An SOS for an AIS Market Lost at Sea

Canada’s strategic interest in maritime surveillance may surpass that of any nation. So when Canada decides it needs 90 percent less satellite-based ship-tracking in the coming year than it has purchased in the past, that’s very bad news for companies positioning themselves in what’s supposed to be a business still in its infancy.

The argument for a global satellite-based Automatic Identification Systems is persuasive. As noted by Peter Mabson, chief executive of AIS provider exactEarth Ltd. of Canada, it is astonishing that, up to now, the world’s maritime authorities have had no way of keeping tabs of ships on the high seas.

Coastal radars reach maybe 100 kilometers offshore. Satellites can fill in the open-ocean gap, capturing signals that large ships — by dint of international maritime regulations — already must emit; it’s a business asking for the taking.

The hypothesis of satellite-AIS backers is that once coastal authorities get a taste of what satellite AIS can do, they will extend the regulations to smaller ships, especially as AIS terminal providers reduce the size and cost of their hardware.AIS-ShipTracks-Global_5.23.16

Satellite AIS payloads are not heavy or power-hungry, making them a good fit for hosting on satellites whose main missions are elsewhere. Orbcomm of the United States added AIS to its second-generation constellation of M2M messaging satellites after testing it on earlier spacecraft.

Mabson’s exactEarth has followed a similar route, flying, small dedicated AIS satellites before entering a strategic agreement with Harris Corp. to mount AIS terminals on 58 Iridium Next mobile communications satellites, to be launched starting this summer. Spire Global of San Francisco is building a constellation of smaller satellites carrying AIS and other sensors.

Governments are getting involved, in Europe and elsewhere. The next generation of Copernicus Sentinel satellites for the European Union will carry AIS terminals. European authorities have not given up on having their own AIS service despite the growing commercial interest.

Orbcomm and exactEarth, and CLS Services of France, a subsidiary of the French space agency, CNES, all bid on the Canadian contract, a successor to an earlier contract that included satellite-AIS services for a half-dozen other nations.

But somewhere along the way, what was to be a multimillion-dollar contract ended up being not much more than $100,000. The stock of exactEarth, publicly traded only since February, fell off a cliff May 5 on the news that it won such a disappointing award.

Orbcomm Chief Executive Marc Eisenberg, while not celebrating a loss, saw fit to recall that he had always viewed satellite AIS as a business with a global revenue of no more than $10 million to $15 million per year — a nice sideline for those with satellites mainly busy doing other things, but not much more.

If that’s the case, then Orbcomm, exactEarth, Spire and CLS — all with operations in Europe — and any other prospective AIS provider might do well by first persuading European governments to allow a small private sector to make do as it can without piling on with competing government-operated capacity.

Next up on the What’s-It-Really-Worth? calendar is the European Maritime Safety Agency. EMSA is soliciting bids for satellite-AIS services with a maximum value — after Canada, one hesitates to give a figure — of 10.2 million euros ($11.5 million) over four years. The filing deadline is May 27, with bids to be opened in June.