Jan. 23 (NBD) -- The long-awaited in-flight Wi-Fi has become a real part of our life. 

As of January 22, 13 Chinese airlines have announced their schedules to lift ban on using smartphone in-flight. 

A research report by The London School of Economics and Political Science says that the in-flight broadband has the potential to create a 130-billion-U.S.-dollar market within the next 20 years.

Wifi acess is projected to generate revenue for airliners from the following aspects: broadband access charges, e-commerce and destination shopping, advertising, and premium contents. By 2035, it is expected to generate 11 billion U.S. dollars for low cost carriers, the bulk of which will come from selling connectivity to passengers.

While bringing enormous opportunities to airlines, the in-flight Wi-Fi is expected to deal a blow to the original onboard businesses.

In-flight business model to change 

Traditional services onboard like cabin entertainment and in-flight advertising will be largely affected. 

Li Xiaojin, director of the institute of air-transport services at Civil Aviation University of China, told NBD that the onboard Wi-Fi is to in-flight magazines as the Internet is to the print media. Judging from the current situation, the adverse impact will emerge gradually. 

According to Li, the impact will be up to passengers' internet access experience onboard, time taken to change business elites' habits of reading magazines during flights, and the form and duration of advertisements. 

With the launch of the onboard Wi-Fi services, in-flight magazines and related media resources will no longer be the sole channel for passengers to get information. This will definitely divert the original advertising resources.   

The cabin entertainment equipment market will shrink as well with the introduction of the in-flight Wi-Fi, as the Internet is more appealing in contents, said Lin Zhijie, expert in the civil aviation industry. Cabin entertainment service providers and operators will likely be heavily affected. 

Bandwidth limitations of aviation satellites require solutions  

Globally, the in-flight Wi-Fi services are mainly based on satellites or the air-to-ground mode.

According to industry insiders, the satellite mode features a short network construction cycle and wide coverage, while the air-to-ground communication is vulnerable to geographic environments. 

Xie Ying, vice president of Shenzhen Donica Aviation Engineering Co., Ltd., told NBD that the onboard Wi-Fi systems under operation all adopt the satellite communication mode. However, a recent test conducted by a CCTV program showed that the data rate is not satisfying at present, coming in at around 100k/s. 

To provide better access services at low costs, high-throughput Ka-band satellites should be employed to address limitations of aviation satellites. 

Chen Gang, deputy general manager for network operation and maintenance at China Telecom, stated in an interview with NBD that his company is currently using the Ku-band satellite and is now in talks with aerospace companies to shift to high-throughput Ka-band satellites. 

China Unicom noted that it has the capability to run Ku- and Ka-band satellite communication links simultaneously. 

In-flight broadband 100x more expensive than ground services

To date, China's top three telecom carriers have gained the approval from the Ministry of Industry and Information Technology to offer the in-flight communication services. 

China Telecom has achieved preliminary results in the niche sector. Data from the company shows that it is providing communication services to 112 aircrafts of domestic airlines as well as more than 700 airplanes of 31 foreign airlines. 

China Unicom said that its joint venture UnicomAirNet has signed in-flight internet testing service agreements with China Eastern Airlines and China Southern Airlines, expected to launch pre-commercial in-flight broadband services soon. 

China Mobile has also inked pacts with China Eastern Airlines, China Southern Airlines, and XiamenAir, which are currently refitting airlines so as to provide such services. 

Xie Ying told NBD that China Telecom is a major provider of in-flight Wi-Fi solutions in China, which could be largely attributed to the telco's dedicated satellite station (main station) and business operation platform. 

With regard to the future charging mode for the in-flight broadband services, China Telecom said that it is negotiating the cooperation model with airlines. Currently, airlines are offering the in-flight Wi-Fi to passengers for free. 

Xie explained to NBD that telecom carriers don't charge passengers directly, but sell the onboard broadband services to airlines by data traffic. Prices of the in-flight network access services are about 100 times more expensive than internet services on the ground. 

Providing communication services onboard will not be the only source of profits for telecom carriers in the niche sector. 

In the future, China Telecom will open its business operation platform, and will also flex its muscle to grab a share of the in-flight live stream, big data in aviation, and other value-added areas.  

Email: lansuying@nbd.com.cn