Wi-Fi On The Water

By Gerry Blackwell

April 10, 2003

Florida-based Maritime Telecommunications Network puts Wi-Fi hotspots cruise ships for business travelers -- and on deep-sea oil rigs for entertainment.

If you were planning a vacation cruise, would you check with the cruise lines first to make sure their ships offered high-speed Wi-Fi Internet access? The point might seem to be to get away from the Web, but -- surprise -- many ships today do offer Wi-Fi connectivity.

Thanks largely to Maritime Telecommunications Network (MTN) of Miramar, FL, no matter how far you go to get away from it all -- you could be in the middle of the Pacific Ocean, hundreds of miles from landfall -- you'll still be able to log on to the Net at high speed with your Wi-Fi-equipped laptop or PDA.

MTN's main business is providing ship-to-shore voice and data satellite communications services and systems. The company counts virtually every major cruise line in the world among its customers, and many oil and gas companies as well. The energy companies need satellite communications for their manned off-shore rigs.

A year ago, MTN went to these customers with a brilliant idea -- why not give passengers and crew access to that existing satellite link for Internet chat sessions, e-mail, and Web surfing, via Wi-Fi?

Many of the cruise ships already had cyber cafes where passengers could go and use the desktop PCs provided to collect their e-mail or check their stocks. "But using a PC in an Internet cafe is not the same as using your own laptop," notes MTN director of business development Rob Marjerison.

The cruise lines lapped it up. As MTN president and CEO Dave Kagan explains, "From their perspective, their big competition is resorts on land, not other cruise lines. They want to bring to their guests all the same capabilities as if they were on land. What this does for them is help them complete their product offerings."

In particular, the cruise lines were desperate to attract some of the lucrative meeting and convention trade. That market segment was largely closed to them, Kagan and Marjerison say, because business people when they travel need or want easy access to the Internet and their corporate networks.

"There is an immense number of business customers in groups looking for convention hotels -- there's a lot of business in America in that demographic," Marjerison says. "They didn't have the option of choosing a cruise ship before. Now they do."

"It's changed the cruise industry," Kagan contends. "It's opened up a whole new demographic to the cruise lines of individual passengers and business groups."

The business case was apparently convincing enough that once the first cruise line started installing Wi-Fi hotspots on its ships -- it was Miami-based Norwegian Cruise Line (NCL) -- others fell into line fairly quickly. "The first one that did it -- business came to them in droves," Marjerison says. "Now we're under a lot of pressure to install more as fast as we can."

In the last six months, MTN has installed Wi-Fi systems on about 30 ships altogether from several lines, including the entire fleets of major players such as NCL, Carnival Cruise Lines and Holland America Line. Two of the firm's major cruise-line customers still have not jumped on the Wi-Fi bandwagon, but they will soon, Kagan says, whether with MTN or on their own.

Despite initially saying that the first mover -- NCL -- got a lot of new business as a result of installing MTN's Wi-Fi systems, Marjerison is later more cautious about the market share impact.

"The ones that have this capability are going to have a competitive advantage for sure," he maintains. "But the percentage of the market [that wants the service now] is probably pretty small." Kagan adds, "But it grows every day."

MTN is not installing ship-wide Wi-Fi coverage as in many hotels and resorts on land. It's installing one to four hotspots per ship -- always in existing Internet cafes, plus in some, the pool area, crew common rooms and other parts of the ship. Coverage does usually bleed into other rooms and areas as well, Marjerison says.

Engineering Wi-Fi networks on a steel-hulled ship is a complicated business, though. "To get coverage in more than just the room where the access point is located we have to do a very detailed and comprehensive site survey," he notes. "We'll take anywhere from five to 1,500 test readings as part of the survey."

The company has done one survey on a brand-new cruise ship with a view to providing ship-wide coverage, including in staterooms, but the owner hasn't decide whether to go ahead yet. "At this point, we haven't been able to build a business case to support the project," Marjerison admits.

Ship-wide coverage opens up the possibility of offering voice-over-Wi-Fi, paging and other services, he points out -- but it presents even more engineering challenges. MTN believes it's the way of the future, though, and considers what it has learned so far about how to do it as highly proprietary information.

"The interior walls in a building on land are typically sheetrock, which doesn't stop Wi-Fi signals, or not entirely. But a ship is like giant steel honeycomb," Marjerison explains. "There are a lot of water and fire bulkheads which makes [engineering a Wi-Fi network] immensely complicated. So far we're the only ones who know how to do this."

MTN is using Cisco Systems access points tied into a WISP gateway device from Chicago-based PCTel that provides AAA (authentication, authorization and accounting) functions. The Wi-Fi network is logically and physically separate from the main satellite voice and data network on the ship which provides ship-to-shore phone and ship data services.

From the PCTel gateway, the network goes into a router and then to the satellite antenna. The digital satellite system does packet priorization to ensure that voice data gets priority over passenger and crew Internet traffic.

The service level for Wi-Fi connectivity varies according to time of day and amount of voice traffic, but passengers are currently getting connection speeds of from "a couple of hundred K" to 1.5 megabits per second, Kagan says.

They do pay for the service -- and given that it's satellite communications on the wide area side, it ain't cheap. Rates vary, but the average works out to about 35 cents a minute if you buy a package of a few hours. At $25 an hour, it's affordable -- just -- but certainly more expensive than dry land hotspots.

Whether this is cost recovery or a profit center for the cruise ship is not entirely clear.

Oil and gas rigs, meanwhile, represent a different kind of opportunity for MTN. The rigs are all over the globe -- in the North Sea, Gulf of Mexico and off the coast of Africa. Some employ 100 to 200 people, a few even more. MTN installed one recently with 800 employees.

Why do the rigs need Wi-Fi Internet connectivity on board? It's mainly for the employees. "Anybody who's away from home for six or eight months wants e-mail and news," Marjerison points out. "The companies also use it as an administrative tool and for weather tracking. But it's mainly for entertainment."

Some companies provide connectivity as an amenity to their crews, some charge for the service on a break-even basis, some see it as a revenue stream. The latter presumably do not appear in anyone's Top 100 List of the Best Companies to Work For.

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