Tag Archive for: COVID-19

Satellite Plays a Role Over recent months we have seen a global crisis on a scale most of us have simply never witnessed before. The impact on individual lives has been vast as has the impact on businesses large and small across the entire world. Many businesses have moved to remote working, which in many cases has caused a challenge, ensuring everyone is set up ready to keep working as if they are in the office.

The Impact on Satellite

The satellite industry has also been impacted by the current pandemic. Despite SpaceX moving forward with two Starlink launches undeterred, many launches are being postponed, including Rocket Lab. Even a SpaceX launch has been postponed due to travel restrictions. It is not just launches being affected. Many satellite companies are closing factories amidst the outbreak. For example, NASA has stopped work on the James Webb Space Telescope that was due to be launched next year. Airbus also suspended production in its facilities in both France and Spain.

Naturally we are starting to see the knock-on effect from all of this with the first victim OneWeb, which recently filed for bankruptcy citing the corona virus pandemic as a factor. It is worrying times and I sincerely hope this is not the first of many.

The Role of Satellite

Despite all of the challenges, satellites have a vital role to play in combating the impact of the virus for a number of reasons.

Getting the picture: Throughout the pandemic, satellite imagery has been relied upon to show the scale of effects of the lock downs in various countries. With the corona virus dominating news headlines, these images have a high level of human interest. And it is not surprising when you look at deserted tourist hotspots and empty airports. Satellite Plays a Role

The other side of course is the satellite imagery being used to show the effects on pollution levels. Readings from ESA’s Sentinel-5P satellite show a decided drop in levels of nitrogen dioxide over Asia and Europe. It is thought that air pollution has already decreased and will likely reduce further as global lock downs continue. Being able to prove the effects with satellite imagery may help encourage people to rethink habits post lock down in an attempt to keep those levels down as much as possible. After all, an image paints a thousand words.

Keeping the seas connected: According to Inmarsat, since the outbreak of corona virus, demand for seafarer communications has risen sharply. This is natural when you consider the concern people have for their families and loved ones. When isolated at sea, being able to regularly connect friends and family on shore to ensure their safety is greatly heightened during a global crisis such as this. Of course, there have also been a number of cases of boats stuck at sea because of cases on board, leading to a great deal of concern both from the people on board and their relatives waiting on shore. As well as people on board looking to stay connected with families, those connections have been relied upon to keep the rest of the world up-to-date with the current situation.

Satellite is Vital to Ensuring Connectivity

Mobile and broadband connections have been under more pressure than ever before. With much of the world working remotely, we suddenly have a whole host of separate connections with people trying to work as normal. Of course, this also increases mobile phone usage, where many employees would ordinarily be using landline phones in the office to conduct calls. If a few companies moved to remote working the effect would be minimal. With all companies that are able to follow this protocol all across the world, the impact is considerable and that may make the networks groan under the pressure.

How can satellite help? Over recent years there has been much discussion around re-allocating satellite spectrum. More recently this has become a hotly contested issue. However, right now offering up some of that spectrum, even temporarily, could be critical for keeping those networks going. In fact, DISH Network is already providing its entire portfolio of 600 MHz spectrum to T-Mobile at no cost for 60 days. It will be interesting to see if others follow suit to come to the rescue.

An Uncertain Future

As with all industries right now, the future is undoubtedly uncertain. The economic impact of this virus is likely to be wide-reaching. However, what is clear is that satellite has an important role in navigating some of the challenges it is causing right now and we, as an industry, need to do our best to fulfill that role to help the bigger picture. Satellite Plays a Role

For those in the In-Flight Connectivity (IFC) value chain, one of the first priorities related to dealing with the COVID-19 pandemic is how to deal with existing contracts that in almost all cases have been voided connected aircraft are grounded. Most, if not all, airlines are unlikely to be in a position to pay even the smallest portion of the contracted IFC fees without planes in the air and with very little room for negotiation. This will very quickly hit service providers, especially those that have ongoing fees to pay to capacity owners. Post-Pandemic, the Need for Connectivity

Even if the spread of COVID-19 is brought under control in the coming weeks, it is difficult to envision air travel demand returning to normal in 2020. We’re not talking about a short-term fix, but instead looking at renewed terms between all parties, perhaps an alternative approach to the long-term business model, and the possibility of vendors collapsing under the financial burden.

Stalled or Reduced Installation Programs

In the medium term, we must consider what the new commercial active fleet will look like. The fact airlines around the world are now the subject of sizable government bailouts suggests we could see the vast majority survive long enough to see passenger demand return. But events like the 2008 global financial crisis also suggest we should expect to see airlines using the downturn in demand to retire aircraft early and slim down fleets.

On top of this, the significant cost control measures now in place will almost certainly affect IFC retrofit programs throughout 2020 and will likely lead to delays, or the complete cancellation, of aircraft on order that are also ring fenced to have IFC hardware equipped at the factory.

In summary, what remains of the industry once all of this is over will more than likely be reduced versus the active fleet at the end of 2019. This in turn will impact IFC service providers, several of which have built sizable backlogs, through delays/reductions to installation programs or potentially cancelling them all together.Post-Pandemic, the Need for Connectivity

Airlines Remain on the Fence 

In the longer-term, a combination of prolonged cost cutting and the broader uncertainty that COVID-19 generates within the IFC supply chain could lead to implications for IFC adoption. Both factors represent significant change from the status quo and could justifiably lead airlines that are either in active negotiations around IFC implementation or were considering putting out an RFP, to push back the decision-making process until more certainty returns.

To help stimulate demand, what we could now see is the emergence of increased flexibility, in a number of areas linked to the provision of IFC. This could be an acceleration in the adoption of open industry standards to help keep services switched on if specific vendors do go under, or if contract terms become unmanageable. It could also be greater flexibility in the business models agreed between capacity owners, service providers and airlines, with a greater share of ancillary revenue opportunities provided to those at the top of the chain.

The Need to be Connected Isn’t Going Away

So, is there a silver lining in all of this? I think so, and it comes down to our need to be connected. Sure, the existing business model is far from ideal, but this need to be connected everywhere was enough to encourage airlines of all sizes to activate Wi-Fi services and this demand will still be there when things get back to some level of normality.

There is even a case for self-isolation to be seen as an accelerator of the trend toward increased connectivity. In March 2020 alone:

  • Verizon has reported a 75% increase in gaming traffic in just one week.
  • Online shoppers have increased by 80% year-on-year in Brazil, 45% in Australia, 32% in France and 29% in Italy according to the Financial Times.
  • Disney+ is just one of the Over-the-Top (OTT) suppliers reporting increased subscriber numbers, with U.S. numbers tripling across a two-day period.
  • Teleconferencing app, Zoom added 20 million mobile users in one week, according to Sensor Tower.

Whilst for many, this change in behavior may only be temporary, some are likely to alter the way they view and partake in online activity forever, both socially and for work. There is every reason to suggest this change in behavior could lead to increased use of IFC, either as improved take rates or demand for bandwidth. This should be something for the IFC value chain, whatever that looks like by the time demand does eventually return, to remain focused on and prepare for.Post-Pandemic, the Need for Connectivity