THE Bottom Line
When it comes to competitive intelligence in the satellite communications sector, Linx brings to bear significant project experience in VSAT communications, in addition to other use cases. We have helped our clients gain a thorough understanding of the assets, current communications service providers, buying patterns, systems architectures, and prices paid by leading offshore drilling companies, offshore operators, maritime shipping operators, and seismic operators globally. Our research projects are designed to support the decision making process within enterprises by providing executives and corporate management with the data and information they need to make informed strategic choices.
For all of our projects, Linx relies on in-depth, double-blinded interviews with key executives at leading and niche players in the industry including vendors, service providers, customers and systems integrators / channel partners. Every study we complete is based on specific and detailed interview protocols established together with our clients that drive toward producing actionable intelligence.
Based on our interview with executives in the VSAT space, we determined that the operational efficiency of multiple remote onshore and offshore field locations largely depends on fast and reliable communications networks.
For example, in our interviews with former executives at satellite communications providers such as Hermes Datacomms, RigNet, Harris CapRock, SpeedCast and others, we discovered that in order to increase and maintain remote location productivity, many enterprises are constantly looking for VSAT providers who can provide reliable service in their targeted areas of operation.
In the oil and gas segment for example, the demand for high-bandwidth communication solutions has been on the rise as major exploration companies have continued to expand their operations in remote and harsh locations. This requirement has grown over the last several years and while lower oil prices have slowed the rate at which oil and gas companies have been expanding their operations, our interviews revealed that many operators have maintained their long term plans to upgrade their exploration and production processes. Furthermore, oilfield operators, drilling services companies, and seismic operators are employing more advanced technologies on their rigs in order to limit the number of people who are required to work directly on site.
Based on our research we are able to conclude with a high degree of certainty that whether it is mining companies or oil & gas producers or maritime and cruise ship operators, VSAT and fiber-optic communication networks are commonly utilized across the remote satellite communications value chain. Our analysts know the extent to which the emergence of cloud services, video conferencing, and the current focus on cyber security have increased the burden on fast and reliable communication infrastructure.
What does our research show?
During the course of our research into remote satellite communications we found industry executives describing five (5) primary factors that impact the competitive dynamics of the VSAT communications market either globally or in their local markets. These factors provide a useful “framework” to describe how your company can address the competitive dynamics and client preferences in the VSAT market.
(1) Price: Based on our interviews with over 24 industry executives, this most fundamental aspect of selecting VSAT vendors featured prominently in our discussions. However, the importance of pricing as a selection criteria varied by region. While price was not mentioned as the primary differentiating factor for several of our interviewees, there was often some sensitivity to high prices for VSAT connectivity, even if this was a secondary consideration. Industry executives we interviewed also tended to focus on pricing differentials between one provider and another.
"There's only one key (differentiator) that I think for all of it and that’s customer service. We have made a name for ourselves in the industry as one of the providers with superior customer service … So in my mind since everybody is very similar and the prices – everybody is the same [in the] marketplace, you got to provide customer service or you’re not [going to] get the customers"
- Former VSAT Operations Manager at Vendor X
(2) Geographic Proximity to the client: Interviewees repeatedly expressed a preference for doing business with VSAT providers with local representation. From Turkmenistan to Nigeria to Saudi Arabia, to the United States and elsewhere, both current and former executives ranked geographic proximity as one of five particularly important selection criteria when evaluating VSAT providers.
"You need to be physically present in the market for you to say you are good. That is first and foremost."
- Former VSAT Operations Head at Vendor Y.
(3) Speed of communication with the VSAT provider: Several executives were very clear on the requirement for quick and responsive customer service as many of the organizations requests to VSAT providers are time sensitive. According to various contributors to our research the larger global providers typically offer the best service, however this is not always the case. Consequently, we were able to identify specific opportunities for newer VSAT providers to exploit this perceived failing on the part of incumbent VSAT providers. The message in this regard was clear: if a global VSAT provider is not quick to respond to escalated issues, the risk of displacement by a new or established competitor becomes significantly elevated.
“Support is extremely important…if anything goes wrong …then it should be resolved within minutes or hours. So these kind of things, the quickness of response, the connection and reliability would be absolutely the most important factors…Personally I was not happy with [the existing VSAT provider]”
- Former IT Executive at Norwegian Cruise Lines
(4) Mean time to restoration of service: In our research we discovered that this was a business critical consideration when selecting a VSAT provider. For example, at the time of our interview with a leading offshore drilling company in the United States, the organization was migrating its VSAT requirements to a relatively new satellite communications provider. The reason given was because the newer VSAT provider allowed the drilling company greater flexibility to access, diagnose and modify the set-up of the provider's VSAT equipment. This model would potentially allow VSAT clients to diagnose and fix any errors which may cause an interruption in satellite connectivity resulting in lost production.
(5) Footprint: We found satellite internet coverage to be a key value differentiator for offshore drilling enterprises and maritime companies in particular. This is primarily due to the wide geographic spread of assets in these sectors, such that in some cases the clients have to make use of more than one provider in order to ensure that all their offshore and onshore assets are serviced.
How can Linx help?
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