FINAL REPORT - Stakeholders - Ofcom

A VDL2 channel will provide 10 times the capacity of the existing VHF ACARS channel,
i.e. for Europe, where approximately 7 million kilobits are exchanged monthly today over
3 VHF channels, the effective capacity will be increased to 70 million kilobits which SITA
believes will more than adequately meet foreseen increases in AOC communications as
well as the requirements for ATS applications.
If the number of channels is increased from 3 to 6 this would effectively double the
capacity, i.e. enable the exchange of 140 million kilobits per month.
The price per kilobit of data exchanged is difficult to obtain and subject to commercial
agreements between SITA and individual airlines although aeronautical cost benefit
cases have used an estimated figure of £0.046 per kilobit. This values the revenue from
SITA’s current European business on ACARS at £1.3M per year per channel. The move
to VDL Mode 2 has the potential to increase the revenue to £13M per year per channel
for the European service. Assuming that SITA operate at10% profit before tax, each
channel has potential value of £1.3M per year.
Hence, assuming demand for data services exists and, experience in other fields
suggests that it does (although not necessarily at the relatively high data costs used by
SITA); there is strong commercial desire to use any spectrum that could be freed up in
the VHF band.
An early use of digital links might be for the uplink of aircraft information. Such an uplink
might provide a valuable service to general aviation users which, since the information
could include the location of restricted areas, could enhance safety of both GA and AT
class aircraft.
Assuming that GA operators would be prepared to pay an annual subscription of £300 26 ,
that 10% of the 20,000 GA fleet in the UK take up the service and that the basic
subscription service requires one 25 kHz channel, then the revenue generate per channel
is £600,000 per annum. Assuming the service is provided at a 10% profit rate, the value
generated is £60k per annum.
Clearly there is a strong potential to unlock spectrum for commercial use. The obvious
mechanism is a concerted drive to 8.33 kHz channelisation. The barriers are a) the need
to modify ground infrastructure and b) providing interoperability with GA.
Taking the example of GA first, the cost of equipping GA with new radios might be £20M
assuming 20000 aircraft, and £1000 per radio. The data value of 10 channels could be as
high as £20m per year.
It is important that the digital services are provided as efficiently as possible. Although
VDL Mode 2 provides a considerable improvement compared with ACARS, it is still not
particularly efficient. Studies have indicated that the effective data throughput of other
VDL modes (3 and 4) could be between 2 and 3 times higher than that of VDL Mode 2. It
is therefore possible to consider the use of AIP to encourage take up of more efficient
data modes.
There are at least two possible scenarios:
• A: allow airline choice at first adoption and support both modes within the ground
infrastructure
• B: allow VDL Mode 2 to predominate and then upgrade to the next mode.
26 This figure is based on the study team’s judgement and has been made for illustration.
The figure has not been validated with GA users.
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