Saturday, May 1, 2004
Still a Niche for Narrowband
In the connectivty competition between broadband and narrowband, it once appeared that the former might soon overtake the latter service. But now they are advancing in parallel.
Once viewed as competitors, broadband and narrowband connectivity for e-mail and Internet access now are advancing in parallel. As broadband service is scheduled to begin this spring and narrowband service is being offered on a growing number of airlines, it now appears that both types of service will not only survive, but flourish. Airlines view connectivity in the cabin as a way to regain business travel revenues, which slumped after 9-11. And in-flight entertainment (IFE) providers—also hard hit by 9-11 and the industry slump—have found that airlines value connectivity in both forward-fitted and retrofitted IFE systems. Almost all of the new IFE systems support broadband and narrowband connectivity.
"In the commercial aircraft market, broadband is going to appeal to one or more of these market segments, and narrowband to others," says Alan Pellegrini, senior vice president of marketing and operations for Matsushita Avionics Systems Corp., the leading IFE provider. "It is a divided market because the services are positioned so differently from an up-front cost perspective."
Cost is the differentiator. "You can give passengers 80 percent of what they need for 10 percent of the price," says John Wade, comparing the broadband and narrowband services available. Wade is Tenzing Communication's executive vice president for strategic planning and business development. "We don't see applications needing more than 64 kilobits per second," he adds, referring to the capacity of Inmarsat's Swift64 satellite communications service.
Eventually, perhaps as long as "20 years in the future," the cost of broadband will be comparable to that of a narrowband service, says Wade. To do so, it must cost the passenger little more than the $10-per-flight fee that narrowband could allow, according to the Tenzing vice president.
Connexion by Boeing, with its high-speed broadband service, and Tenzing Communications, with its narrowband e-mail and short messaging service (SMS) are the prime Internet service providers (ISPs). But other players, such as ARINC and SITA, have entered the arena, providing air-to-ground data links.
Broadband Moves Ahead
Despite some minor scheduling setbacks, two European airlines plan to offer Connexion by Boeing's broadband service this year. Lufthansa, which calls the service FlyNet, is "well on track" to offer it to passengers this spring, according to Burkard Wigger, general manager of the project. The German authority, LBA, has certified the installation, which the German airline began in January on an Airbus A340, Wigger says.
SAS, which also plans to offer wireless broadband, has delayed the start of its service, originally scheduled for April 2004, says SAS spokesperson Pia Forsstrom. Installation is now to begin in late October 2004. SAS anticipates few snags in the installation's approval, since Lufthansa has blazed a certification trail with its A340.
Asian customers also have signed up for the Connexion broadband system. Japan Airlines plans to start equipping its long-haul fleet of 68 aircraft this year, and All Nippon Airways (ANA) signed a definitive agreement for the service in January. Kingdom Holding Co. of Dubai selected the Connexion system for its B747 aircraft, with service to begin next year. And China Airlines (CAL) inked a letter of intent to install the systems on the Taipei carrier's long-haul 747-400s and A340 aircraft.
To date, however, no U.S. carrier has signed up for the broadband service, which is expected to cost passengers $25 to $35 per eight-hour flight.
Exploiting its lower-cost narrowband connectivity service, which offers e-mail and SMS, Tenzing has expanded its U.S. customer base. United Airlines and Continental Airlines now use the Tenzing/Verizon Airfone service, called JetConnect, on their domestic fleets (September 2003, page 28). And US Airways recently signed a contract to offer JetConnect on its 80 Airfone-equipped Airbus aircraft, which are fitted with power ports at every seat.
Aircraft flown by the three airlines are or will be offering the JetConnect service, which costs passengers $15.98 per flight for e-mail and SMS access. There is no additional per-message cost. Although passengers currently are limited to sending messages of up to 150 characters to any mobile phone, they soon will be able to receive these messages, as well.
"We still feel that about 85 percent of passengers want e-mail capability, not Web surfing," says Wade. "Even when broadband emerges, people will want to have a choice of price. We see ourselves as being able to provide that choice, in terms of services they use."
Tenzing systems continue to sell well in the overseas marketplace, too. Cathay Pacific has nearly completed installing the system on its fleet of 69 aircraft. Passengers will be able to receive and send e-mail via their laptops, as they do on the U.S. carriers.
On Virgin Atlantic, passengers use Tenzing's system with Matsushita's IFE seatback video screens. Iberia and Northwest Airlines employ similar, seatback systems.
Airbus and Tenzing
Tenzing is working with Airbus and Emirates airline on the factory installation of 802.11b Wi-Fi (wireless fidelity) connectivity on the Dubai-based carrier's fleet of new A340-500s. This is the "first commitment to doing a wireless [commercial airline] cabin for Tenzing," Wade says. Access for e-mail will be in near-real time—about a 10-minute delay, he adds.
"Airbus has had a vision to have line-fit delivery [of new aircraft] with wireless connectivity capability aboard," says Wade. The Dubai-based airline planned to launch the new feature in the first quarter of 2004, claiming that it will offer its passengers "the world's first WiFi laptop service in regularly scheduled commercial aviation."
The carrier says the wireless system will be offered along with the seatback e-mail and SMS service already available on Emirates A340-500s for passengers who don't have laptops. "Travelers with laptops can choose between hooking up via the RJ11 dial-up method or the simpler 802.11b wireless method," says an Emirates official. The charge for seatback e-mail and SMS features is $1 per message. Usage fees for the new wireless system will be announced closer to the launch date.
Wade says that Tenzing, which is partly owned by Airbus, is "actively involved in discussions on the new A380. We obviously intend to be part of the connectivity services on that aircraft. It's too early to be specific about what [these services] will be."
While it was reported a year ago that Tenzing had dropped plans to include real-time Web access for customers, Wade implies that the company has not given up its intent to offer broadband connectivity in the future. "We have always said broadband would emerge over time, at the point where it is economically sustainable—although we still remain somewhat skeptical about the viability of global broadband. We are actually dealing with broadband alternatives and are seeing some very interesting possibilities emerging."
All three major IFE manufacturers support connectivity in their new entertainment systems. Industry leader Matsushita, whose market share has grown despite the industry recession, offers seatback connectivity via Tenzing and Connexion.
"Our role is to be the onboard local area network [LAN] for airlines that might be using our entertainment system [in conjunction] with Connexion by Boeing or Tenzing or alternative providers, including ARINC, says Pellegrini. "We have customers for each of those configurations." He adds that Matsushita is working with Connexion for a Japanese carrier and with Tenzing for Emirates airline.
The launch customer for Matsushita's new eFX system is Song, Delta Airlines' new low-cost service provider. Song is installing the IFE system—which offers live satellite broadcast TV—on all 36 of its Boeing 757s. The all-digital eFX systems have the capability to offer connectivity, but the carrier has not yet decided whether or when to offer it, an airline spokesperson says.
Matsushita also offers an alternative, low-cost connectivity service of its own, called InFlight Communicator, in which passengers use seatback displays and handsets to compose e-mail or short messages. The company has five customers, including Virgin Atlantic and Iberia. This service makes use of communications satellites, such as Inmarsat's, and ARINC's or SITA's air-to-ground data link network.
InFlight Communicator is not a replacement for passengers who want to access their own e-mail files with a laptop. It offers basic messaging without adding any additional equipment, Pellegrini says. The system works with either Matsushita's System 3000 (S3K) flagship widebody product—flown in more than 300 aircraft—or the newer eFX. The company plans to offer its latest product, eX2, in 2006 for the A380. The eX2, which will be digital with an Ethernet-based backbone, also targets the Boeing 7E7.
Rockwell Collins' new eTES entertainment system links to Tenzing or Connexion via an Ethernet port. Collins has received 150 orders for the system, which is flying on two airlines and being installed on a third.
Connexion's broadband system would take advantage of eTES' very high bandwidth, says Christine Kunkle, principal manager of cabin systems marketing for Collins' passenger systems business unit. The system enables connectivity via a seatback display or to a personal laptop.
Collins' older TES product can provide connectivity over a phone line, similar to the Tenzing/Airfone service. But no customers have ordered this option.
Last fall Collins also announced a partnership with Connexion to offer broadband connectivity for business jets.
Meanwhile the third major IFE player, Thales Avionics, is working closely with Connexion by Boeing to provide Ethernet laptop connectivity via its i-Series 1000 entertainment system scheduled for use on Japan Airlines. In addition, Thales' i2000 overhead video system, i3000 in-seat broadcast video system and i4000 video-on-demand system also offer the i1000 communication connectivity function, in conjunction with an ISP provider, according to Thales spokesperson Lori Krans. "At every level we offer the connectivity solution," she says. " Our system was initially designed more around connectivity as its very basic level, rather than entertainment."
Some 50 of the new iSeries systems are in use. My Travel, Middle East Airlines and Royal Brunei are the first three airlines to install the iSeries systems. JAL aircraft are about to fly with this system.
While not an Internet service provider, ARINC has partnered with Tenzing and Matsushita to provide e-mail and SMS service for Iberia Airlines' fleet of long-haul aircraft, including its new A340-600s. Text messages composed on the Matsushita System 3000 IFE screens are sent in near real time over ARINC's satellite network. On the ground, Tenzing's message switching (or message routing) center delivers messages to recipients' e-mail addresses or to GSM cell phones with text capability in as little as 15 seconds, ARINC claims. ARINC expected to add reply capability soon, company officials say. The cost is $2.10 per message.
"With Iberia, ARINC is the systems integrator and service provider, offering short e-mail and SMS," says Greg Oliveau, ARINC's regional director for the Mediterranean. "We brought in Tenzing and Matsushita software, and ARINC provides air-to-ground connectivity through Inmarsat satellites. Iberia will be the first airline in Europe to have both send and reply message capability."
Tenzing also has announced an agreement with Iberia to install "high-speed" e-mail and instant messaging services in business class on the carrier's A340-600s and -300s, starting in October. The service, provided in conjunction with ARINC, delivers e-mail from the ground with no delay, Wade says.
Along with Tenzing, ARINC also is involved in SMS messaging provided through Inmarsat satellite relay on Virgin Atlantic and Northwest Airlines.
On the broadband side, ARINC has delivered the first two production units of its SKYLink system for corporate aviation to its launch customer, Gulfstream Aerospace, which is provisioning some G450s and G550s. The Annapolis, Md., company also is working with Cessna to finalize an agreement on the use of SKYLink on new and aftermarket Citation X aircraft. The satellite-based service was expected to commence in late March.