Consolidation cuts Owners Choice

Shipaxis Technical Services
Opinion: Consolidation cuts satcoms choice for owners

Consolidation in the maritime satellite communications sector has accelerated in 2017, with the latest deal involving OmniAccess being swallowed up by the owners of Marlink. These mergers and acquisitions mean there are fewer providers of VSAT than there were just two years ago.
This restricts owners’ options for broadband communications at a time when the number of maritime VSAT units are rapidly increasing. But, it provides opportunities for the smaller players to gain market share.
Marlink’s owners Apax Partners signed an agreement last week to acquire a majority stake in OmniAccess, which is a leading provider of VSAT to superyachts. Marlink is a leader in VSAT and IT network management to commercial shipping and passenger ships, but it was not strong in yacht satellite communications.
The combined group supports more than 4,000 VSAT units and generates around US$500M annually. It also operators within seven teleports located in Norway, Spain, Germany, Hawaii, Australia and the US.
Although this merger is complementary, it is likely to see Marlink move its yacht VSAT to OmniAccess and take out passenger ship business, such as the services used by river cruise vessels.
Marlink is also thought to be acquiring the VSAT services of ships currently delivered by an unnamed Benelux-based company, although rumours of such a transaction have not been formally confirmed.
Add to this the acquisitions by Speedcast to become one of the VSAT heavyweights over the last two years, such as its acquisition of Harris Caprock. This is just in Ku and C-band VSAT. Inmarsat has been pushing its Fleet Xpress Ka-band service out to maritime through agreements with some of these VSAT providers to migrate fleets of more than 10,000 ships over to Ka-band.
There have been other acquisitions over the last year or so, such as KVH purchasing Videotel, adding services to VSAT offerings. But in general, consolidation in the sector has removed choice for shipowners.
Some vessel owners like to keep two or even three VSAT suppliers working across their fleets. But with consolidation, this may have to be cut to one supplier in some cases. Although there are savings to be had for having one provider, some owners like the choice and competition.
Which is why there will be opportunities in 2018 for a second tier of VSAT providers to jump up a level and win new orders and grow their market share. As more shipowners consider reaping the benefits of broadband investment they will need a market full of competent and global VSAT providers, which is why we expect to see new players enter the market in 2018.

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