The in-flight connectivity market is rapidly expanding around the world, according to a study by Idate. At end-2012, over 2,700 commercial aircraft worldwide offered a broadband internet service, 80 percent of these via the
The market for broadband access on planes is expected to continue to grow in response to strong demand from air passengers for connectivity. The research also found that air passengers are seeking the same quality service and experience they have grown accustomed to with terrestrial connections. To meet these expectations, one by one, airlines are equipping their fleets with broadband Internet access. By mid-2013, over a third of domestic flights (38%) in the US offered an internet access service.
Revenue-sharing is the most common business model today, the study found. A price is agreed between the operator and airline and the revenues then shared, the operator usually taking a larger cut than the airline. However, the report also shows that revenues from these services are not sufficient to generate a profit. They essentially cover just the operating costs (purchase of bandwidth, system maintenance and extra fuel consumption due to the weight of the terminal and increased drag on the plane). Satellite access services are forecast to face competition from LTE by 2016.
Two solutions currently co-exist: an air-to-ground (ATG) service in the US, which is losing pace due to the lack of adequate spectrum, and the satellite solution (Ku and Ka frequency bands). The introduction of Ka-band systems is expected to revolutionize the market, providing access to much faster speeds (from 2 to 12 Mbps per passenger) at much lower prices (bandwidth costs up to 10 times cheaper). By 2016, however, satellite is expected to face competition from LTE, a technology currently being tested by manufacturers such as
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