Ferry operator Stena Line has big plans this year for its Wi-Fi services to passengers: the company plans to implement a premium offering as a complement to its free Wi-Fi offering, Raimo Warkki, commercials, ship communication and systems at Stena told Via Satellite in an exclusive interview. Warkki admits, somewhat candidly, that Stena has had lots of complaints regarding poor Wi-Fi performance from its guests. So, naturally, the company is hoping to eliminate these negative customer experiences since the importance of these services is only going to increase.
“[Wi-Fi] is becoming more and more important. There are a lot of business travelers, you have kids that like to be online. It is becoming more and more important — I think it is crucial. People do complain about this when they have a bad service,” he says.
Stena Line has one of Europe's most comprehensive route networks, consisting of 21 strategically located ferry routes across Northern Europe, operating in Scandinavia, the Baltics, the North Sea, and the Irish Sea with a fleet of 35 vessels. Stena Line also owns and operates five ports. Warkki explained that, by adding a premium Wi-Fi experience, customers will have to pay a certain amount of money to use it during their trip. Currently, by operating a free internet services, it can have around 100 passengers using Wi-Fi. This can increase to around 300 users using internet on peak trips and routes in the summer.
New Satellite Options
Warkki is keen to see the developments in satellite technology over the next few years and admits that, while it worked with companies like Telenor Maritime, the new constellations in Low Earth Orbit (LEO) and Mid Earth Orbit (MEO) could make a difference to a company like Stena going forward. He says, as an example, Stena could use Ku-band for business-critical applications and then use LEO for entertainment. So, there could be different ways to use satellite technologies going forward.
“It is kind of similar to what we do today where we use a combination of 3G and then dedicate satellite capacity for our premium Wi-Fi solution, with Ka-band solution from Telenor. So, we are separating the business-critical parts and the entertainment part,” he says.
Warkki believes there will be a need for satellite and encouragingly says that need will only increase; however, Stena may look to use other technologies nearer shore. “On the coastlines, we might use other forms of communications such as radio communications. If someone could come up with effective radio communications that goes out 20 to 30 kilometers from the coast, then this would help a lot,” he says. “There is a need for a complement to satellite in different ways. 3G and 4G is good, but when you are in the summer and you have a lot of customers on board, and you have a lot of small yachts out on the ocean, which takes the capacity, the quality of service goes down. But, satellite will still be the major communication link.”
Stena is testing two ships in the Irish Sea with a new service called “White Space,” which is long-range radio communications providing about 10 to 15 Mbps per ship. Warkki says this is better than what Stena has for satellite and he believes this could be a solution for the Irish Sea. “It needs to get more approvals. We can only use it in the Irish Sea, for example; we can’t use it elsewhere right now. We expect to be using more satellite going forward though,” he adds.
The other factor for a company like Stena to consider is that, with these new constellations, the options via satellite are only going to increase. I asked whether as an end user, he finds this all very confusing, and how he assesses the different options available to a company like Stena. Warkki says satellite companies need to “keep it simple.” Stena has more than 30 ships installed and it needs a solid and trustworthy solution; he underlines the importance of working with major players on the installation and maintenance of the overall system. While new LEO systems are attractive, Warkki seems a little hesitant saying if they could be good solutions in five to 10 years’ time.
However, he admits there have been issues with Ka-band working with Telenor. Also, being locked in proprietary solutions is a big deal for a company like Stena should it look to make widespread changes in the technology it uses.
“We looked at a Ka-band solution from Telenor, but it is only one satellite. So, what happens if that satellite is broken or there are problems. As an example, we can’t close down our communications on ships. There are some demands that we need to fulfil, for example, certain reports to authorities. We need to have a really trustworthy solution,” says Warkki. “At the moment, we can only trust the Ku-band solution. These new solutions need time to mature. All the solutions are proprietary. So, you have Inmarsat, which is proprietary; you have LEO solutions, which are similar. You are locked into one solution. It becomes hard to change; we can’t change 32 ships overnight — we need a solid solution.”
The price of using satellite is still seen as expensive, particularly as Stena looks to justify the business case. “Satellite capacity is still very expensive so even if the price is dropping, it is still expensive. We are talking about giving the customer a minimum experience of 400 Kbps in the premium Wi-Fi. You can calculate the number of customers on board who could potentially use around 10 Mbps via the existing solution. It is a tricky situation; it will get better but it is still far away,” Warkki says.
Return on Investment
For Stena, which doesn’t carry the level of passengers of a big cruise ship operator, the investment into onboard Wi-Fi is expensive, even though it is becoming an expectation. Launching a premium Wi-Fi services is one way of justifying the investment. “You need to look at this as a service that you need to have. We have to have satellite communications; we need to have it to do reporting, we need to have it to communicate with the ship. The baseline is there anyway. But, then we need to add on more capacity for the passenger,” Warkki says. “We calculate that we should have a Return on Investment (ROI) after 18 months of launching this premium Wi-Fi. But it depends on a lot of things. You don’t know what is going to happen with regulation around 3G on a ship, you don’t know if you are able to have different tariffs. There are a lot of different criteria that could have an impact on us. We keep our fingers crossed that nothing is going to change.”
However, one of the issues that Stena faces is the proposition of offering Wi-Fi services on less popular routes making the business case more difficult to justify. The company could look to form partnerships with media companies in order to improve its service offering to customers. “One concern that we have is offering a similar solution to all of our ships. So, there is not necessarily a business case to put a premium Wi-Fi solution on ships with very few passengers. With larger ships, there is a business case,” says Warkki. “We need to see how this will develop. We could then extend with certain partnerships. We are working on ‘digitalization’ projects for some of our ships where we could offer things like movies and we would have a content server on board. We are looking into that kind of concept. It is hard to offer these services unless you have a really quality connection.” VS