In-flight broadband flying high?

Despite an annual revenue increase in excess of 1300%, falling connect fees may be cause for concern.

July 1, 2010

2 min read

A new report from In-Stat says the in-flight broadband business is at the stage of market development at which it must prove its sustainability through the ability to generate revenues. Wi-Fi deployments within airplanes have jumped from just a handful in 2008 to an anticipated 2,000 by the end of this year, and according to In-Stat, while availability is approaching a critical mass, paid usage generated from in-flight broadband has been extremely low.

"Revenues from in-flight broadband will reach $95 million in 2010, up from just under $7 million in 2009," says Frank Dickson, vice president of research with In-Stat. "However, the fee per connect is expected to deteriorate as lower connect fees are negotiated for roaming and billing partner subscribers."

The following will affect those reveue figures.

Connect fees are projected to decline 24 percent from 2010 to 2014.
In-flight broadband connects will exceed 76 million in 2012.
In an effort to bolster Internet revenues, providers are beginning to explore the opportunity to provide video, direct broadcast satellite and Internet-based video. DBS revenues promise to be more than three times the size of Internet video in 2014.
Aircell is currently the in-flight braodbadn provider market leader, having established partnerships with several major domestic carriers.

The report from In-Stat, titled Build It and They Will Come? The In-Flight Broadband Market, examines the market for next-generation in-flight entertainment with a focus on in-flight broadband services. The report emphasizes market potential, usage, business models and competitive analysis for the in-flight broadband market. The report segments in-flight entertainment services by access technology (GSM, satellite, air-to-ground) as well as application (voice, video and data).