EUROCONSULT FOR digital ship Hamburg 2015 How will future HTS satellites impact and drive maritime communications EUROCONSULT FOR digital ship Hamburg 2015 Prepared by Wei LI, Senior Consultant March 18th, 2015

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$760 million 70+ VSAT service providers The maritime market 121,000Addressable vessels 68,000 Merchant ships 6,500 Passenger ships 8,500 Offshore rigs and support vessels A historic market for mobility Strong change in usage pattern. Broadband is now the key revenue generator Legacy MSS terminals still stand for the bulk of installation VSAT is becoming more popular especially for high end market segments MSS market is consolidating VSAT market is fragmented leaving opportunities for M&A 70+ VSAT service providers 12,000 VSAT terminals 352,000 MSS terminals $760 million revenues for satellite operators

Regular FSS satellites HTS vs regular satellites HTS satellites Regular FSS satellites High throughput Designed for data Dedicated beams for mobility Lower cost per MB Large coverage Designed for TV broadcasting Lower throughput

Examples of HTS Through 2016, a number of new HTS systems are being launched with Ocean coverage Inmarsat’s Global Xpress will provide global Ka-band spotbeam coverage Intelsat EPIC will provide multi-spotbeam Ku- and C- band coverage through a number of upcoming EPIC class satellites Viasat-2 planned for 2016 will cover the Northern Atlantic with Ka-band Eutelsat 172b with HTS Ku-band beam to cover the Pacific Ocean from 2017 Thor-7 will add 6-9 Gbps to Atlantic and Mediterranean in 2015 O3b has steerable beams providing up to 1Gbps per user to off-shore rigs and cruise ships Global Xpress O3b Thor 7 EPIC Viasat 2

Estimated FSS satellite capacity over oceans, 2005-16 FSS capacity over oceans Estimated FSS satellite capacity over oceans, 2005-16 HTS systems to increase capacity over oceans to over 65Gbps by 2016 The Northern Atlantic and the Pacific Ocean with strongest capacity increase Ka-band to grow from ~1Gbps in 2012 to over 40Gbps by 2016 Ku-band to almost triple over the next 5 years Inmarsat (GX) and Intelsat (EPIC) leading operators, but a number of regional projects do exist in the market

Key Trends in satellite capacity supply Investment in HTS systems FSS operators CAPEX on HTS systems expected to surpass $12 billion by 2016. Nearly 1,500 Gbps of HTS capacity by 2016 New systems Multi-satellite constellations such as Inmarsat (Global Xpress), Intelsat (EPIC) and O3b designed (in part) to target mobility applications traditionally served by MSS systems A larger number of operators provide regional coverage from single satellites (Thor-7, etc.) Except Inmarsat, most maritime HTS systems are of open architecture Pricing pressure The significant increase in capacity will break the supply-demand balance in short term The demand increase is exponential but linear while the supply increase is leapfrog Competition will put pressure on the price Supply Demand

Significant bandwidth increase in the next decade New applications enabled by HTS Must-have solution for crew and passenger communications Significant bandwidth increase in the next decade Reducing IT investment Improving efficiency Various sensors on vessels Supporting a large variety types of applications including maintenance, remote diagnostic, performance optimizations, etc. Content is the key element for differentiation for SPs Lead to incremental revenue from existing customers

CONTACTS Wei LI li@euroconsult-ec.com Paris Office 86 Blvd de Sébastopol 75003 Paris - France T: +33 (0)1 49 23 75 30 - F: +33 (0)1 48 05 54 39 www.euroconsult-ec.com