Inmarsat conference addresses future of in-flight communication

 - October 9, 2006, 1:48 PM

The six-ton I-4 communications satellite Inmarsat launched in late March has taken over satcom transmission routing responsibility from the previous I-3 satellite covering the Indian Ocean Region, according to Inmarsat officials. While this news might not have much immediate impact on the average satcom user, there will be a notable change once Inmarsat switches on the I-4 satellite’s SwiftBroadband high-speed-data services late next year. Officials say that is when passengers flying on appropriately equipped aircraft will be able to access the Web and their e-mail at unprecedented data rates.

The handover of communications traffic from the I-3 to the new-generation I-4 satellite occurred at 2000 hours UTC on May 28, after a brief communications outage in the region. Notably, subscribers to Inmarsat Swift64 services can now use their equipment in areas where previously I-3 spot-beam coverage was incomplete, principally over the southern Indian Ocean, officials said. While the current Swift64 service provides a 64-kbps-per-channel datalink to and from aircraft, SwiftBroadband will increase that speed to 432 kbps per channel.

Compared with the Inmarsat I-3 satellites, the I-4 boasts 60 times more power, 25 times the receiver sensitivity, 16 times the capacity and 12 times the efficiency in its use of radio spectrum, according to Inmarsat. It is the largest commercial satellite ever deployed, with the ability to send and receive signals throughout a single global beam, 19 regional spot beams and 228 narrow spot beams. Flexible power application means Inmarsat can direct more power to any of these 228 single beams as needed. This will be particularly useful in providing additional capacity on major flight routes at peak times, officials said.

Speaking at an Inmarsat-hosted aeronautical conference in Montreal last month, company marketing chief Lars Ringertz said the aeronautical-specific SwiftBroadband service will be switched on late next year, with first hardware certifications starting to pour in early in 2007. Between now and then, he said, a second I-4 satellite for the Atlantic Ocean Region is scheduled for sea launch off the coast of California. That will occur later this year and is expected to be followed sometime next year by the third and final I-4 satellite, this one for service in Asia and the Pacific Ocean Region.

Besides the classic Aero voice and safety services that the I-4 network will support, SwiftBroadband will let users access the Internet and e-mail, transfer large data files and participate in live video conferencing, and so on, at speeds rivaling those of broadband DSL and cable modem connections.

On the data front, Inmarsat will continue to offer two options for accessing digital information. The first will be an ISDN connection for transferring large files, charged by the minute. The second will be a packet switch “always on” service, whereby users will pay for the actual data they transfer.

Inmarsat turned a veritable fire hose of information on the 190 or so attendees of its three-day aeronautical conference at the Ritz-Carlton in downtown Montreal from June 1 through 3, yet company officials remained as tightlipped as ever on at least one important topic. For months, speculation has centered on pricing for the Swift-Broadband services. All that’s been confirmed so far is that per-minute and per-megabyte pricing for SwiftBroadband will be lower than that for current Swift64 data services. By the end of the Inmarsat conference, however, attendees seemed to have no clearer idea of just how much lower Inmarsat has in mind.

Service Pricing Remains a Mystery

Both publicly and privately, sellers of the airborne hardware designed to support SwiftBroadband data services voiced their impatience with Inmarsat marketing executives, who seem to be taking a go-slow approach to pricing until they better determine what the market will bear. That approach, some claimed, is having a stifling effect on purchasing decisions. A number of sales representatives for hardware manufacturers complained openly that airlines have been unwilling to commit to airborne Internet data services for the cabin until they know precisely what Inmarsat and others plan to charge.

“I can’t sell the hardware to an airline that has no idea what the final service pricing plan will end up looking like,” said Chafik Hilal, satcom program manager for Rockwell Collins, a seller of airborne hardware. He said airline executives are confused about what competing services are available, what the coverage areas will be and the upgrade path from current Swift64 hardware to SwiftBroadband hardware.

The question of service pricing was just one of a number of intriguing issues raised at the conference. For example, it’s no secret that buyers who installed early versions of Swift64 data receiver hardware will need to purchase new equipment that can support SwiftBroadband. However, manufacturers have been telling customers that if they buy newer-generation Swift64 avionics, only a software upgrade will be necessary to convert to the faster SwiftBroadband offering. It turns out this may not be entirely true.

Inmarsat is still trying to figure out exactly how it will charge users wanting to access SwiftBroadband services. One idea it is considering is adding SIM (subscriber identity module) cards to Swift64 and SwiftBroadband hardware to grant customers access to the network. A SIM is a smartcard that securely stores the passkey data identifying a particular subscriber.

If Inmarsat requires the technology for accessing its network, buyers of even the newest hardware available today probably would have to retrofit existing boxes with SIM cards. While this might not be as complicated or expensive an undertaking as some have suggested, it nevertheless is a more involved process than the software-only upgrades that hardware sellers are touting.

The players in the market for airborne data hardware are EMS Satcom, Thrane & Thrane, Chelton, Honeywell, Rockwell Collins and Thales. EMS Satcom and Thrane & Thrane build their own satcom hardware and provide satcom components to the other manufacturers. For example, EMS supplies most of the hardware that makes up a Honeywell or Rockwell Collins Swift64-capable satcom system today. Apart from this activity, EMS has sold more high-speed-data satcom systems to the U.S. military than any other manufacturer and appears on track to increase its sales to airlines and business aviation as SwiftBroadband services are introduced.

The good news for buyers is that all the manufacturers agree hardware prices are coming down. Rockwell Collins, for one, said buyers were paying about $500,000 for previous-generation Swift64 hardware but will pay half that for its forthcoming SAT-2100 high-speed-data satcom system. Antennas add to the price, but current Swift64 antennas will work with SwiftBroadband without the need for modification, makers have said. Satcom antenna manufacturers include EMS Satcom, Chelton and CMC Electronics.

Airborne Cellphone Concept Questioned

Representatives from AeroMobile and OnAir, the two would-be competitors in the race to provide airborne cellphone services to passengers, provided progress updates at the conference, but there seemed to be more skepticism than excitement swirling around the concepts.

As envisioned, airliners and business aircraft would be fitted with special equipment known as pico cells. Essentially a miniature cellphone tower installed in the avionics compartment or elsewhere on board the aircraft, the pico cell would communicate with passengers’ cellular phones, instructing them to revert to their lowest power settings to ensure callers’ signals do not interfere with avionics. Users could then place and receive calls, which would be routed via the satcom antenna on the airplane to the Inmarsat I-4 satellites above.

There are a number of hurdles that must be overcome before such services can become a reality. In the U.S., both the FCC and FAA take a dim view of cellphone use on aircraft, but the regulatory wheels of change appear to be turning, if slowly. Some airline executives surely view such services as a potential untapped revenue source, bringing a cash windfall to help stem losses or supplement gains. But several experts at the Inmarsat conference voiced caution that airborne cellphone calling might prove no more profitable for airlines and service providers than other well known industry failures.

From the litany of negative comments about airborne cellphone services, key ideas kept rearing their heads. First, the reason cellphones are ubiquitous today is that they are so inexpensive to own. And now, companies such as Europe’s Vodaphone are slashing country-to-country roaming rates. Yet the providers of airborne cell services say calls would cost at least $3.50 a minute, in addition to whatever the caller’s cellphone company decides to tack on as a premium. Callers would have no idea what they were being charged in flight, but they would know talk in the air does not come cheap.

Second, if business travelers have cheap and ready access to e-mail and text messaging through onboard data services, do they really need to make a call?

Nobody can pretend to know how the future of airborne cellphone calling will play out, but if the airlines make it work then business aviation passengers will reap the benefits. As things stand now, both AeroMobile an OnAir say they will focus on the airline market first. Dan Reed, vice president of product strategy for Thales, pointed out that as today’s kids become tomorrow’s business travelers, they will expect to be connected to the Internet and use their cellphones in flight. Still, he cautioned that airlines shouldn’t be too quick to assume they will make any money by offering such services.

Presenting what he referred to as his own “Theory of the IFE Product Curve,” Reed said there are six stages to any new “big” idea related to in-flight entertainment. The first is the idea phase, when someone comes up with something he thinks everybody will want; the second is the “I got it too phase,” when competitors promise they’ll offer the same thing, only better; the third is the “I gotta have it phase,” when airlines all say they want it; the fourth is the “die trying” phase, when a few of the would-be market entrants go out of business before they ever get their product or service into the market; the fifth phase is the peak, when airlines spend a ton of money installing hardware and everybody is feeling good; and the last is when the idea more or less flops and the airlines and service providers must face reality.

Reed gave a number of examples of areas where he said his theory applies, including seat-back telephones, pay-per-view video-on-demand service and in-flight gambling. Where data connectivity is concerned, Reed says the industry is approaching the “I gotta have it phase,” when airlines say they will buy and install it across their fleets.

The peak, he said, will be after a few competitors have disappeared and the ones remaining have sold and installed high-speed-data satcom equipment for thousands of airliners. Only then will the industry reach the inevitable plateau phase, Reed said. What that looks like no one can be sure, but he suggested that passengers might not be willing to pay for access to data.

If such a scenario plays out, will frustrated airline executives eventually cave in and decide they have to offer data services for free? And what if nobody uses airborne cellular services? If nothing else, Reed said, it will be interesting to see if history indeed repeats itself.