Wale’s words of wisdom

Earlier this month I had a great little chat with IMDC chief executive Wale Adepoju about the in-flight connectivity landscape. He made a number of interesting points, suggesting, for example, that major international carriers need to look at offering both GSM and Wi-Fi connectivity. I don’t want to let the whole month slip by without posting Wale’s comments so here is that interview in a handy Q&A format.

Is Ku-band-based connectivity going to take hold in North America?

“The key thing about Ku-band is that it makes a great spectator sport in the North American market – it’s perceived as Row 44 versus ViaSat while Aircell is winning the business [for its air-to-ground solution]. However, North America is such a small portion of the Ku-band market and it’s [a region] where the airlines don’t want to pay the bill.

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Can service providers in this sector really survive and thrive?

“From a market size perspective, there are really two things that come to bear. The way that Ku-band is being operated now, the cost is a lot lower so all of these companies can survive on small numbers. They can survive and make good business with a fragmented market.

“In reality, though, there will have to be consolidation of service providers. That probably won’t happen until the back end of 2009 or early 2010.”

What is the big challenge for connectivity providers?

“There is a lot of backlog at Boeing and Airbus. Making sure those aircraft in the future are equipped to deal with connectivity is where the main challenge is.”

Do passengers care what form of connectivity they are offered?

“You’re talking to me now on my cell phone, but you’ve been converted on VOIP. I think most customers won’t really know in the future if they have Wi-Fi (via ATG or Ku-band] or GSM/GPRS [over L-band] but the important thing from a provision perspective is to capture the most number of users and to capture the most users in the international market you need to have [both] Wi-Fi and GSM.”

What if an airline only wants to offer one or the other?

“From an economics perspective, you can create what the telecom companies call a ‘coping strategy’. If you’re on a plane in the USA and it has got Wi-Fi only, there are tools that allow you to pick up your voicemail from the laptop after it has been converted into text.


“On the other side of the fence, if you’re on an Emirates airplane [which uses AeroMobile's GSM solution], and you want to pick up your mail, you can access it on your Blackberry. To surf the Internet would be quite expensive. But each technology can do what the other one does. If you are an airline in the international market you’re probably going to want to have both. In 2009, the big step in the international market is in offering of both.”

From a functionality standpoint, how good are current-day broadband systems?

“All the systems in the market at the moment work very well in the right circumstances. Some of them work if you’ve got an airplane full of users. Some of them work better if you’ve got very light users flying over land.”

From a financial standpoint, how tough is it out there for providers?

“Anybody who has to go out and get fresh money in 2009 will struggle, but anybody who is in the industry knows that most of these companies are quite a good bet. The logical conclusion is that there will be an industry investor to save the ones that are struggling.”

What will 2009 be like for in-flight connectivity?

“The market is pretty down. However, connectivity is starting from a very low place. 2009 will be better than 2008 because 2008 didn’t deliver anything. The numbers are still going to be quite low, mainly because airlines are still going through certification. But I think in 2009 virtually all the different types of providers will demonstrate that there is sufficient demand and sufficient drive to go forward.”

(Connectivity photo courtesy of OnAir)

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