Booz Allen Hamilton: Mobile telephony expected to take flight in near future Posted
Booz Allen Hamilton: Mobile telephony expected to take flight in near future
August 01, 2006
Passengers onboard commercial airlines will soon be able to use
their own mobile phones while in flight in the near future, according
to Booz Allen Hamilton. Onboard base stations hold substantial
revenue potential for mobile network providers and airlines. “We
expect the total volume of fees for mobile telephony during flights
to reach 2 billion Euros in Europe alone by 2010,” says
Booz Allen Principal Dr. Uwe Lambrette.
This advancement in technology will have a significant effect
on Middle East business. “The Middle East in general and
hubs such as Abu Dhabi, Dubai, Jeddah and Riyadh in specific are
witnessing increasing traffic year-on-year so in-flight mobile
telephony will certainly have an impact on the region,”
said Karim Sabbagh, Vice President Booz Allen Hamilton. “If
you combine that with the fact that mobile phone penetration is
advancing rapidly in our region you can see why something such
as onboard base stations would be of considerable importance.”
On-Board Base Stations
Mobile telephony is currently banned onboard commercial flights
because of its potential to disturb an airplane’s sensitive
electronic systems. Today, mobile handsets emit high-powered signals
when searching for an available base station for incoming and
outgoing calls. Those high-powered signals can cause interference
with an aircraft’s electronic circuitry, especially when
it is out of reach of a base station.
Various solutions have been developed to overcome the limitations
related to on-board mobile telephony, according to Lambrette.
For example, deploying an on-board base station on an aircraft
reduces the emitted signal strength to a level that eliminates
noticeable interference. The signal is then backhauled via satellite
to the terrestrial telephony network. Any of the technologies
available today will allow a sufficient capacity for on-board
mobile telephony once a flight has reached cruising altitude.
Alliances and strategic partnerships will be key to maximizing
the market’s potential. “Many airlines will permit
and offer mobile telephony by 2006,” explains Lambrette.
“In order to develop this lucrative market, airlines and
mobile operators must quickly build alliances and sustainable
business models that can grow initial offers to maturity.”
He believes air travel with full mobile accessibility –
except for take off and landing – will be standard by 2010,
with usage rates exceeding 100 million passengers in Europe alone.
“Developments like this one could also be used as a competitive
advantage by an airline that decides to invest in the technology,”
said Gabriel Chahine, Principal, Booz Allen Hamilton. “At
least initially, this will enable airlines to have a profit maker.”
Lambrette cautions that mobile operators and airlines will only
sustain high-margin pricing during the introductory phase of this
service. After 2008, the projected market penetration is expected
to reduce the price per minute almost to the level of regular
mobile telephony. The average per-minute price is projected to
begin at 1 USD and drop to 50-75 Cent per-minute within three
to five years of market introduction.
Said Ghassan Hasbani, Principal Booz Allen Hamilton, “I
think we can conclude that this development will eventually be
second nature to air travelers in the not too distant future.
Before long we will have the inexpensive option of using our mobile
phones as we travel anywhere in the world.”
Other pre-conditions for success and growth in mobile telephony
include the option for travels to use their own mobile handsets
and business models that do not feature usage barriers, such as
credit card phones.
“These pre-conditions will have to be met to enable the
success of onboard base stations,” said Karim Sabbagh. “But
once airlines and developers realise the profit potential of this
technology, they will undoubtedly work together to overcome these