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Report on E-business

Travellers cruise high seas - and the Net

Cruise lines are scurrying to
add satellite Internet equipment to fleets

Friday, May 25, 2001

It was choppy markets rather than choppy seas that made Tracy Simpson hesitate about taking a two-week cruise earlier this month.

"I was really worried about taking a vacation so far from a phone in this market," said the manager of a privately held family trust fund in Toronto. Nevertheless, she went ahead with the trip from Venice to Barcelona aboard the Crystal Symphony, which included several days at sea without a port stop.

And she was not left adrift when it came to staying in touch with those markets: Right on board the ship, she was able to make regular visits to its business centre and take full advantage of 24-hour e-mail and Internet connections. She even used one of the centre's laptop computers while on deck.

"I wouldn't trade in a fast market based only on Web data. But it gave me a picture of what was happening in the office," she said from aboard the ship.

This may not be everyone's idea of getting away from it all, but the capability to offer continuous Web surfing is the new frontier for cruise lines, which are rushing this year to add satellite Internet equipment to their fleets.

The demand has hit like a perfect storm. Only two years ago, the Norwegian Sky, launched by Miami-based Norwegian Cruise Line, a division of Star Cruises Ltd. of Singapore, was the first to offer 24-hour Web connections at sea. Its seagoing computer area had nine terminals with Internet access for passenger use.

This year, the Norwegian Star and the Norwegian Sun will start service with 40 terminals for passengers in a business centre and several more for crew. There will also be ports in each room with Internet access for passengers' laptop computers. The ships will be sailing worldwide itineraries.

Until 1997, satellite-uplink technology was not advanced enough to maintain an inexpensive continuous connection on a platform that was constantly moving. Ship-to-shore connections were routed through the radio room on the ship, where satellite phone calls could only be placed one at a time, at a price that could top $20 a minute.

Now, with dedicated maritime communications satellites, ships of all sizes can become hubs in cyberspace, and the cost has dropped to an average of 75 cents (U.S.) to a dollar a minute.

"A lot of people today can't conceive of going on a vacation without being connected. For some, it is the only way they would take a long cruise," said Mimi Weisband, a spokeswoman for Los Angeles-based Crystal Cruises, a unit of Nippon Yusen Kaisha of Tokyo.

In 1997, Crystal installed a system it designed in-house to let passengers send and receive e-mail as phone messages transmitted between other satellite calls. Crystal has since added a link of its own design for continuous connection to the Internet.

As many as two-thirds of Crystal's cruise passengers now use e-mail, up from 10 per cent in 1997, according to David McFarland, a full-time computer instructor on the Crystal Symphony.

Statistics have yet to be gathered on how many people on vacation use the Internet for business, but many travel agents say Web connectivity has become a factor as important as entertainment and recreational facilities when people choose a ship, said Diana Orban, spokeswoman for the Cruise Lines International Association, the cruise-industry lobby group.

Rewiring the more than 200 cruise ships in service is expensive, averaging about $200,000 for each ship, but the lines expect the Internet computer areas to be profitable because they receive a portion of the charge for each session. A typical installation also includes a coffee and snack bar.

This has made for good business for Digital Seas International Inc., based in Sunrise, Fla., which is the largest installer of Net equipment on ships. Most of the large cruise lines have contracted to take the system it has developed through wholly owned unit Verestar Inc.

DSI has teamed with Maritime Telecommunications Network Inc. of Miami, which manages a system of satellites for maritime communication that covers most of the world. Signals are received at ground stations and linked to the Web at a price that averages 75 cents a minute to the customer. On many of the ships, DSI also rents Compaq Computer Corp. laptop computers to passengers for about $10 a day.

Carnival Corp. of Miami has contracted with DSI for its five fleets, including Carnival Cruises, Cunard Line, Holland America Line, Seabourn Cruises and Costa Cruises. The ships will be fitted out as they come into drydock this year, according to a recent company news release.

Two other conglomerates in the cruise market are aggressively following suit.

Princess Cruises, based in Santa Clarita, Calif., a division of P&O Princess Cruises PLC of London, is installing a system developed in an alliance with America Online Inc. of Dulles, Va.

Over the next year, Princess Cruises' worldwide fleet of 10 ships will be fitted with equipment similar to the 25 AOL terminals in the buisiness centre of the Golden Princess, which began service this month. The system's satellite-relay system was developed by Harris Corp. of Melbourne, Fla.

In the exclusive deal with Princess, passengers who are already AOL customers can access the same account they have at home, including bookmarks on their Internet browser, at a fee of $7.50 for each 15 minutes. Non-AOL customers will be offered a temporary subscription while on the ship.

A competitor, Royal Caribbean Cruises Ltd. of Miami, is installing a system designed in-house using International Business Machines Corp. personal computers and servers.

Celebrity Cruises, a Royal Caribbean subsidiary, has a new ship that may be the most wired to date. The 1,950-passenger Infinity provides a port in each cabin for a dial-up Internet service provider that can link to the user's home computer. Premium-priced suites come equipped with an IBM 390 laptop and a Hewlett-Packard 340 printer. In lower-priced cabins, guests can plug in if they bring their own laptop.

The fast growth of Internet capability has seen some lines playing catch-up even with new ships. Radisson Seven Seas Cruises of Fort Lauderdale, Fla., a division of Carlson Companies Inc. of Minnetonka, Minn.,launched the Seven Seas Navigator last year with e-mail capabilities but not the Internet. A sister ship, Seven Seas Mariner, launched this year not only offers Internet access but three private offices with terminals.

Silversea Cruises Ltd. of Miami is installing a 24-hour satellite link to Bloomberg Professional financial-news terminals and in-suite Bloomberg television shows.

Additional twists are being added to some of the new installations to provide a marketing edge. Many of the Digital Seas terminals include cameras that allow passengers to e-mail "video postcards" up to 20 seconds long.

Sending one will at least let your colleagues in the office know you are still thinking of work while on vacation.

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