SCI/VERKEHR Cologne 2010 23333333333333333333333 RAILWAY WI-FI APPLICATIONS Current Projects and Global Developments SCI Verkehr GmbH www.sci.de RAILWAY WI-FI APPLICATIONS 1
SCI Verkehr GmbH www.sci.de RAILWAY WI-FI APPLICATIONS 2
RAILWAY WI-FI APPLICATIONS CURRENT PROJECTS AND GLOBAL DEVELOPMENTS For the current study in the new series of SCI Compactstudies we look at the digital traveller and how railway operators around the world meet the new requierements these customers pose by implementing Wi-Fi applications in their passenger trains. In the last years, passenger railway travel has been facing not only increased transport volumes, operative costs and safety awareness. Changing communication and information patterns from the generation of the digital traveller lead to additional new passenger requirements concerning effective usage of travel. Railway operators are increasingly driven to offer on-board Wi-Fi solutions. Especially real-time applications (i.e. Internet, CCTV, current information on timetable and connections, ticketing/payment feature, etc.) will become considerably sought after. With precisely and professionally analysed and evaluated information concerning current plans, investment budgets and future demand for rail-related products, SCI Verkehr delivers an objective contribution to the discussion surrounding the future market for railway Wi-Fi applications. We detail this topic by - identifying the current and future passenger transport market - gathering general information regarding customer requirements - profiling current technology suppliers - detailling current and future known projects regarding Wi-Fi railway applications - supplying a first estimate for future market volumes. This Compact Study is based on information collected from multiple (official and unofficial) sources that have been consolidated, rationalised and interpreted using SCI Verkehr s unique data sources and expertise gained during 16 years of serving the railway industry. Contact: Christian Bessler Tel: +49 221 931 78 20 Fax +49 221 931 78 78 E-Mail: c.bessler@sci.de SCI Verkehr GmbH is an independent consultancy company for the mobility sector with activities around the world. We specialise first and foremost on strategic consultancy for companies and the public sector in the railway and logistics sectors. As a renowned industry insider, we focus on market and competition aspects with consultants from a wide variety of specialist fields and an extensive network of experts in Germany and abroad. SCI CompactStudies is a new series of studies from SCI Verkehr with which we aim to round off our broad range of studies and consultancy services. In our SCI CompactStudies, we analyse the current issues and hot topics in a condensed format. We provide an overview of the background, market developments, projects, opinions, trends and prospects, thus offering an even more reasonably priced alternative to the popular SCI MultiClient Studies. SCI Verkehr GmbH www.sci.de RAILWAY WI-FI APPLICATIONS 3
TABLE OF CONTENTS 1 Executive Summary... 11 2 Drivers and Market Factors... 13 2.1 Relevant Global Megatrends... 13 2.2 Rail Transport Performance... 16 2.3 Railway Market... 20 3 Customer Requirements... 23 3.1 Passenger Behaviour and Needs... 23 3.2 Operational Requirements... 27 3.3 Requirements from Developments in other Industries... 28 4 Major Suppliers... 29 5 Projects and current status... 37 5.1 Global Overview... 38 5.2 First Movers... 39 5.3 Large Potentials... 41 6 Market Estimates... 45 Appendix: Key Figures of Selected Countries... 47 Australia... 48 Brazil... 49 Canada... 50 China... 51 Denmark... 52 Finland... 53 France... 54 Germany... 55 India... 56 Japan... 57 Netherlands... 58 Norway... 59 Russia... 60 Sweden... 61 United Kingdom... 62 USA... 64 SCI Verkehr GmbH www.sci.de RAILWAY WI-FI APPLICATIONS 4
1. Executive Summary SCI Verkehr found that the current status and future potential for the introduction of Wi-Fi technology in different countries depends on different factor such as - the way a society communicates (e.g. Anglo-Saxon countries) - how a population embraces new technology (e.g. Scandinavian countries, Japan) - existing railway infrastructure and the railway market (e.g. Germany, Russia) - the political system and available funds (e.g.india, CIS countries) SCI Verkehr could identify 25 Wi-Fi projects in worldwide regular operation and as much projects that are already in trial operation in 2010. Services cover a line length of 10 000 km and around 1 000 trains although not all vehicles are fitted with Wi-Fi technology. The main geographical focus of the projects is North America (Canada and USA) as well as UK with half of the projects. Western Europe counts for 11 projects in 5 countries. UK Virgin W ifi Hotsport Heathrow Express W ifi Grand Central W ifi Southern WiMAX East Coast WiFi CrossCountry W ifi DENMARK S-train Copenhagen Free WiFi on Arriva s trains SWEDEN SJ Internet on track LATVIA Riga - Moscow RUSSIA Sapsan Moscow St. Petersburg CANADA Québec City-W indsor corridor Toronto - Montreal KAZAKHSTAN Tulpar High Speed Internet TAIWAN THSR WiFi USA MBTA WiFi Commuter Rail Connect TRE WiFi UTA WiFi ACE WiFi BELGIUM ThalysNet SWITZERLAND SBB SOUTH AFRICA Tshwane Express GERMANY DB Hotspot UAE Dubai Metro WiMAX CHINA Beijing Tianjin MTR Airport Express INDIA Maharajas Express WIFI Figure 1: Wi-Fi applications for rail passengers: Major systems in regular operation Until now, existing Wi-Fi projects are covering mainly special lines or services but 2010 seems to be the tipping point. SCI Verkehr estimates that the number of trains that will be equipped with Wi-Fi applications will more than double until 2020. In the future SCI expects them to cover metropolitan areas and regional networks such as offered already by Thalys, MBTA, MTA, in Norway, Sweden or Finland. Projects will also be increasing in contract values and size. SCI Verkehr estimates that passengers of nearly all high-speed and inter-city routes in developed countries are potential users of Wi-Fi. In addition, existing projects will generate further demand in implementing higher connection rates and additional services (e.g. passenger entertainment, ticketing and shopping services). It is expected that high-speed transport will show the most dynamic growth and that by 2020, Wi-Fi applications will be installed in more than 80% of the worldwide highspeed trains. ( ) SCI Verkehr GmbH www.sci.de RAILWAY WI-FI APPLICATIONS 5
3. Customer Requirements Modern livestyles include the usage of real-time mobile communication devices on-the-go and change the expectations that passengers have towards their mode of transport. In the information age, passengers increasingly demand the ability to use their electronic devices for information and communication purposes. Making efficient use of travel time is the key requirement that railway operators have to meet. Operators will therefore be increasingly driven by customers' requirements to offer on-train Wi-Fi solutions. Especially real-time applications (i.e. Internet, CCTV, current information on timetable and connections, ticketing/payment feature, etc.) will become considerably sought after. But those Digital Travellers will provide railway operators also the opportunity to increase revenue, improve customer service and efficiency. Mobile technologies will allow train operators and passengers to stay connected for longer periods of time offering the operator the opportunity to strengthen his relationship with the customers. ( ) Travel Patterns Factors such as distance travelled, average time on board and the type of passenger determine to what degree and scope people will accept new communication and information services. The average travel time differs profoundly in different transport segments and also in different countries, especially in high-speed transport. Average Average Share of Share of High-Speed distance time 1st class business travelled onboard passengers passengers (in km) (in min) (in %) (in %) Germany 311 n/a 15% 35% 1 France 455 n/a 23% n. a. United Kingdom 160 ~ 80-140 10% 2 36% 2 USA ~600 345 15% n. a. 3 South Korea 269 ~120-180 9% n. a. 1 reference year: 2000 2 Virgin Trains 3 Besides first class cars, Acela trains usually consist only of business and diner cars For airport expresses, travel characteristics seem to be generally equal. People spent between 30 to 40 minutes on board. Airport Express Average distance travelled Average time onboard Share of 1st class passengers Share of business passengers (in km) (in min) (in %) (in %) Germany - - - - France - - - - United Kingdom ~40 25-35 n/a n/a USA - - - - Russia 32 35-42 n. a. 20% ( ) SCI Verkehr GmbH www.sci.de RAILWAY WI-FI APPLICATIONS 6
5. Projects and current status 5.1 Global Overview ( ) Implementation of Wi-Fi projects in passenger railway regular operation started in 2005 and slowly increased over the years. Since 2008, Wi-Fi applications in trains have gained international market acceptance with the year 2010 showing so far the most projects and countries. Some larger projects have already been announced for the years 2011 and 2012. 2005 2006 2007 2008 2009 2010 2011 2012 total UK 1 1 1 2 2 7 Sweden 1 1 Japan 1 2 3 Canada 1 1 USA 1 1 2 2 1 7 China 2 2 4 Denmark 1 1 1 3 Germany 1 1 Switzerland 1 1 Belgium 1 1 Netherland 1 1 2 Russia 1 1 2 Kazakhstan 1 1 Latvia 1 1 UAE 1 1 Finland 2 1 3 France 1 1 India 1 1 Norway 1 1 2 Taiwan 1 1 2 Argentina 1 1 Australia 1 1 Irland 1 1 Italy 1 1 South Africa 1 1 South Korea 1 1 total 3 3 2 7 11 18 7 1 52 ( ) SCI Verkehr GmbH www.sci.de RAILWAY WI-FI APPLICATIONS 7
5.2 First Movers The First Movers have adopted the Wi-Fi technology early on for large parts of their railway system mostly due to customer demand and a certain openness to embrace new communication technology in their society. Examples are, among others: Sweden Sweden boasts the lighthouse project in railway Wi-Fi applications. The first trial started in 2003 together with Icomera. Since 2005 SJ, the former state railway, offers internet on track on its whole network of inter-city and commuter lines. The Swedish railway passenger transport volume has been growing since 2005 with a slight slump in 2009. Growth is due mainly to mainline transportation and high-speed lines from Stockholm to Gothenburg and Malmo. Sweden will further upgrade infrastructure, especially with the Fehrmarnbelt bridge, and the construction of new high-speed lines. Therefore, Sweden will soon dispose of an efficient high-speed network. SJ is the largest operator. Competition exists in regional traffic where, i.e., SJ cooperates with DB Sverige. Urban rail transport performance grows relatively moderately. Urban rail is operated by a number of different operators. Potential for further Wi-Fi applications arises as high-speed traffic will be further introduced. ( ) 6. Market Estimates As 2010 seems to be the tipping point, an increasing number of countries will equip larger parts of their passenger railway network with Wi-Fi technology. SCI Verkehr estimates a global market volume of about 1,400 units per year that will be equipped with Wi-Fi applications in the coming five years. This volume will increase to a yearly average of about 2,100 to 2,400 trains in the years 2016 to 2010. 2500 2000 250-300 150-200 1500 100 700-800 Mainline Transport 1000 500 400 400 500 1000-1100 High-Speed Rail Urban Rail Commuter Rail Figure 18: Estimated Wi-Fi market volume per segment 2011-2020 0 2011-2015 2016-2020 SCI Verkehr GmbH ( ) SCI Verkehr GmbH www.sci.de RAILWAY WI-FI APPLICATIONS 8
Appendix: Key Figures of Selected Countries Japan Transport performance (in billion kilometres) Railway network length in 2010 (in route kilometres) 2005 2010 2015 High-speed (HST) 1 82 79 94 High-speed rail 2,377 Mainline (excl. HST) 1 261 266 270 Conventional rail 23,669 Urban rail 1 48.1 50.6 52.7 Light-rail transport 225 Freight transport 2 22.8 21.2 23.7 Metro 766 WI-FI PROJECTS PROJECT NAME LINE/ OPERATOR CURRENT STATUS START OF REGULAR OPERATION NUMBER OF TRAINS APPLI- CATIONS PRICING DESCRIPTION/ BUDGETS Wi-Fi Express Shinkansen Wi-Fi Narita Express Wi-Fi Tsukuba Express (Akihabara - Tsukuba) JR Central (Tokyo- Yokahoma-Nagoya- Kyoto-Osaka) JR East/Narita Express line (Narita International Airport - Tokyo) Regular Operation 2006 30 Wi-Fi Regular Operation 2009 96 Wi-Fi Trial operation 2009 22 Internet PIT - About 4 for a day - About 13 for a month Subscription to UQ Wi-Fi or BB Mobile Point necessary Commuter trains, tests in August 2005 and commercial operation implemented in 2006. NTT High-Speed trains, In 2009 44 trains were equiped with Wi-Fi technology. NTT Airport Express, new type of car (E259) to be used on the line by June 2009 equipment of 1 coach in business class. 1 pkm 2 tkm SCI Verkehr GmbH www.sci.de RAILWAY WI-FI APPLICATIONS 9
Order form Compact study WiFi Please fax to: + 49 (221) 931 78-78 SCI Verkehr GmbH Cologne Office FAO Mr. Christian Bessler I would like to order the Compact study WI-FI RAILWAY APPLICATIONS CURRENT PROJECTS AND GLOBAL DEVELOPMENTS Quantity Issue Language Single price* Total price* First copy print English 1,400 + additional copies ** English 300 Electronic version*** English 1,300 Electronic version English + 1 print version*** 1,500 Total price* Company Contact person (Title, first name, surname) Position Address (Street, town, postcode) VAT Number (for customers in member states of the European Union) or other invoicing address or order number Tel Fax Email I would like to pay by prepayment / I would like to pay by credit card**** / Invoice Please charge the total sum to my credit card. Card number / / / Valid until Visa Eurocard / Mastercard CVV number Date Signature / stamp * All prices exclude delivery costs and VAT ** Only in combination with a first copy in the same language *** Electronic version (single-user version/pdf). Total three users possible. Printing is permitted. **** Additionally 5% credit card payment charges Orders subject to our general terms and conditions. Place of jurisdiction is Hamburg. SCI Verkehr GmbH Cologne Office Place of jurisdiction: Schanzenstraße 117 Vor den Siebenburgen 2 Country court Hamburg 20357 Hamburg / Germany 50676 Cologne Geschäfts-Nr. 66 HR B 56 572 Tel: +49 (0) 40 5071970 Germany Deutsche Bank Hamburg Fax: +49 (0) 40 50719720 Tel: +49 (0) 221 931 78-0 Bank code: 200 700 24 www.sci.de Fax: +49 (0) 221 931 78-78 Account number: 649 173 200
Hamburg Office SCI Verkehr GmbH Schanzenstraße 117 20357 Hamburg Tel.: +49 (0)40 5071970 Fax: +49 (0)40 50719720 E-Mail: info@sci.de www.sci.de Imprint: SCI Verkehr GmbH Cologne Office SCI Verkehr GmbH Vor den Siebenburgen 2 50676 Köln Tel.: +49 (0)221 931780 Fax: +49 (0)221 9317878 Berlin Office SCI Verkehr GmbH Novalisstraße 7 10115 Berlin Tel.: +49 (0)30 2844540 Fax: +49 (0)30 28445420