How Will SpaceX Affect Satellite Tech Evolution and Network Adoption for Cruises?

We are approaching a point of no return regarding satellite evolution for cruise ships.

Following Elon Musk’s announcement of the availability of their Starlink service for cruise ships, and the launch of hundreds of SpaceX satellites into lower earth orbit (LEO), the landscape has changed dramatically.

SpaceX promises IP networks with exceptionally low latency and 350 Mbps download rates.

Traditionally, a cruise line might spend hundreds of thousands to millions of dollars on satellites for slow at-sea internet connections. In fact, maritime communication firms renting bandwidth can essentially charge whatever they want.

However, with a $10,000 one-time equipment investment and a $5,000 monthly fee for each of the two Starlink terminals, cruise ships can now drastically reduce their expenditures for a speedier service.

The fact is, businesses now require additional bandwidth to enable remote work, Internet of Things (IoT) devices, and other applications. Furthermore, consumers prefer high-speed, low-latency connectivity and expect it in all areas.

Even governments worldwide are stepping up their efforts to deliver low-latency satellite communication in addition to these developments, especially in underdeveloped regions.

Although many Starlink customers also reside in cities and other areas with a good connection, the company's reported primary goal is to connect communities that currently lack internet access or have inadequate connectivity.

While it’s clear that SpaceX will force other satellite providers to speed up their tech development, less is known about how it will affect an industry such as cruise lines.

The State of the Different Satellite Players

Previously, geostationary satellites (GSOs) dominated the sky at 36,000 kilometers above the Earth. Now, non-geostationary satellites (NGSOs) move across the sky during their orbit around the Earth at a much shorter distance, offering significant advantages for expanding broadband coverage.

Up until now, "traditional" satellite communication service providers have concentrated on NGSO systems in-house that enhance their geostationary orbit (GEO) capabilities, while they contract out the building and deployment of the space portion.

For instance, Telesat wants to launch 188 LEO satellites—they have agreements with producers of their spacecraft and mission payloads, including Blue Origin, and they are expected to contract out the production of ground equipment as well.

More than 40% of all active satellites in Earth's orbit are operated by Starlink, which is in the early stages of operations and already has several paying clients. Additionally, OneWeb's initial constellation deployment is almost done.

Elsewhere, with regard to their respective strategies for NGSO broadband, Telesat and Amazon's Project Kuiper are moving forward. In fact, Amazon signed the largest collection of launch contracts ever in April 2022 to deploy its satellites.

Historically, satellite service providers have negotiated connectivity agreements with enterprise clients, such as cruise ships, on an individual basis, with access and airtime varied.

These contracts frequently come with hefty extra expenses, including the cost of outfitting a fleet of ships or planes with the proper antennae.

Although it is unknown exactly what these services would cost, new-generation NGSO operators are keen on serving commercial clients and may present competitive contracts such as the Starlink offer mentioned above.

A Question of Coverage

The big question for satellite operators is whether they can connect enough users to cover the costs of operating the system, growing and maintaining the ground component, and continuously refueling and updating the space part.

Satellite operators, particularly those with NGSO constellations, will strive to offer global coverage to attract as many subscribers as possible. This is one of the big stalling points with Starlink.

The service is currently only available in coastal waters of the USA (apart from Alaska), Europe (apart from most of Norway, Sweden, and Finland), Australia, Brazil, Chile, and New Zealand.

According to SpaceX, they will gradually roll out the service to new regions in the fourth quarter of 2022.

This is what Inmarsat has pointed out when discussing SpaceX and other newer provider’s developments:

“When you look at some of our competitors, particularly the ones you call new entrants (SpaceX and OneWeb), they simply aren't well-positioned to meet the market needs—it's tough to provide that kind of coverage. The first-generation LEO constellation operators don’t have the wherewithal to deliver the security and resilience that customers need.”

Cruise ship companies will keep a close eye on the coverage predicament. Because even with vastly superior download speeds, if coverage is an issue, then cruise lines may want to stick with potentially more reliable providers.

Other Factors to Influence Cruise Line Decision-Making

Since the aforementioned July satellite launch from SpaceX, many cruise ships have already switched to using Starlink.

One company stated that by utilizing geostationary satellite internet (VSAT) in conjunction with Starlink, latency was decreased by 95%, and expenditures were reduced by 70%.

This is a huge coup for a business like a cruise ship—with the unenviable task of keeping customers entertained for as many as two weeks, the entertainment and communication options from a low-latency network are endless.

Cruise ships also have to consider their platform connectivity to enable uninterrupted coverage. They have historically used gyroscopic satellites, which must calibrate the signal every time they move, similar to how airplanes do.

To exchange data, a ship must also be in a direct "line of sight" with a satellite, which isn't always the case. Cruise ships traveling through the Alaskan coastal regions, for instance, may face satellite signal loss due to the surrounding mountains' height.

Starlink’s laser technology would stop the need for constant recalibration. According to a tweet from Elon Musk, “Laser links in orbit can reduce long-distance latency by as much as 50%, due to higher speed of light in vacuum & shorter path than undersea fiber.”

The last consideration for cruise ships is the potential regulation of services, rates, and access to satellite connectivity. Although future developments are unpredictable, there is a chance that internet connection will be handled similarly to other utilities in terms of regulation.

This suggests that cruise lines seeking to prosper in the NGSO internet market would gain from carefully observing actions taken by the executive and judicial branches of government.

Without a doubt, the low-latency internet service provided by Starlink Maritime for cruise ships has the potential to revolutionize the industry.

Customers on cruise ships will be able to engage in activities like buffer-free video streaming or phoning loved ones, which are only possible with fast download rates.

To compete over the coming years, other providers must significantly boost their satellite LEO output or use similar technologies to Starlink Maritime.

The only real point of contention remains the coverage for some cruise routes. If Starlink increases its capacity to provide connectivity for seas across the globe, while convincing governments to allow their expansion, it might spell a new wave of domination in the market of satellite providers for cruise ships and elsewhere.