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Shutdown of Connexion-By-Boeing Service Highlights Pitfalls of In-Flight Passenger Communications Businesses

Posted on: Thursday, 17 August 2006, 15:00 CDT

MENLO PARK, Calif., Aug. 17 /PRNewswire/ -- Telecom, Media and Finance Associates, Inc. (TMF Associates), the specialist Mobile Satellite Services consulting firm, today forecast that the market opportunity for in-flight communications will be much smaller than many analysts and consultants have been projecting.

TMF Associates forecast in a research note published in June 2006 that the Connexion service would ultimately be shut down and that backers of other systems would need to re-evaluate whether their business projections are simply too optimistic. However, other consulting firms have continued to project that a multi-billion dollar market will be realized for in-flight passenger communications over the next five years.

Tim Farrar, author of the note, commented, "It is all too easy to blame the failure of Connexion-by-Boeing on its high costs and large terminal equipment. However, set in the context of the expenditure by business travelers on other communications services, projections that in-flight communications can become a multi-billion dollar market over the next few years are completely unrealistic. For example, in July 2006 Booz Allen forecast a EUR 2 billion market for in-flight cellphone use in Europe alone by 2010. This compares to a total pan-European cellular roaming market of EUR 8 billion in 2005, when by our estimate business travelers are on an airplane for at most 3% of their trip. While the in-flight communications market opportunity within the US remains significant, and may grow to around $300M in annual revenues over the next ten years, the opportunity on both long-haul and intra-European flights is far smaller. Inmarsat-based services will provide an appropriate solution for cellphone-based connectivity, but given the modest size of the overall market it is hard to see affordable in-flight Internet services for laptop users being widely deployed outside North America."

To download copies of the briefing note please visit http://www.tmfassociates.com/articles.

Both the briefing note and the market projections for in-flight communications form part of TMF Associates' newly launched information service on the Mobile Satellite Services (MSS) sector. More details are available at http://www.tmfassociates.com/reports.

TMF Associates, headquartered in Menlo Park, California, is a leading consulting and research firm providing business and technical analysis in satellite, wireless and broadband telecommunications. The firm specializes in Mobile Satellite Services, including Ancillary Terrestrial Component (ATC) technology, and works with operators, investors and equipment manufacturers to analyze complex market issues. For additional information, please visit http://www.tmfassociates.com/.

CONTACT: Tim Farrar, President Telecom, Media and Finance Associates, Inc. 650-839-0376 or tim.farrar@tmfassociates.com

This release was issued through eReleases(TM). For more information, visit http://www.ereleases.com/.

Telecom, Media and Finance Associates, Inc.

CONTACT: Tim Farrar, President of Telecom, Media and Finance Associates,Inc., +1-650-839-0376, or tim.farrar@tmfassociates.com

Web site: http://www.tmfassociates.com/http://www.tmfassociates.com/reportshttp://www.tmfassociates.com/articles

Source: PRNewswire

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