Leaders in 2G, 3G and 4GSmall Cell Solutions

As Below, So Above

Maximising the spectrum efficiency of in-flight connectivity with cellular

By Ben Smith of Wildfire in association with Ben Ash at ip.access.

October 2017

©ip.access Ltd — www.ipaccess.com 2

IntroductionIn-flight connectivity is an increasingly significant priority for airlines around the world. Deployments of in-flight wireless networks, especially Wi-Fi, are accelerating. Indeed, the latest research from Inmarsat highlights that Wi-Fi is already well past the point of being a ‘nice to have’ for passengers. It’s not even simply expected as standard. It is demanded.

Inmarsat’s 2017 In-flight Connectivity Survey, based on responses from over 9,000 airline passengers from across the globe, shows that 60% of passengers believe in-flight connectivity is “not a luxury, it is a necessity”.

The research also highlighted that this demand is creating clear commercial incentives for airlines to embrace on-board connectivity. According to Inmarsat’s report, 40% of passengers rank high-quality connectivity as one of their top three drivers of airline choice – alongside price and flight time slots. 44% of those surveyed said they would stop using their preferred airline if it offered poor quality in-flight connectivity.

It is clear that wireless connectivity is now a crucial strategic consideration for airlines.

In-Flight Connectivity

Self-Esteem

Self-Actualization

Belonging - Love

Safety

Physiological

However, there is a limiting factor here. To date, ‘wireless connectivity’ is almost exclusively equated with Wi-Fi – and this is a far too restrictive perspective. The focus on Wi-Fi means airlines are potentially missing out not just on the prospect of even greater client satisfaction and loyalty, but also on substantial new commercial opportunities and revenue streams.

If airlines are to take advantage of these opportunities then, as with ground-based networks, cellular needs to be deployed in addition to Wi-Fi. Airlines simply cannot afford to exclude 3G and 4G connectivity from the equation.

In-flight wireless connectivity is demanded by airline passengers. Deploy 3G/4G in tandem with Wi-Fi for customer satisfaction.

Maslow’s Hierarchy of Needs for the 21st Century TravellerIn-flight connectivity has become a basic need for many customers.

©ip.access Ltd — www.ipaccess.com 3

Delivering the capacity to meet wireless connectivity demandsBy 2035, the International Air Transport Association (IATA) expects the number of airline passengers to reach 7.2 billion – nearly twice as many as there were in 2016. And the capacity demand from each of those passengers will be rising at its own exponential rate It is safe to assume that the demand for high-quality wireless connectivity will only increase in parallel with the growth in customers. People aren’t going to tolerate less connectivity in future.

However, the fact that wireless is such a fundamental part of the slick in-flight experiences airlines need to offer in order to attract and retain customers presents a major challenge. This is because there are limits to how much of this load can be supported by Wi-Fi. Airlines will struggle to deliver the capacity they need at scale with Wi-Fi alone.

Wi-Fi – like any other radio technology – represents only a small slice of spectrum. So, even as satellite backhaul services continue to improve and increase capacity, in-flight Wi-Fi networks are fundamentally limited in how much bandwidth they can deliver, and the users they can support. If current trends continue, and increasing numbers of passengers engage in bandwidth hungry activities on flights – like streaming video – then Wi-Fi cannot be expected to fulfil passenger demand on its own.

Instead, if airlines are to deliver the in-flight capacity to meet demand, the experience of ground-based networks says that it is necessary to light up as much spectrum as possible.

By providing 3G and 4G connectivity in-flight, airlines can radically increase the capacity of their wireless networks. In a reversal of how ground networks were deployed, it effectively means airlines can ‘offload’ users onto cellular – making it far more realistic to support the number of passengers that want to use their wireless devices on-board, regardless of their bandwidth requirements.

It is not an either/or question. Wi-Fi and cellular are complementary, and providing both technologies is essential if airlines are to meet current and future connectivity demands.

©ip.access Ltd — www.ipaccess.com 4

Boosting customer satisfactionAs well as delivering capacity, cellular also brings with it a number of other advantages that can help airlines boost customer satisfaction with in-flight connectivity. Primarily, these benefits centre on increasing choice for users. With both Wi-Fi and cellular available, passengers can choose to connect how they prefer.

For some users, it will be about the ease of use of cellular versus Wi-Fi. With a 3G/4G connection users don’t have to fiddle with sign-in forms or turn anything on or off. Their phones will just connect as they do when on the ground.

For customers that have signed up to a large data bundle, this might be even more desirable. These subscribers may prefer to use their mobile data bundle, even when Wi-Fi is available, due to ease of getting connected to the Internet. And the ruling by the European Union to remove roaming charges will make it even more attractive to use in-flight cellular services by removing the fear of excessive fees.

An airline that can provide a service to support these consumer habits has a clear competitive advantage. Not only will airlines be making cellular subscribers happier, they will also be reducing congestion on the on-board Wi-Fi network.

The specific demand for “high-quality, seamless” wireless experiences, as highlighted by Inmarsat, also means there is an incentive for airlines to invest in in-flight cellular. While Wi-Fi is a ubiquitous term, it is also a commodity and most users expect best effort performance — particularly on public hotspots. 3G and 4G on the other hand are strictly standardised, offering guaranteed quality of service levels.

Cellular also offers far greater security than public Wi-Fi. This is particularly attractive for business users who may want or need to take advantage of in-flight wireless networks, but don’t want to risk connecting to an unsecured Wi-Fi network.

The modern airline customer wants to stay in touch.

©ip.access Ltd — www.ipaccess.com 5

Opening up new commercial opportunitiesAdding cellular connectivity alongside Wi-Fi doesn’t only mean happier customers. Inmarsat’s research has already found that 77% of passengers say they would pay for in-flight connectivity, even on short haul leisure flights. This is up from 64% in 2016.

Airlines are already realising revenue streams from on-board Wi-Fi networks, so adding cellular has the potential to open up a range of new commercial opportunities.

Deploying cellular gives airlines the option of signing commercial agreements with mobile network operators (MNOs). This may take the form of promotions to an MNO’s subscribers or exclusive co-branding.

Alternatively, airlines could look at deploying cellular networks as part of a neutral host model.

Airlines share the same challenges of many terrestrial venues – in that any airline will expect to serve subscribers from all the mobile carriers, not just one or two, as a hotel owner or landlord would.

However, shared mobile infrastructure, deployed by a service partner acting as a neutral host, allows the various MNOs to serve all of their subscribers – with only one set of access points required. The ip.access Viper™ platform has been designed to make this type of deployment effortless.

The technology at the heart of the Viper platform also enables operators to compete for the attention of the neutral host and the airlines in ways that they could not do before – another commercial benefit of this approach. For example, an MNO might want to bid for a greater share of the available resource on certain routes or on flights in certain regions.

ip.access is not alone in anticipating this huge growth in in-flight connectivity. Industry analysts (Global Market Insights) see a rise in connectivity enabled by increased satellite capacity that needs to be matched by increased on-plane spectrum. In-flight cellular is part of a market worth $8.5bn by 2024.

Taken together, these possibilities could create significant new revenue streams for airlines – all while simultaneously improving the in-flight experience for passengers.

©ip.access Ltd — www.ipaccess.com 6

ip.access – A trusted in-flight connectivity partnerThere is a substantial commercial opportunity – both directly and indirectly – from deploying cellular alongside Wi-Fi on planes, and ip.access is perfectly positioned to help airlines capitalise on that potential.

Working with partners such as SITAOnAir and AeroMobile, ip.access has been bringing cellular connectivity, including voice, SMS and data, to tens of millions of airline passengers for the last 10 years. Our experience means that deploying in-flight cellular can be painless, risk-free and profitable.

As satellite backhaul capacity increases, in tandem with the growing demands for wireless from passengers, airlines cannot afford to ignore cellular as part of the in-flight connectivity mix. The opportunity is there to be grasped.

A happy customer is a repeat customer.

©ip.access Ltd — www.ipaccess.com 7

References

1) Inmarsat 2017 Inflight Connectivity Survey; https://www.inmarsat.com/aviation/commercial-aviation/in-flight-connectivity-survey

2) GetConnected article on Global Market Insights IFEC Market Report; http://www.getconnected.aero/2017/05/report-ifec-market-8-5bn-2024

IPA_Aviation_WhitePaper_Oct_2017_v1.0 © ip.access Limited 2017. All rights reserved.

Viper™, nanoLTE™, Oyster3G®, nano3G® and nanoGSM® are trademarks of ip.access Ltd. All other trademarks are acknowledged. Information in this document is subject to change without notice and may contain errors. No responsibility is assumed by ip.access for the use of this information, nor for infringements of patents or other rights of third parties. The documentation and/or software may provide links to Web sites and access to content, products, and services from third parties. ip.access is not responsible for the availability of, or any content provided on, third-party Web sites. You bear all risks associated with the use of such content. This document is the property of ip.access and implies no license under patents, copyrights, trade secrets or other intellectual property rights. No part of this publication may be copied, reproduced, stored in a retrieval system, or transmitted, in any form of any means, electronic, photographic, or otherwise, or used as the basis for manufacture or sale of any items without the prior written consent of ip.access.