Friday, November 21, 2014
The Key to Connectivity: SmartSky Networks Partnerships, Technology Bolster Market Confidence
[Avionics Today 11-21-2014] SmartSky Networks, the engineers of an up-and-coming aviation communications network, has announced SatCom Direct as the exclusive business aviation service provider for the network when it comes available in 2016. SmartSky positioned itself as a main competitor for current connectivity top dog GoGo at NBAA last month when it announced its entry into the market alongside claims its network can deliver seamless connectivity at 10 times the speed of current providers through a 60 MHz spectrum.
|Passengers using SmartSky Networks network in flight. Photo: SmartSky|
The company won’t reveal how they plan to offer the massive spectrum for the 4G LTE network just yet, but SmartSky chairman and CEO Haynes Griffin credits both technology and market partnerships in what he sees as the company’s eventual success.
“On the business model side this is very different from the traditional cellular model,” Griffin said in an interview with Avionics Magazine. “It’s a more complex business, which is why we not only have strong players on our management team, but we started back at the beginning to bring in industry leaders as our partners.”
These partners include Textron Aviation, Duncan Aviation, ICG, Harris Corp., DAC International and SatCom Direct. The latter will provide satellite capabilities such as linking the SmartSky network with their next-generation aircraft router allowing the use of multiple satellite connections and simplifying cabin communications.
“Once the system installation is complete [SatCom Direct] will take the hand off on customer activation and customer service, which are things they are currently doing on their own account already and that they do extremely well,” said Griffin, who notes that these types of services are ones that the company could easily have developed internally, but wanted to take advantage of the customer relationships already in place at SatCom, much like with their other partners.
But even with a network of experienced partners the industry presents challenges. AT&T’s recent pull out of the connectivity market draws attention to the difficulties of bringing reliable and affordable Internet and cellular services to the skies.
“The SmartSky announcements highlight the attractive opportunity in aviation broadband, but the AT&T announcement highlights the lesser appreciated fact, in our view, that deploying a network and providing a quality service is more challenging than is widely appreciated, which is the foundation of Gogo’s competitive position,” said Andrew Spinola, vice president at Wells Fargo Securities, who notes that Gogo is still the uncontested major player in the IFC sector. Some speculate that AT&T’s decision to drop the connected aircraft side of operations had much to do with a lack of understanding when it came to the difficulties of entering the industry; difficulties that include navigating a global operation as well as a simple lack of technology in the IFC field.
“It’s true for dead certainty that building a network to cover a three dimensional space as opposed to a two-dimensional space in cellular is a much more complex,” said Griffin. “It’s also true that some of these challenges are pretty easy to spot and some are hidden until they trip you up. We recognized all of this when we started on this project, which was over three and a half years ago. We knew there would be challenges to solve, which is in part the reason why our 4G LTE solution has a strong patent component to it.”
Smartsky believes it’s at a point where it can deliver its promised 60 MHz of spectrum to the aviation industry effectively, but even since their announcement a month ago the company has noted the network is evolving in directions they hadn’t previously envisioned. This includes a much faster entry into the commercial market, which they expect to swiftly follow the business launch.
“We originally believed that the commercial aviation segment of our business would lag that of business aviation. But frankly the inherent demand for connectivity that’s out there in the commercial aviation world has pulled our commercial aviation plans forward, and we are now expecting to have early commercial relationships in place not too long after we launch our network,” Griffin said.
The eventual entry into cockpit connectivity is also on the horizon. Griffin says SmartSky isn’t pursuing certification for anything beyond the cabin yet, but those involved see the flight deck as the ultimate goal.
“We’ve always thought that cabin connectivity is the immediate focus of the customer at the moment but that the connectivity to the cockpit and the airframe will ultimately be the most important in the long term,” Griffin said. “Because our connectivity will be very robust in both directions, meaning from the plane to the ground as well as from the ground to the plane, in addition to being a big pipe it will be a two-directional pipe and that will enable, we think, a whole category of applications that are not possible or practical today. Many of them will be cockpit airframe type applications.”
Even with such promises on the horizon, an established web of partners, and secret spectrum technology under their belt, Spinola believes it will take a lot for anyone to compete with the well-established Gogo and that spells good news for customers.
“Business aviation broadband is right now dominated by Gogo,” said Spinola. “We expect additional competition from new participants using either satellite, 14GHz, if it is auctioned, or other solutions like SmartSky. Additional competitors seems highly likely, in our view, and that will likely drive increased competition in the form of improved pricing and service for the end-customer.”