Teekay to trial Connexion by Boeing
http://www.connexionbyboeing.com
2nd edit

Tanker shipping major Teekay has agreed to launch a maritime trial of the Connexion by Boeing ship-shore communications service over the North Atlantic only.

Connexion by Boeing is aiming to provide a global satellite data communications service by leasing global satellite power in the Ku band, for both ships and planes. 

Boeing currently promises a global satellite communications service for the maritime industry with 2.5 mpds to the vessel and 256 kbps from the vessel, by 2006. 

The size of the Boeing maritime antenna has not been revealed but Boeing has hinted that it may be as small as 0.6m, compared to a typical 2.4m antenna size for broadband VSAT.


SUBHEAD
The business plan

Connexion by Boeing freely admits that its business plan is to target Inmarsat's customer base specifically, offering a global high speed satellite communications service. 

Boeing is not announcing specifically how much it is investing in Connexion by Boeing - although it is certainly an enormous amount of money. 

In its first quarter 2004 results, it notes that a business segment labelled "other" lost $100m during the quarter, although its revenues were $134m. 

"The other segment consists primarily of the Connexion by Boeing and Boeing Technology units, as well as certain results related to the consolidation of all business units," the company states.

"For the first quarter, losses from operations [in the "other" segment] were $104 million, slightly lower than the first quarter of 2003 as a result of higher spending on Connexion by Boeing more than offset by reduced customer-financing charges."

Although airlines Korean Air, China Airlines, British Airways, Alaska Airlines, Japan Airlines, All Nippon Airways, Scandinavian Airlines and Lufthansa have issued various statements of intent to use the service and conducted various trials, so far there is only one actual customer, Lufthansa, using the service to provide internet access for customers flying between Munich and Los Angeles, and Munich and Narita (Japan). More routes are promised this year.  

The aviation pricing model is $14.95 for flights under 3 hours, $19.95 for flights 3 to 6 hours, and $29.95 for flights over 6 hours. Alternatively users can pay $7.95 or $9.95 initial fee (for flights under or over 3 hours) covering the first 30 minutes, and subsequently $0.25 per minute. 


SUBHEAD
Questions for Boeing

There are some big questions for Boeing. The first is whether it can raise enough revenue from the maritime and aviation sector to cover the enormous costs of leasing global Ku band satellite airtime, will be required if it is to offer the maritime industry a global service and compete with Inmarsat.

Industry sources have hinted that Inmarsat's aviation terminals should be much lighter than Boeing's and have less drag on the aeroplane (an important factor in the aviation industry) and have better contact with the satellite when the aeroplane is in extreme northerly or southerly parts of the globe. 

However Ku band satellites, as utilised by Connexion by Boeing, can carry ten times as much data than the L band satellites used by Inmarsat for the same satellite expense, industry sources say.

Will the aviation industry prefer a lighter Inmarsat antenna, but with higher communication costs (passed onto the passenger), or a heavier Boeing antenna, with possible impact in higher fuel costs and aeroplane drag, but lower communication costs?

For shipping companies to make a serious commitment to Boeing they will need to be persuaded that the venture has a long term future, which means they will need to examine how well it is doing in the aviation arena.

For the moment however, many shipping companies will be delighted to see Inmarsat having a major commercial rival promising to offer global satellite communications at high bandwidth, forcing down the communications costs. 


SUBHEAD
Regulatory issues

In December 2001, Connexion by Boeing was granted a license by the US Federal Communications Commission (FCC) to provide internet access, television and e-mail to commercial aeroplanes and executive jets above US territory and waters. 

In July 2002, the government of Germany authorised Boeing to use range of radio frequencies for its aviation services, quickly followed by the UK. 

This acceptance from the UK, US and Germany opened the way to using the service in the North Atlantic. 

Boeing has a team of people working full time on obtaining regulatory approvals; the shipboard terminals meet the requirements of International Radio Regulations Resolution 902 for Earth Stations on Vessels (ESVs).