The following Technology Update article is the last one that the amazing Roger Horner has sent to The Islander, literally hours before his very sudden passing on 8 February 2024. Roger has shared his knowledge and insights in each of every Islander issue since April 1997. This makes him the most loyal and committed contributor to our publication and is a testament to the wood he was carved out of. He co-founded e3 Systems after arriving in Mallorca by sailboat, 28 years ago. He was an inspiring and impressive, yet approachable gentleman.
He was an important member of the Mallorca yachting community and he is already being missed by so many who are now processing the shock and sadness of his sudden passing. Our hearts go out to his wife and two daughters and the e3 Systems team.
In the next Islander Issue we will publish a more extensive and, without doubt, inspiring obituary for Roger.
For us, 2024 has started with a considerable amount of business activity. More and more yachts are signing up for Starlink, several of which require upgrades to their networks to get the benefit of the increased bandwidth distributed around the yacht.
It’s been interesting to observe how yachts have used Starlink over the northern hemisphere winter, whether they’ve been in port, in the yard or in full cruising mode in the Caribbean, as we come to the end of the first full Starlink Maritime calendar year.
It’s also been very interesting to review how Starlink has disrupted the legacy airtime services, primarily VSAT GEO, 4G/5G, and L-band services.
The end of the dinosaurs!
The SpaceX Starlink disruption has seriously hit the conventional satellite industry across the board, from satellite builders, rocket launchers, antenna manufacturers, satellite operators, satellite airtime providers, integrators large and small.
For a great proportion of 2023 the larger conventional organisations, the dinosaurs, have kept their heads buried in the sand and have been unprepared to accept that they are under threat! They simply have not believed it will affect them. They have had a rude awakening! This disruption heralds the end of the dinosaurs and the start of a new level playing field.
They are having to rethink their whole business strategy; from what they sell to how they can afford to support it. For example, the Average Revenue per User (ARPU) of a VSAT satellite provider has dropped considerably this last year. Every user still requires the same level of support, even though they are using less bandwidth, and the cost of that support hasn’t changed. If one solution is to consider staff reductions, how do they aim to provide the support that is still required?
The smaller, more agile organisations have been able to adapt faster. The smaller organisations are typically the integrators, and a few have moved away from selling airtime services completely.
Some of the service providers and larger integrators/resellers, such as us, have become Starlink Authorised Resellers. This has required a significant investment which has precluded the smaller companies. The service providers and larger integrators have typically sold both direct and via their own resellers, however Starlink does not allow their Authorised Resellers to sell to their own resellers. We are only allowed to sell direct to the end-user. Starlink have been very strict about this over the last year.
So, Starlink has not only disrupted the technology solution but the conventional business structure as well.
What damage has Starlink done to the legacy services by the end of 2023?
VSAT services have taken the biggest hit. Typically, those yachts with VSAT, that have installed Starlink, have reduced their VSAT bandwidth to a standby “bare minimum”, such that the service is live and ready to upgrade at a moment’s notice if Starlink becomes unreliable. Starlink hasn’t been unreliable, and the VSAT bandwidth upgrades seen in previous years have not been requested.
In the yachting market we believe there was a 75% reduction in revenue in 2023 due to Starlink. As mentioned, several yachts have been testing Starlink over their first season and been reluctant to switch their VSAT off until the reliability has been proven. We believe several yachts will terminate their VSAT contracts completely in 2024 and we will see more VSAT equipment being removed.
The reduction in 4G/5G revenue has also been significant; in the range of -40%. However as there are Pay as you Use 4G/5G services, where you only pay if you use it, these services have been kept onboard as a backup primarily in areas where Starlink doesn’t work or if Starlink performance fails or deteriorates.
Following a recent report on maritime 4G/5G, Joshua Flood, Senior Research Consultant at Valour Consultancy, has dissected an extract of some of its findings, with some juicy insights from insiders in the marketplace, including us, in SuperyachtNews. SuperyachtNews.com – Owner – Cellular connectivity in the superyacht realm.
He made a good observation about our eHUB Connectivity Management solution and how that simplifies using our 4G/5G “Pay as you Use” with Starlink: “e3 Systems, has developed a clever connectivity management system called eHUB that manages the use of global ‘pay as you use’ 4G/5G SIMs as a back-up to Starlink or future upcoming LEO services. This includes automatic failover and bonding with these 4G/5G services, so these services are only used and charged for when required, saving the captain and crew the challenges of managing multiple connectivity modes.”
We also made the point that 4G/5G services have a challenge when they are up against Starlink, as the cost to use Starlink is the same globally in any region whereas there is a huge variation in 4G/5G charges such as between the Med and Caribbean, let alone the more remote locations of the world.
L-band services from Inmarsat and Iridium are not in competition with Starlink and the GMDSS carriage requirement service provided by these services cannot be provided by Starlink. Our L-band services during 2023 have stayed pretty level throughout the year. In these times of lower airtime prices yachts should ask us for our latest Inmarsat and Iridium services and prices as we are an Inmarsat Tier 1 and FX VAR so we can offer direct and excellent prices.
What’s likely to happen in 2024?
As mentioned earlier there has been a 75% decrease in VSAT revenue and 60% of yachts have had their VSAT contracts Suspended or on a Keep Alive service in 2023. We predict that more yachts will be suspending their VSAT contracts this year and possibly removing their VSAT equipment and antennas completely. We removed a couple last year and on another we removed the stabilised antennas from the dome and installed the Starlink panels inside them!
If a yacht wants to terminate its VSAT contract completely we have created a VSAT by the day service. We keep the modem alive, and the yacht can request service by the day on a range of bandwidths with 24 hours’ notice.
We have had several requests for Eutelsat OneWeb LEO services, as a backup to Starlink, from yachts who are removing their VSAT GEO systems. So, we predict a shift from VSAT GEO as a backup to Eutelsat OneWeb LEO as backup to Starlink. The reasoning behind is, even if it’s marginally more expensive than Starlink, it is a different LEO constellation with good speeds and it uses flat panels, so it’s the best high bandwidth backup that will work anywhere.
We would recommend the yacht to keep its 4G/5G service as a backup using either our Pay as you Use, Med or Global services. Also, the bandwidth and latency is similar to Starlink, so using our eHUB with automatic bonding configured removes any concern with regard to Starlink video call dropouts.
As yachts still need to be GMDSS compliant L-band systems will still be required.
Considering all the above connectivity options available in 2024, simplifying the management and support of all these connections is essential. This is what our eHUB Connectivity Management solution does. For example, it will automatically bond different connections to keep the yacht connected 100% of the time, it will also automatically switch to different connections if one drops out. eHUB can also connect the yacht to the internet in the UK or the USA, enabling local IPTV services to be used, whether it’s your home TV or your home Netflix.
If you now feel at home with your super-fast broadband whether locally, in the UK or USA, you may be interested in switching from watching satellite TV to IPTV. If so, we have several IPTV services that we can recommend with all the live sports action during 2024 from the 6 Nations Rugby, NFL Superbowl, Olympics, UEFA Champions League, Euros, The Open, Americas Cup etc.
In mid-March (20th & 21st) we will all be at the Superyacht Technology Show and Conference in Barcelona. You´ll find us in the “e3 Discovery Hall” where we´ll be showcasing all the above on our booth and presenting a TECH Talk on “The LEO, MEO and GEO revolution – The Inside View” as well as specific presentations on eHUB Connectivity Management and LEO services Starlink and Eutelsat OneWeb.
Please contact e3 if you would like a VIP invitation.
