Northern Sky Research

Going Mobile with M2M & IoT

Nov 5th, 2015 by Alan Crisp   More from this Analyst | Profile

Aeronautical and Maritime markets are key segments for satellite telecom, but one opportunity oftentimes 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 of nearly a quarter of a billion dollars by 2024.

For the first time, NSR analyzed and identified trends separately for Maritime and Aeronautical M2M demand. Utilizing data from NSR’s most recent report, M2M and IoT via Satellite, 6th Edition, NSR identified safety requirements, driven by both industry and government, pushing adoption rates of satellite-based M2M globally. 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 market is expected to reach a more modest 48,700 in-service M2M units on the back of a solid 5.4% CAGR.

While bandwidth growth is currently increasing due to in-flight connectivity and Wi-Fi services onboard for passengers, current safety applications consistently remain 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.

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 narrow-body aircraft orders coming from airlines in the region.

Longer-term, should ‘black box’ data streaming become mandatory, data requirements will increase significantly, especially when combined with further engine telemetry streaming. The U.S. National Transportation Safety Board (NTSB) is already calling for new regulations, and Qatar Airways is now trialing the technology. The future of IP-based M2M streaming is coming sooner rather than later, and will pose competition to ACARS (Aircraft Communications Addressing and Reporting System).

Maritime safety requirements are likewise 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.

With that said, all aircraft and vessels are not expected to be upgraded to support satellite based safety requirements instantly, and 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.

Bottom Line

Safety is a large driver of new and upgraded M2M terminals in both the Maritime and Aeronautical sector. While location tracking and big data applications and optimization are the main drivers for Maritime and Aeronautical, safety demands are ever 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.

NSR is experienced in strategic advisory and consulting efforts regarding M2M/IoT, Aeronautical and Maritime connectivity across all platforms, regions and connectivity types.  Please contact Christopher Baugh for more information.