Shippers Test Waters for Arctic Transit but Not Seen Driving Big Satcom Growth There

The shipping industry is increasingly testing extended use of Arctic waters as climate change makes them more accessible for longer periods of time, but that likely won't be a big emerging market for satellite nautical connectivity, satellite connectivity experts told us. Bandwidth demands, particularly by cruise ship operators, are skyrocketing.

Climate change, and better access through the Northwest Passage across the top of Canada, or through the North Sea Passage across the top of Russia, can shave thousands of kilometers in shipping, cutting fuel costs and time, said Joshua Flood of Valour Consultancy. The Northwest Passage is open briefly during the summer and the North Sea route in parts of August and September, but there are predictions that by 2040, the North Sea route could be open year-round, he said.

Two major cargo shippers, Maersk and Cosco, have experimented with some Arctic-route transit, Flood said. But maritime shipping operators are more cost-oriented than performance-oriented for connectivity, and they aren't a particularly lucrative potential market, Flood said. Low earth orbit constellations coming online that are explicitly targeting maritime markets, such as OneWeb and Telesat's Lightspeed network, are focused more on the cruise ship industry or offshore energy, he said. Data demands for the nautical passenger segment are such that it "will take whatever they can get," Flood said: "They complain about it -- we want more." He said there might be some increased cruise ship traffic around the Arctic, but it won't substantially drive much bigger data demands in that region. Marlink announced an agreement last month to use more of Intelsat's C- and Ku-band capacity to provide connectivity services for cruise and shipping customers globally.

When Telesat began designing its Lightspeed constellation several years ago, one goal was polar coverage, said Manik Vinnakota, Telesat global product and commercial director, in an interview. Polar coverage lets it target northern Canadian communities, which often lack good connectivity, and enables mobile services such as commercial aviation connectivity and energy exploration for its enterprise customers, he said. About a third of Telesat's capacity will be dedicated to satellites on polar orbits, he said. Lack of polar region coverage is "one big pain point" for geostationary orbit services, as shipping or aviation customers often want global coverage, he said.

Most non-geostationary orbit (NGSO) mega constellations have or are planning some polar orbits, Vinnakota said. He said nautical connectivity, particularly for cruise ships, could drive some increased demand in the Arctic region, but aviation could be a bigger driver as flight traffic between North America and Asia increases. There also could be increased demand for capacity and services aimed at government, with more surveillance of traffic across and through the Arctic, he said.

The pandemic walloped the cruise industry, but its rebound has "accelerated tremendously" and bandwidth demands are up significantly, well eclipsing what they were pre-COVID 19, said Pierre-Jean Beylier, Eutelsat head-connectivity services, this week in a nautical connectivity webinar. The amount of bandwidth being delivered to any given cruise ship "is enormous now," often in excess of 1 Gb, he said. A ship might get that connectivity solely from a satellite or constellation, but in most cases it needs a diversity of satellites from multiple networks, plus some connectivity from terrestrial networks if near shore, he said. He said with passengers' increased use of applications like Zoom, TikTok and Instagram, cruise ships are edging closer and closer to needing symmetrical bandwidth.

Cruise companies increasingly want to be able to share bandwidth among their ships in a dedicated area, instead of having dedicated beams per ship, which creates operational challenges, Beylier said. He said cruise operators are starting to look at NGSO operators and their lower latency. He said the number of modems and access points on ships is increasing, which gives cruise operators options such as multiple operators providing connectivity to a given ship.