US telecoms regulator FCC has just released an NPRM on scrapping the country’s ban on using mobiles on flights. SatelliteFinance’s Jason Rainbow speaks with Kevin Rogers, CEO of AeroMobile, as the inflight GSM provider hopes for a favourable ruling…
US telecoms regulator FCC has just released an NPRM on scrapping the country’s ban on using mobiles on flights. SatelliteFinance’s Jason Rainbow speaks with Kevin Rogers, CEO of AeroMobile, as the inflight GSM provider hopes for a favourable ruling to break into the market.
Jason Rainbow: How important is the US to your business and what kind of impact would a positive FCC decision have for both you and the wider industry?
Kevin Rogers: If the FCC’s lifts the ban, there is no doubt that the US airline industry will greatly benefit as US airlines will finally have the option to provide the same service as their international competitors. Given that there are no safety issues; US airlines should be able to decide for themselves whether to offer inflight mobile services to their passengers.
The US is an important region to us and a positive FCC decision would obviously be great news for our current airline partners – as well as offering an improved service, it means increased ancillary revenues for them.
In terms of the wider industry, connected international airlines or those looking to offer the service will also benefit from a positive decision, as the service will continue to work over US airspace, meaning an improved inflight experience for their passengers.
JR: With Gogo and Row44 (Global Eagle Entertainment) already established in the US market, is there room for another inflight connectivity player?
KR: Yes definitely. Today people connect using a variety of technologies depending on where they are and what they are doing. Mobile networks provide instant access to mobile data, texts, voicemail and calls, while Wi-Fi is better suited to email and heavy internet browsing. It is a blend of these connectivity technologies which provides passengers with the greatest flexibility and choice.
The system can be retrofitted or line-fit, and Boeing is already shipping out brand new aircraft fitted with the service to several international airlines.
JR: AeroMobile provides GSM-only services, unlike other inflight service providers that can also support applications based on WiFi. As you prepare to enter a new and significantly-sized market, how will you compete with such companies?
KR: AeroMobile offers a mobile service which can be provided as a standalone product or through Panasonic Avionics Corporation’s Global Communications Suite (GCS). Within Panasonic Avionics’ Global Communication Suite, the AeroMobile service sits alongside Panasonic’s Wi-Fi service.
JR: Do you think this will impact on your ability to sign new deals with the airlines?
KR: Not at all – our relationship with Panasonic Avionics is a key strength and our client base speaks for itself; the AeroMobile service is already available on 170 aircraft with a further 1,000 in the pipeline.
JR: Apart from the US, are there any other geographical gaps in your service and how do you plan to expand there?
KR: Apart from the US, there are no other major geographical gaps in the AeroMobile service.
We already have many connected flights flying to and from the US every day, and our airline partners see real value in providing an inflight mobile network. Today, the AeroMobile service is flown to and from 16 different airports across the USA, including New York, Chicago, Dallas and Los Angeles. In fact, US passengers are already using the AeroMobile service and make up 20% of the total cabin users on USA-bound flights. With AT&T and T Mobile onboard as roaming partners, American passengers already have easy access to inflight mobile connectivity.
JR: How do you see demand for inflight connectivity globally and where is it heading?
KR: Rising numbers of passengers are boarding with smartphones and want to stay connected whether it be through texting, social media, emails or calls. In fact since 2008, over 20 million passengers have connected to the AeroMobile network inflight. As roaming rates are gradually coming down, the number of connected passengers is growing month-on-month and we only expect this to increase going into 2014 and beyond.
Asia is a huge growth area for us, with six airlines scheduled to launch the service in the coming months including Thai Airways and Garuda Indonesia. The region is growing fast in terms of mobile usage and this will certainly translate into the cabin.
JR: Some industry analysts have questioned the long term profitability of the inflight broadband business model, what do you say to them?
KR: From speaking to our airline partners, it’s clear that they are beginning to see real value from installing the AeroMobile service onboard, as not only are they improving the customer experience and innovating their brand, they are also getting a return on their investment at the same time.
JR: Can the market sustain the number of service providers it currently has or do you think some consolidation is likely?
KR: The number of commercial aircraft and passengers are predicted to grow substantially over the coming decades providing opportunities to a number of connectivity service providers. It’s also worth noting that AeroMobile is one of only two mobile network service providers currently operating in the aviation industry.
JR: With its backing from Panasonic, which acquired the whole group in 2012 just two years after Norwegian telco Telenor helping bring Aeromobile out of bankruptcy, where does it now sit financially? Will you need to raise funding to expand into North America?
KR: AeroMobile is in a good position and operates as a standalone company based out of the UK. It is too early to comment on the costs of entering the US market but we hope that this can be kept to a viable level for the good of the US airline industry.
JR: Will you benefit from the strategic partnership between China Telecom Satellite and Panasonic Avionics?
KR: Over time, we expect Chinese airlines to offer onboard connectivity to their passengers to keep up with their international competitors, and of course we hope they will choose AeroMobile.
JR: Would you consider acquiring an inflight content provider as Global Eagle did with Advanced Inflight Alliance?
KR: AeroMobile is currently experiencing good organic growth and there are no plans for market acquisitions.
