AeroMobile Wants In on U.S. Airline Mobile Call Market, Says Win-Win for Everyone
AeroMobile is eager to get into the U.S. market if the FCC approves the use of cellphones in-flight, said Kevin Rogers, CEO of the mobile service provider for airlines. “The U.S. is just about the last country in the world to approve this,” he said in an interview Tuesday. The big four wireless carriers have been mum on their plans, but industry observers expect them to embrace the new revenue stream. The FCC at its Dec. 12 meeting is to consider a rulemaking notice proposing to allow cellphone use in-flight, which the agency clarified in an unusual Q-and-A notice on a pending item, wouldn’t require such use (CD Nov 26 p9).
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"There’s a lot of winners here,” said Rogers. His U.K.-based company is a GSM-authorized network operator that “happens to operate that network in aircraft,” Rogers explained. The system consists of a picocell inside the cabin, which a mobile subscriber’s phone would connect to assuming the provider -- AT&T, T-Mobile, etc. -- has an agreement in place with AeroMobile. “It’s an international roaming service,” Rogers said. Airlines typically get a cut of AeroMobile’s revenue; passengers would get the ability to use their phones and tablets en route; and carriers would increase their revenue base for roaming traffic, Rogers said.
"We've got quite a significant number of AT&T or T-Mobile subscribers” who fly on transatlantic routes using the service on the Atlantic over Europe, generating roaming revenue for those U.S. wireless carriers, Rogers said. “This is a revenue extension for the U.S. carriers,” he said. “Those revenues cannot be extended over the skies of the U.S.” AT&T and T-Mobile didn’t comment.
Tennessee lawmakers have threatened to block the FCC from making the change, warning of potential mid-air fisticuffs. (See separate report below in this issue.) After the FCC’s draft proposal went public, Delta quickly issued a statement saying it wouldn’t offer any cell service on its flights, pointing to longstanding passenger animus against the idea of cross-country cellphone talk. To Rogers, the hubbub over unwanted conversations is a “distraction,” he said. Of the 10 percent of cabin passengers that utilize AeroMobile’s service where it’s available, 70 percent of that usage is from text and data, Rogers said. Of the voice calls, call duration is only one or two minutes, he said. But Rogers said “if Delta Airlines cabin crew continue to object to voice, then Delta can still choose to deploy the system, they can just choose not to activate voice."
The other major in-flight mobile phone provider, OnAir, said in a statement Friday that it “totally supports” the FCC’s proposal. In-flight usage mirrors terrestrial usage, CEO Ian Dawkins said: Most people who use the service spend more time checking email and sending text messages than actually talking on the phone. “Forget the hyperbole about the chaos in-flight cell phone usage could cause,” continued Dawkins. “The issue simply hasn’t arisen anywhere in the world.”
The U.S. has been “the lone holdout on this technology,” said Michael Planey, co-founder of H&M Planey Consultants, an Alexandria, Va., firm that deals with emerging technologies in the airline market. In addition to offering more revenue for carriers and airlines, it’s an “enhanced customer service” providing value to “premium customers in particular,” said Planey, whose clients include airlines and telecom vendors that offer in-flight services.
Passenger fears of “being trapped next to some high schooler talking about the prom” are “completely unrealistic,” Planey said: The cost of this service will be prohibitive for years. In practicality, calls will be limited to a “couple minutes at a time,” he said, and rates won’t come down for a while because “the backhaul portion of this is so expensive.” Getting the equipment on the aircraft and certifying it is an “expensive process that requires continuous maintenance and upkeep,” he said. “It’s the reason that Internet prices haven’t gone to zero yet” on planes, he said: Companies are still trying to recoup the costs of the hardware and satellite capability via passenger charges.
A wireless attorney suspects there would be a natural appeal in a potential new revenue line. “The question is how profitable it would be,” the attorney said. It could require some capital-intensive investments on equipment, and there would be transactional and regulatory costs associated with establishing roaming agreements, said the lawyer. In any case, carriers have plenty of time to make decisions about if and when to get into the business, she said: The FCC’s process alone could take more than a year.