In its latest research, Euroconsult projects that the previously growing maritime connectivity market will experience a significant setback due to the Covid-19 pandemic. Maritime VSAT connectivity reached an all-time high of 28,200 connected vessels at the end of 2019 but because of the current health crisis, the previous projection of 49,300 terminals by 2023 has been reduced to 40,600 units.
In 2019, the Maritime satellite VSAT communications market experienced high growth with the total number of terminals increasing by 17.5 percent year over year, and VSAT services revenue growing by 11 percent to approach $1.3 billion. Increasing demand from passengers, as well as regulatory pressure on communications and crew welfare were major factors pushing maritime operators to install new generation satellite systems on their vessels.
“Despite the current setback, the fundamentals of maritime connectivity should continue to apply, with strong demand from the shipping industry as well as for leisure and business connectivity and operational applications,” said Pacôme Révillon, CEO of Euroconsult. “In light of technology advances and the appetite for applications and bandwidth we expect the industry to return to growth in two years’ time.”
The research, titled Prospects for Maritime Satellite Communications, provides detailed analysis of five market segments including merchant shipping, the cruise industry, offshore energy production, fishing, and private yachting, all of which are expected to reflect some slowing in the current environment. Merchant shipping is the largest market segment for VSAT with 17,700 connected vessels and revenues of $565 million in 2019.
“Because of the current limits on international trade and the economic downturn resulting from the pandemic, new ship deliveries and the subsequent VSAT installations they entail are forecast to slow,” said Xavier Lansel, Senior Consultant at Euroconsult and Editor of the “Prospects for Maritime Satellite Communications” research. “Despite the presence of fixed contracts, docked vessels will likely result in a lower average revenue per user for connectivity services.”
The cruise industry was also a major demand driver for maritime satellite connectivity. In some cases, service provider revenues reached $110,000 per month for the largest cruise ships. This is expected to be the market segment most impacted by the current health environment, with most ships temporarily docked.
Euroconsult forecasts that the cruise industry slowdown will continue for several years prompting cost-reductions and delaying demand for new vessels. Even as fast internet connectivity has become a requirement for cruise ship passengers there will be a sharp decrease in VSAT services revenue in 2020, and projections are that it will take until 2025 for revenues to reach 2019 levels again.
Source: https://advanced-television.com/2020/05/21/research-maritime-connectivity-faces-covid-19-setback/
