Malcolm McMaster, president of Globecomm Maritime, argues there’s more than just price when it comes to picking a network vendor.
In common with other sectors of the shipping industry, suppliers of maritime communication services have felt their share of pain during the near-decade long slump in vessel earnings. For some, the answer has been to retrench, for others to consolidate, but despite these trends, the number of providers in the market remains as high as ever.
A combination of low barriers to entry and a diverse maritime market has traditionally seen a large number of providers competing in the market. As a result, while headline $/MB costs to end users have fallen, the ability of these providers to deliver on a sustainable basis is coming into question.
The delivery of satellite communications these days extends across ship and shore all the way to the boardroom. Issues of which network to choose, what it will deliver, how secure it will be and how to manage business and crew channels mean this is a conversation in which price is just one component.
We think the issue is so important that we’ve put together a list of the top five questions a potential buyer should ask any vendor of communications services. While no two shipping companies are exactly alike, these questions provide a foundation for understanding whether or not you should be doing business with that company.
1. How secure are your provider’s operations – can they help protect your assets from cyber threats?
Cyber security is not hype, not a new Y2K, or just an excuse to buy more services and all owners and managers need to be aware of the threats to their business and take steps to protect themselves. BIMCO has produced industry guidelines that cover ship and shore side operations but buyers should be aware that the weak links in your defences are as likely to be human as digital. Your service provider should be able to mitigate cyber risk by hardening your defences, managing the threats from hacking and conventional virus attacks. They must also convince you that they have a cyber strategy and have put it into practice.
2. Can your provider segment, prioritise and manage crew access without intervention from ship or shore?
Crew communications makes good business sense – but is a more complex subject than it appears. As the evidence from multiple surveys and research shows, crew increasingly see the provision of internet access as a deciding factor in their choice of employer. The rapid expansion of crew services – both connectivity and content – presents a real challenge for the master, owner, manager and superintendent. Access needs to be hands-off for the master but subject to priority controls for business traffic. It should be Wi-Fi-enabled for privacy and accessible via a dedicated App. It should be separate from the ship’s data plan so that crew can manage their own accounts, regardless of whether the shipowner or the crewman is paying.
3. Does your vendor offer a blend of connectivity and hardware services at a range of price points?
A common complaint from shipowners is that the cost of satellite communications is too high and the response of the network operators is that the cost per bit has never been lower. The truth lies somewhere in between. VSAT can be a game-changer but don’t assume that bigger is always better.
Paying the right amount for your business communications means understanding clearly what you want to achieve and which system can best deliver it. VSAT certainly provides an upgrade from L-Band systems but be sure of what you are getting – and whether you really need it.
4. What is your vendor’s business model?
The provision of satcoms services to ships is a challenging market to be in right now and the impact of market conditions is being felt by all providers. That makes it more important than ever to undertake due diligence to ensure their financial viability. There are a lot of vendors in maritime – especially in VSAT – and it makes no sense to risk upfront investment in three to five years of equipment leasing if you have any doubts about their sustainability. If packages offering hardware, connectivity, installation, content and support at very low prices sound too good to be true, then apply common sense. As communications become more mission-critical, the importance of support increases. Low costs quickly become high if the vessel misses a change of orders so support must be 24x7x365 and multi-lingual.
5. Does your supplier have a crystal ball – or just their fingers crossed?
There is understandable excitement about the approaching wave of new communications technologies and the potential they offer for new applications and ways of working. As HTS services start to become available they bring a fresh perspective to the questions that every buyer should be asking their provider about bandwidth, speed and capacity. How much of each of these you will need for your business and crew is likely to change over time. Shipowners have much to consider when planning how to get from the present to the ‘future of shipping’, including whether their connectivity provider is committed to the market for the long term.
The Globecomm Maritime position has always been consistent; we are technology agnostic, a neutral provider of the networks and services that best fit our customers’ needs. That may not always be the cheapest available – and it may not be the most expensive – but our experience shows that when prices are too low, buyers understand that the risks can outweigh the benefits. Caveat emptor always applies.
No shipowner or manager is obliged to buy from Globecomm or any other provider, but we do recommend you ask your vendor the questions outlined above. And if they can’t provide you with a convincing response, we would be delighted to answer them for you.