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« Lompoc Launches | Main | Podcast #20: Rick Ehrlinspiel, Surf and Sip, Hotspot Veteran »

September 7, 2006

The Economist on Cells in Flight

D3606Wb1Airborne cell usage is coming; you can't stop it: For this article in the Economist, I spoke to many people involved in parts of the aeronautic world, including regulators, airlines, and operators, and found that the juggernaut for in-flight calling, messaging, and limited cell data is bearing down upon us. The US carriers appear to have little interest in voice, possibly because of the general negative attitude about it, and AirFone's lack of traction (albeit at their high price for poor-quality calls). European carriers, who typically haul people over shorter distances, appear to have greater interest. Service should commence on as many as six airlines worldwide by fall 2007, with some much sooner.

Ryanair told me their average flight is 90 minutes, and people are already high engaged in activities on board. They will like spend something like $20m--my very rough estimate--to add service to all their planes, but with calls priced at $2.50 per minute, they could gross something on the order of $15m per year from just 50 minutes of calls among all passengers made per flight and hundreds of text messages. Text messages should cost well under a dollar each, although prices haven't been set.

What we Americans fail to understand when we see $2.50 per minute as an onerous rate is that Europeans have been used to paying insanely high cross-border roaming charges, sometimes with the same carrier owning both networks. EU regulators have started poking at these charges, which companies immediately started dropping. Nevertheless, $2.50 per minute for the privilege of roaming in the air just doesn't have the same horrible resonance as it does for those of us who pay $80 per month for 1,000 prime and 5,000 weekend/evening minutes.

If you'd like some amusing reading, you can download comments made by individuals and other interested parties to the FCC for proceeding 04-435, which was the FCC's public comment query on the use of cell phones in flight.

My article didn't address the broadband side of the equation much because that's going to be a later development. I had one in-flight operator tell me that satellite bandwidth will be prohibitive to use in the way that Connexion resold it. Inmarsat's fourth-generation satellites may offer 432 Kbps over a single channel, but they charge $8 to $12 per megabyte for a ground-station end user's data. What that might be bundled for in the air is still unknown. GPRS will be likely from day one because the speed is low enough that it would be hard for someone to spend a fortune.

The US picture is much simpler because AirCell and JetBlue purchased air-to-ground licenses, which require substantially cheaper operations. They don't have to launch satellites, deal with long latencies, or pay middlemen for any service. AirCell expects 1.5 Mbps throughput in each direction, which is ideal for...lots of voice over IP conversations.