Market research, financial analysis and consulting on wireless technologies and services

Passengers on the Salt Lake City FrontRunner
Wireless broadband on trains, buses and planes has moved beyond the pilot phase to full rollouts. There is no longer the need for proof-of-concept trials, but questions about what is the best business model, how much bandwidth is needed, and what are the best technologies to support train applications are still open. The good news is, however, the discussion of these questions can now be grounded on experiences and data from the operators that have already taken the plunge.

This recent article talks about the business case for train operators that use trackside WiMAX-based and cellular solutions. Others have used satellite or cellular networks to backhaul the data traffic from trains. Regardless of the technology used, a few trends are emerging.

Passengers love Wi-Fi on trains, but few are willing to pay for it. A business model that crucially depends on revenues from passengers Internet access is very difficult to justify. The addition of advertisement revenues does not usually bring the operator to profitability either.

Ads for Wi-Fi on trains from Virgin in the UK
Free Wi-Fi access is gaining ground, with operators like National Express in the UK moving from per-pay to free access. National Express sees the service as an amenity to passengers and a differentiator to steal customers from competing train operators and from alternative forms of transportation (car, plane).  Among their 2,000 users per day on board of Virgin Trains in the UK, 80% are from first class, where passengers have free Wi-Fi access.  With free access, National Express has seen usage rise to 6,000 connections per day.

Popularity of the Wi-Fi access means increasing demands on the backhaul network from the train. Virgin UK passengers are connected for an average of 74 minutes and use 14 MB per session.  Traffic from National Express passengers follows a similar pattern. MBTA in Boston has on average 12 connected passengers per car. For a five-car train, this translates in an average throughput of 1.5 MB per train. Peak rates are much higher as public transportation use is highly concentrated around work-commuting hours. Furthermore, traffic demand is growing very quickly from increase adoption of mobile devices with wireless connectivity and from demand from individual users. With more connected passengers, each generating more traffic, the demand on train networks is escalating quickly.

Adoption of safety and operational applications is going to put additional pressure on the resources available on wireless broadband networks on trains. While still largely in a planning mode, train operators are keen to explore applications that go beyond public internet access and may include remote surveillance, mechanical and safety monitoring, ticketing, or passenger information and entertainment. We see this as the most interesting growing area within the rail industry and the one that may hold key to profitability for rail operators deploying wireless broadband networks.

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