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No place to hide: AeroMobile’s CEO expects mobile service on 7,000 aircraft in five years

08 November 2012

AeroMobile, part-owned by Telenor, has just won a deal with Boeing to fit mobile base stations in aircraft during production. CEO Pål Bjørdal expects one in three passenger jets will have onboard mobile service from his company alone within five years. Interview by Alan Burkitt-Gray

Read more: AeroMobile Telenor Panasonic aircraft OnAir Boeing Airbus


                     
Pål Bjørdal: The equipment is not standard GSM gear. It needs
to meet the safety requirements of the airline industry 
                     
If you live at 30,000 feet, you're familiar with the situation every time your aircraft bumps down on the runway and taxis to the terminal. The cabin crew tells everyone to keep their seatbelts fastened until the plane has stopped, and to keep their phones off until the doors are open.
There are two noises that fill the cabin: the clicks of seatbelts being unclipped, and the bleeps of phones picking up text messages and emails.
Pål Bjørdal, CEO of AeroMobile, knows the experience well. "Whenever I go somewhere in longhaul, the worst part is where you turn the phone on after seven or eight hours, and there are 30-40 emails to read."
And, he might have added, shuffling along from the aircraft through passport control and baggage reclaim to the taxi queue is just the wrong set of places to read and answer urgent work emails.
"Why can't you use the time onboard if you want to?" asks Bjørdal. Of course, he has an angle: his company is busy selling mobile equipment to many of the world's airlines.
The business is small so far: equipment is now installed in 130 aircraft in service, and he expects that there will be 350 by the end of 2013 and 750 at the end of 2014 - and that there will then be a surge in installations. "We expect there will be 7,000 aircraft in five years," he says.
If he's right, that's a substantial proportion of the number of aircraft in service. According to Usman Ahmed, a senior aviation analyst at the International Bureau of Aviation, there are about 21,000 jet passenger aircraft in service, including 4,650 wide-body and 12,500 narrow-body aircraft, plus 3,940 regional jets.
That means AeroMobile - owned by Telenor and Panasonic - alone hopes to fit about one in three aircraft within five years. It has a competitor chasing the same market: OnAir, owned by Airbus along with Sita, the aviation industry's IT and telecoms specialist.
There have been two changes that are contributing to this expected boom in the use of mobiles in the air. 
                  
                  
Wireless broadband 
                  
First, AeroMobile has just upgraded its technology to use new satellite links to the aircraft so that customers have a full 3G wireless broadband service onboard. Second, Boeing has just started fitting AeroMobile equipment during production, starting with the 777. That means airlines don't have to take aircraft out of revenue-earning service so that terminal equipment can be installed.
Thai Airways International is the first airline to take delivery of a Boeing 777 already fitted with equipment from AeroMobile.
"Delivery of aircraft fully line-fitted saves airlines time and cost," says Bjørdal. He hopes "it is only a matter of time" before both Airbus and Boeing offer to fit satellite equipment in the factory. And he expects Airbus to offer airlines a choice between both AeroMobile kit and that from its OnAir partner.
Among the airlines that AeroMobile is working with include Aer Lingus, Cathay Pacific, Dragonair, Emirates, Etihad, Gulf Air, Lufthansa, Malaysia, SAS, Turkish Airlines, V Australia and Virgin Atlantic. "There are some large customers that are still unannounced," he says.
The on-board system essentially consists of a number tiny base stations that provide 2G and 3G coverage within the cabin, linked by satellites to the world's telecoms networks - just as a remote base station on the ground might be connected by satellite. Each base station is connected to a so-called leaky feeder, a cable that runs around the cabin and acts as an antenna. That's one of the reasons retrofitting is expensive.
"The equipment is not standard GSM gear. It needs to meet the safety requirements of the airline industry," says Bjørdal, who was appointed CEO in September 2010 after running Telenor's Maritime Communications Partner subsidiary, a specialist in providing satellite services to shipping.
Telenor owns just under 50% of AeroMobile, and Panasonic Avionics - which makes the on-board equipment - owns the rest. The company is based at Gatwick airport, just south of London, next to Virgin Atlantic's base.
"It is good to have a partner that understands the aircraft side," says Pål Bjørdal. The legal requirements of certifying airline equipment and the regulatory side of the business require specialist knowledge.
"It's a volume business," he says. AeroMobile has invested heavily in the equipment and in the satellite infrastructure "and we need a certain volume to maintain the operation".
The company ran its first satellite phone services as long ago as 2008, with Emirates, but the satellite capacity then was adequate only for basic voice and SMS. Today's satellites offer higher bandwidths and the receiving equipment on the aircraft automatically switches - a sort of roaming in reverse - from satellite to satellite as it flies through the sky.
AeroMobile does not cover four parts of the world. Two of them are the poles, north and south of about 78 degrees latitude - well into the Arctic and Antarctic. Another is India, where there is a lack of suitable satellite provision, says Bjørdal - though in late October Panasonic Avionics announced a deal with AsiaSat that is designed to improve coverage over India and the Middle East. 
                  
                  
US mobile phone ban 
                  
The fourth white space on the map is the US, where the Federal Communications Commission and the Federal Aviation Authority still ban the use of mobile phones onboard aircraft. "We have to issue a warning to passengers when we get to within 200 nautical miles of US airspace, and we cut people off at 120 nautical miles," says Bjørdal.
In addition, equipment is turned off everywhere when the aircraft is lower than 6,000 feet.
The equipment in each aircraft behaves simply as a local mobile network, connecting customers directly back to their home network, which sets tariffs and makes charges for the service. That means phones and tablets behave just as if their owner were sitting in a café in Barcelona or in a taxi in Singapore.
"We have roaming agreements with more than 260 mobile operators," says Bjørdal. His company has been focusing its work on the operators with market share among each airline's customers. "When we sign up with an airline we look at the demography of their passengers."
But AeroMobile has another tool at its disposal. The company can identify an operator whose customers have tried to use its equipment onboard and have failed - because there was no roaming deal. "We contact the operator and tell them that 5,000 of its customers tried to attach to the network."
For the operator, that's missed revenue - and, perhaps, a discontented customer who has seen fellow passengers able to keep in touch. "For telcos the most important thing they sell is connectivity," says Bjørdal.
In the UK, for example, Vodafone was the first operator to sign a roaming deal with the company. It's been joined by Telefónica O2 and Hutchison's Three, but not yet Everything Everywhere. "We have ongoing discussions. Hopefully we will be adding them to our list of partners." 
                  
                  
Revenue share 
                  
For AeroMobile, it's a long, slow process of signing up roaming partners - as is the process of persuading airlines to install equipment onboard. "I never pay for installation," says Bjørdal. But for the airlines, "they get a share of the revenue which has been generated".
So does AeroMobile, of course. It sets what is effectively a wholesale tariff that it charges a network for connecting its customer. "The telco sets the end user price. Some choose to add a significant margin, some choose to provide it at the same rate as other roaming services. And some charge less than we charge them." That means they make a loss. Bjørdal clearly isn't sure of the logic of that.
Some airlines offer wifi service: in the US, it's the only alternative. But the advantage of GSM to the airline is that it takes away the need to think about collecting revenue from each passenger.
Roaming rates within Europe are not capped by the European Commission, as are those for voice and data roaming on the ground, he notes.
So why do so many people insist that using phones onboard aircraft is dangerous? That's because, with no base station nearby, phones will automatically operate at maximum power to try to pick up a signal. If there's a base station onboard, then phones will work at the lowest power possible. "You have a network onboard that the phone will attach to immediately," he says.
"We know it is safe, due to the nature of the aircraft itself. Aircraft types are certified and the equipment is certified." And the low power increases safety still further. "You still have to turn off for takeoff and landing. We turn the system on when we reach 6,000 feet until the aircraft starts descending again." 
                  
                  
Terrestrial interference 
                  
And that 6,000 feet limit means there is less chance of interfering with terrestrial mobile networks. The height limit means that aircraft and airlines that specialise in short flights are not a good prospect. "Some very short routes don't even get to cruising altitude."
But when you do get the service on a long flight, the available bandwidth should be 50 megabits a second, says Bjørdal - though he adds a warning: "If there are a lot of aircraft within one sector the bandwidth may be shared between them."
The focus is clearly on data services: on allowing passengers to read and reply to their emails, send and receive text messages and check social media and other websites during their flight. "Between August and September alone we saw a tripling in traffic," says Bjørdal. "And it doubled again between September and October."
But that is from a low starting point. "We're at the stage where awareness is building." But he sees that already airlines are starting to develop their strategy. "I'd say 90% of airlines have a strategy now or are developing a strategy to connect their customers. In three to four years most airlines will have a service."
There will, then, be no place to hide from those emails. On the other hand, there won't be the stress of discovering 30 unanswered and urgent messages on your BlackBerry as you prepare to deal with the rigours of the UK Border Agency at Heathrow or the Police aux Frontières at Charles de Gaulle. 
                  
More from GTB 
Boeing to fit base stations in 777 cabins 02 Nov 2012
Telenor 'may sell VimpelCom stake' 01 Nov 2012
Sita and Orange to build cloud infrastructure 23 Jun 2011
Interview: Matt Desch of Iridium 01 Jul 2008
"I'm on the plane" - soon to be a reality for mobile users 14 Jul 2005




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