access to a multi-band, multi-orbit aero platform, which allows us to offer differentiated solutions. – Oleg Kuts, STECCOM CEO
This service will be deployed on the Aeroflot short-haul fleet, covering 81 A320 family aircraft. The company plans to price the offering at 800 rubles ($13) for one hour or 1000 rubles ($16.25) for a full flight. The company promises 10 Mbps throughput with the offering. The full complement of aircraft are expected to be fitted by the end of 2019. Eight of the A320s have the hardware installed today; the service is expected to be activated in July 2018.
Too little, too late?
In both cases the operations are small, even as the vision is larger. Maybe that is enough, depending on how deep investors’ pockets are. But these vendors certainly face an uphill battle to deliver the services on to aircraft and then to do so profitably.
More from AIX 2018
- Google’s "inflight internet play" brings questions, not answers
- Bunk beds on board: The new plan to make economy class travel comfortable
- Qantas to "flex" A380 cabin
- DLD 189: A bunk bed bonanza at AIX 2018
- Revenge of the Skyrider
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