Wednesday, March 28, 2007

Interview with BT's Dan Marks

I had an interview with Dan Marks, the CEO of BT Vision, BT's new IPTV service that was announced in December 2006. He stated that BT Vision is currently in a shake down phase and has 5,000 paying subscribers.

Dan stated that BT Vision is a response to the unique market conditions in the UK. About half of the homes use pay TV with the larger portion using satellite and the smaller using cable. The other half are quite resistant to pay TV and are adopting the Freeview digital torrential service a rapid rate.

There is no cost to the subscriber for the BT Vision service. BT will provide a Phillips set-top box for free. The subscriber can then use it to watch Freeview content at not cost, and, if they want, subscribe for BT subscription services or order paid on demand services. BT has pulled together a strong set of content for the service including films and the English soccer leagues.

Dan said that BT is on schedule for a Spring 2006 full market rollout. He did not give a precise date, but indicated that it would likely be later in Spring rather than earlier. He said that the Microsoft IPTV Edition software is ready to scale. He also agreed that in one sense BT's
implementation is simpler than others because it does not provide broadcast channels and need to support fast channel change. On the other hand, he pointed out that BT Vision had some important and difficult features that included DVR services on the set-top box that had to be worked out.

The BT strategy of offering the set-top box and access to Freeview for free should help it to penetrate the UK market quickly. In fact I am going to have to go back and look at my forecast again. BT offers some compelling services that include an integrated program guide, sports program, and the ability to access previously broadcast programs that users should find quite attractive. BT should do well with this offering.

PCCW Achieves Forecast

PCCW in Hong Kong ended 2006 with 758 thousand IPTV subscribers, which is 8 thousand than the 750 thousand that it had forecast for the year. This is an increase of 209 thousand increase over the 549 thousand IPTV subscribers that it had at the end of 2006. PCCW's broadband subscribers grew to 1.117 million at the end of 2006 from 953 thousand at the end of 2005.

PCCW received HK$739 million (US$95 million) in IPTV and content revenue in 2006. 501 thousand of the 750 thousand IPTV subscribers are pay TV subscribers. (The remaining 249 thousand IPTV subscribers take only the free channels included in the broadband subscription.) The ARPU for IPTV and interactive services grew to HK$140 (US$18) at the end of 2006 compared to HK$114 (US$15) at the end of 2005.)

PCCW added more than 30 TV channels in 2006 bringing its total to 120. This included exclusive rights for broadcasting the English Premier League (EPL) and the Union of European Football Associations (UEFA) soccer matches. PCCW plans to introduce HD in H2 2007 using ADSL-2+ at 18 Mbps..

PCCW's 2006 results are available at Take a look at both the Annual Results Announcement and the Annual Results Presentation.

PCCW continues to add IPTV subscribers at a strong rate and to meet its own forecasts for its business. I have stopped second guessing them and accept their projections even though they are in a saturated broadband market. PCCW's IPTV service has been an important factor in its ability to add broadband market share and to retain basic telephone customers.

Verizon Getting MDU Act Together

LightReading published an article today discussing how far Verizon has to go to address the MDU market with its FiOS FTTP service. Verizon is bringing FiOS to single family homes but is just starting to address the MDU market. These MDUs account for about 25 percent of the homes in Verizon's territory. Bringing FiOS to the MDUs requires negotiating with each landlord individually. Verizon will use fiber or VDSL to bring the service to each unit within the building.

You can see the full LightReading article at

This is an important step for Verizon. MDUs are very important in dense metropolitan areas such as Boston and Manhattan.

Chunghwa IPTV Grows 150%

Chunghwa Telecom's IPTV subscriber base grew from 99 thousand at the end of 2005 to 249 thousand at the end of 2006, an increase of 150 percent. The number of broadband subscribers in Taiwan grew to 4.4 million. The company added 197 thousand new ADSL subscribers and 169 thousand new FTTB subscribers during the year.

Chunghwa seems to have resolved the technical issues that held it back in 2004 and 2005 and is making good progress with its MOD IPTV service. Its subscriber growth should be as good or better than last year.

Monday, March 26, 2007

CCID Says 22M IPTV Subs in China in 2011

CCID is a consulting company that has come out with a forecast for IPTV in China. It states that there were 267 thousand IPTV subscribers at the end of 2005 and 552 thousand at the end of 2006. CCID has produced a forecast for IPTV in China that shows 21.9 million IPTV subscribers at the end of 2011.

A good summary of CCID's findings can be found at

Our own numbers for China for 2005 and 2006 are right in line with CCID. However, we are less aggressive in our long term forecast. Our forecast for 2011 is 12.5 million subscribers, which is significant but much less than CCID's 21.9 million. CCID is closer to the Chinese market than we are, but we feel there is good reason to be conservative. There is a lot of uncertainty in China depending on the actions of the Chinese government. We will watch this market closely and will be happy to increase our l0ng term numbers as we see the market developing more quickly than we have anticipated.

Saturday, March 24, 2007

FastWeb to Pay 300M Euro Dividend

FastWeb's board of directors approved on Friday March 23 a total dividend payment of 300 million euros to its stock holders in the face of a consolidated net loss of 123.6 million euros for 2006. FastWeb has the cash for the dividend because it spent less on its network expansion than was originally budgeted.

This dividend will be 3.77 euros per share and will take place on October 25, 200. More than 50 million euros of this dividend will go to Silvio Scaglia, FastWeb's founder and largest share holder.

This dividend is being made because FastWeb could not find a buyer during a search in 2005. It gives Scaglia a way of pulling a significant amount of cash from his FastWeb holdings. Other than to satisfy Scaglia, it was never clear why this was a good idea for FastWeb.

Of course, the Swisscom will make this moot. Scaglia should wind up with more than 500 million euros of cash from that deal when it closes.

Microsoft Subscriber Numbers

I met with some Microsoft folks yesterday at Sigma Design's 25th anniversary party at ATT Park in San Francisco. Sigma has come through a tough period starting with the telecom crash in 2000 and is starting to do pretty well.

Microsoft was there with a canned demonstration of its IPTV Edition software. It was all running off of a server since ATT does not offer its U-verse IPTV service in San Francisco yet.

Microsoft told me that their subscriber numbers are running in the low six figures. They said that there are about 40 thousand at Deutsche Telekom's Club Internet in France. Swisscom said they had 30 thousand orders and I have hear that Deutsche Telecom has 25 thousand subscribers. Assuming 10 thousand for AT&T puts them into six figures, so this number appears consistent.

Microsoft in effect admitted to being late and causing delays, particularly in ATT's IPTV rollout. There were comments like "who ever heard of a large software project that wasn't on time".

Microsoft is clearly making progress. I will not be comfortable that it is over the hump until the ATT numbers really start to grow. Of course, it will help when I can subscribe myself here in San Francisco and give it a road test. They say that will happen soon.

Just one note of caution is that Club Internet, like all of the broadband suppliers in France, includes IPTV as part of a basic broadband subscription. That does not necessarily mean that people actually watch it. The 40 thousand IPTV subscribers at Club Internet probably do not put nearly the load on the system that 40 thousand ATT U-verse subscribers would.

Friday, March 23, 2007

France Telecom to Fiber Slovakia

France Telecom's Orange will spend 32 million euros to bring FTTH to 200 thousand homes in 10 cities in Slovakia by the end of 2007. Orange has government approval and has signed agreements with landlords.

It appears that this is an MDU fiber to the building deployment since the cost per home passed is about 160 euros. This is consistent with MDU fiber costs that City Telecom has experienced in Hong Kong. It appears that IPTV will be an important application for this new network.

Wednesday, March 21, 2007

Envivio has China's AVS Encode

Envivio of South San Francisco California has announced that its IPTV encoders now support China's AVS encoding standard. The company will demonstrate its AVS encoder at CCBN in Beijing at the end of March.

All of the intellectual property for AVS is owned by China. The intellectual property behind the MPEG-4 AVC video encoding standard is owned by western companies. Using AVS eliminates the requirement to make payments to companies outside of China to use MPEG-4 AVC. The AVS standard is broader in that it includes contains video, audio and digital rights management AVS became the national standard in China in April 2005.

Information about AVS may be found at:

It is clear how having a separate standard helps China from a licensing point of view. China is working to own its own intellectual property and to keep a much higher portion of systems revenue in China. There seems to be no strong technical or performance reason for a separate standard.

Tuesday, March 20, 2007

Sasktel Adopts ADSL-2+ Strategy

Sasktel is the incumbent carrier in Saskatchewan, Canada. It has been offering its Max IPTV service since September 2002, which makes it one of the real pioneers. It is currently upgrading its network to provide 28 Mbps to each home using two pairs per home and ADSL-2+. It supports up to four TVs in each home including one HD stream along with a 5 Mbps data service.

Sasktel's IPTV Vendors include:
  • Alcatel-Lucent DSLAMs
  • Tandberg video headend
  • Harmonic video headend
  • Alcatel middleware
  • Kasenna video on demand servers
  • Widevine content protection/digital rights management
  • Pace set-top boxes
  • Motorola set-top boxes
SaskTel plans to invest $118 million U.S. in 2007 and $267 million U.S. over the next five years to install remote systems to bring its home within range of its ADSL-2+ service by reducing the maximum loop length from 2.5 km. to 900 m.

Sasktel had 51 thousand subscribers at the end of 2006 out of 225 thousand homes passed. This is 23 percent penetration in a market with strong competition from Shaw Cable.

Sasktel has enjoyed steady progress with its IPTV offering. This upgrade will keep it competitive by permitting it to support HD and more TVs in the home. It is also interesting that Sasktel chose ADSL-2+ technology with two lines per subscriber. This provides longer loop lengths and is probably significantly less costly than VDSL because fewer remotes are required and because there is probably not that much difference in cost between two ADSL-2+ interfaces and one VDSL interface.

Monday, March 19, 2007

Open IPTV Forum Formed

ATT, Ericsson, France Telecom, Panasonic, Phillips, Samsung, Siemens Networks, Sony and Telecom Italia have formed the Open IPTV Forum that will work to define an interoperable end to end specification for the delivery of IPTV services. It will work to aggregate the diverse standards from other bodies into a complete delivery system. It will also work to accelerate the full standardization of IPTV technologies. It plans to establish requirements and architecture specifications by September 2007 and protocol specifications by December 2007.

Initially the Forum will consist of the founding member companies, but will be open for other companies at a later time.

The Forum's website is at:

This is an interesting organization. Note that Alcatel-Lucent and Microsoft are missing but ATT, one of their biggest customers, is a founding member. There is a clear need for further IPTV standards, particularly at the systems level. ATIS in the U.S. and the ITU at an international level are attacking this problem.

I have requested a briefing with them to get a better understanding of what they are doing and why. I will report what I find.

Thursday, March 15, 2007

BSNL Launches IPTV in India

BSNL, the seventh largest telecom company in the world, launched an IPTV service in Pune, India. This service provides access to 100 broadcast channels along with video on demand service. This IPTV service completes a triple play offering that also includes Internet access and VoIP.

BSNL joins MTNL as an IPTV service provider in India. It is expected that Reliance will introduce its own service by the end of 2007. While the market potential in India is huge, it will take a long time to develop. There are only about 2 million broadband subscribers, so that the number of homes that are capable of using IPTV is quite small. The full market potential of IPTV will take many years to develop.

IPTV Confidence Building

Accenture has released its third survey on IPTV. This one shows strong confidence in the outlook for IPTV revenues in telecom executives is almost evenly strong in every geographic area of the world. A summary is provided in this post but the report is well worth reading and can be found at

The survey found advertising and subscription fees will be the most important sources of IPTV revenue. It also found that the most important business benefit of IPTV is establishing new revenue streams followed by acquiring new customers and increasing the take up of broadband services. The survey found that the most important obstacle to IPTV adoption is video quality issues today and increased competition from cable and satellite services in the future.

This is a very interesting survey that is well worth reading. If you have not read the previous two, you should download them and read them as well.

What was surprising was the importance put on advanced advertising strategies, none of which have appeared as a part of an IPTV service as yet. The short term concern about quality shows the immaturity of these services. Competition will become the major issue before long.

SureWest Grows to 19,657 IPT Subscribers

SureWest is a telephone company that is both an incumbent and a competitive carrier in areas around Sacramento, California. It currently has 146 thousand access lines, which makes it one of the largest U.S. independent telephone companies.

It has been a leading IPTV company in the U.S. based on a service that is offered over ADSL in its incumbent areas and over FTTH services where it offers competitive services. Its IPTV subscribers grew from 19,657 at the end of 2006 compared to 16,138 at the end of 2005.

SureWest has a FTTH service in Elk Grove, a suburb of Sacramento where it competes with ATT for telephone services and Comcast for TV services. The number of homes passed by its fiber service increased to 98,900 at the end of 2006 compared to 88,764 at the end of 2005. The penetration of its FTTH service was at 23.5 percent at the end of 2006 compared to 22.3 percent at the end of 2005.

The details of SureWest's 2006 results can be found at

Click on the Metrics link to get the subscriber counts cited in this post.

SureWest is a bellwether for U.S. carriers. Its success against Comcast is probably more interesting from an IPTV perspective than its success against ATT. It shows that ATT and Verizon can achieve a 25 market penetration of their IPTV services. They will both be quite happy if they match SureWest's success. Verizon is well on its way but ATT has not gotten out of the blocks yet.

Free Grows to 1.7 M IPTV Subs in France

Free reported that it had 2.278 million broadband subscribers up from 1.595 million at the end of 2005. It expects to have 2.8 million broadband subscribers by the end of 2007. It stated that it is the number two broadband supplier in France with 19 percent market share compared to the number 1 company Orange's (France Telecom) 49 percent share and the number 2 company Neuf Cegetel at 18 percent. Telecom Italia's Alice service has 6 percent of the market and Deutsche Telekom's Club Internet has 5 percent of the market. the remaining competitors have 2 percent of the French market.

Free also stated that over 75 percent of its broadband subscribers are able to receive TV services. This means that it has 1.7 M subscribers that are able to access IPTV services as part of their broadband subscriptions. It had 2.2 million video on demand views during 2006 with 311 thousand in the month of December.

Free will start offering FTTH services using active Ethernet technology in 2007. It expects to pass 4 million homes with its fiber service by 2012. It expects that it will cost about 1,500 euros of capex to convert and existing ADSL customer to fiber and about 400 euros for new subscribers. It expects to spend 150 million euros to pass 150 thousand homes in 2007. It is forecasting that it will have 30 thousand FTTH subscribers by the end of this year.

Free also claims to have the lowest broadband customer acquisition cost in France at 50 euros each. Orange is at 78 euros per month. The customer acquisition cost for Neuf Cegetel, Telecom Italia, and Club Internet range between 247 euros and 419 euros per month.

Free's compelling offer has set the standard in France. At 29.99 euros per month it provides an Internet service at 28 Mbps, free VoIP calling in France and 49 international locations, 250 TV channels (including HD) and 3,000 video on demand titles.

The details of Free's 2006 results can be found at

Free is a difficult to assess. It did not announce how many paying IPTV subscribers that it had at the end of 2006, but based on previous announcements they should have around 500 thousand paying IPTV subscribers now. The 1.7 million IPTV capable subscribers are those people that have the service available to them. It is not clear now many of these people watch the service. I expect that more than one million of them watch the service at least once a month.

Free is an important company to watch to understand the French IPTV and broadband markets. Its fiber initiative will keep them in a leadership position in this market.

Tuesday, March 13, 2007

Swisscom has 30,000 IPTV Orders

Swisscom had 3o thousand IPTV orders in February, four months after the service was introduced. Swisscom's BluewinTV service offers 100 broadcast channels and 500 on demand videos. BluewinTV is available to 75 percent of the population in Switzerland. Swisscom stated that it has not advertised the service extensively and believes that there are indications that it prevents churn.

Swisscom has had a good reception to its IPTV service. It will be interesting to see how it integrates its BluewinTV with Fastweb's TV service. I will not be surprised to see Swisscom replace its Microsoft software with FastWeb's home grown software.

Monday, March 12, 2007

Swisscom Chasing fast Web

Swisscom plans a tender an all cash offer of 47 euros per share for 100 percent of the shares of FastWeb, the IPTV pioneer and leading competitive carrier in Italy. The total cost to Swisscom will be 3.7 billion euros. Silvio Scaglia, the founder and leading stockholder in FastWeb has accepted Swisscom's proposal. This Swisscom deail will allow Scaglia to fully liquidate his investment in FastWeb, something he has wanted to do for more than a year now. FastWeb's board of directors will consider Swisscom's offer today.

Swisscom stated that it intends to make long term investments in FastWeb based on a new generation of network and innovative offerings in Italy. Swisscom stated that the acquisition would strengthen it in three ways:
  • FastWeb has a lead of 3 to 5 years in new technologies that will strengthen Swisscom's infrastructure.
  • FastWeb has a competitive edge in multimedia applications including IPTV.
  • FastWeb will boosst Swisscom's cash flows significantly since it is a high growth company with increasing cash flows over time.
This acquisition solves a strategic problem for FastWeb. Silvio Scaglia has wanted to bail for more than a year and forced the payment of a 300 million euro one time dividend to liquidate a part of his investment in FastWeb. It also gives Swisscom a very strong entry into the Italian market and access to the latest technologies. It will be a good deal for both companies as long as Swisscom can maintain FastWeb's business and technical expertise.

Sunday, March 11, 2007

FastWeb Merger Pending?

FastWeb has suspended trading on its shares Monday, March 12. It held a board meeting on Friday, March 9 to consider its strategic options.

FastWeb has been looking for an opportunity to merge for over a year now. Tomorrow we may find out what is going to happen.

Friday, March 9, 2007

ATT Franchise Fight Turns Ugly

ATT and the city of Naperville in Illinois have reached an impasse in their IPTV franchise negotiations. (Naperville is a suburb outside of Chicago that is also home to the Bell Labs location that did a lot of development on Lucent's central office switches.)

ATT is insisting on the right to choose where it will deploy its U-verse IPTV service. Naperviille calls this "cherry picking" and wants the service to be made available to the entire community. ATT is trying to bypass Naperville and get the state of Illinois to pass a statewide franchise bill as Texas, California, and 11 other states have done.

ATT's strategy has been to provide its IPTV service in high income areas in order to have a profitable introduction. This is understandable as is Naperville's desire to have the service universally available.

The recent FCC decision does not seem to address this. This is an example of why ATT was trying to get video licensing bumped up to the Federal level. While that would certainly simplify things for ATT, it does not seem to be in the cards. ATT is just going to have to slog it out one town at a time.

Microsoft is Pushing Back

Microsoft has been citing market research and a favorable rating at Deutsche Telekom's Club Internet broadband IPTV service in France. The Microsoft market research found that people what whole home DVR, video on demand, and an easier program guide.

Microsoft also responded to the statements by AT&T executives that problems with the Microsoft software is holding its IPTV deployment back. Microsoft stated that the AT&T deployment is very complex with 450 channels, with more HD, and with more TVs per household.

The proof is in the pudding. We will become a believer when the numbers start rolling in. Subscriber counts seem to be increasing at Club Internet in France, Deutsche Telekcom in Germany, and Swisscom in Switzerland. We are waiting to see the numbers start to move up at AT&T. (In particular I am waiting for AT&T to offer me the service here in San Francisco.)

Tuesday, March 6, 2007

FCC Rules on Video Franchising

The U.S. FCC found that the current operation of the local video franchising process in many jurisdictions impedes cable competition and accelerated broadband deployment. Local video franchising has been raised as an issue by AT&T and Verizon in their efforts to deploy IPTV networks. These companies have to acquire a video franchise from each local government that they plan to serve. This requires thousand of separate agreements, which is an expensive and time consuming process.

The FCC addressed drawn-out local negotiations with no time limits, unreasonable build-out requirements, unreasonable requests for “in-kind” payments that attempt to subvert the five percent cap on franchise fees, and unreasonable demands with respect to public, educational and government access (or “PEG”).

The full text of this ruling can be found at

It is interesting that the FCC did not fundamentally change this local video regulatory system. It made adjustments that reduce the flexibility available to the local authorities. This all seems quite reasonable. The only real issue that we have is that it reduces the ability of the local authorities to get certain benefits such as providing service to schools and libraries that can provide significant public good.

What this ruling did not do is move this regulatory authority to the states or to the Federal government. A number of states such as Texas and California have already moved this authority to the state level.

While this will help AT&T and Verizon, it still forces them to slog through the video franchise process one local authority at a time. Verizon had accepted this requirement and has been working through it. AT&T has been fighting against it and will have to comply.

Minerva Moves Forward

Minerva reports that it added 45 new U.S. small telco customers in the past 12 months, which increased its customer base by more than 80 percent. 20 of these customers switched from other middleware systems.

Minerva has emerged as a very important supplier of middleware software to the small U.S. telcos. Minerva picked up the slack as Myrio turned its attention to larger global opportunities after its acquisition by Siemens. Kasenna also supplies middleware software to this market.

Brix and Hwacom Add Quality Agent

Hwacom has integrated Brix Networks' IPTV Quality Agent into its HC-100 set-top box, which gives service providers the ability to collect video performance information, metrics, and provides at-home visibility into IPTV services. This quality agent can be used for operational, troubleshooting and customer care applications.

This is one of the first examples of what should be an important trend. The service provider needs visibility into the quality of an IPTV service as experienced by the viewer. This has to be done in the set-top box. This will enable the service provider to monitor the home network as well as the broadband network.

Monday, March 5, 2007

Nortel Getting Serious About IPTV

Nortel announced an IPTV partnerships today with NDS that provides access to the NDS MediaHighway middleware. It also announced that it will offer its own set-top box using a unit manufactured by the LG-Nortel joint venture.

Neither of these appear to be strategic relationships. Nortel has already partnered with Minerva with its niddleware software and Amino for set-top boxes. Nortel has not declared that it is abandoning either of these relationships.

Deutsche Telekom IPTV Subscribers

I just heard from a reliable source that Deutsche Telekom had 25,000 IPTV subscribers at the end of 2006. About 15,000 of these were served off of Siemens VDSL systems and 10,000 were served off of ECI VDSL Systems.

This means that Deutsche Telekom made good progress with its IPTV service in the fourth quarter of 2006. This is a running rate going into 2007 that will put its objective of 100 to 200 thousand IPTV subscribers by the end of the year within reach.

This is also good news for Microsoft. If DT maintains this rate, it will be the poster child for the Microsoft IPTV Edition Software.

Friday, March 2, 2007

Liberty Global Cable Going Digital in Europe

Liberty Global plans to aggressively rollout digital services throughout Europe to stave off the TelcoTV offerings there. It plans to launch or expand digital video services in the Netherlands, Ireland, Austria, Hungary, and Poland during 2007. Its digital penetration is only 19 percent today. This is twice as high as it was at the end of 2005.

This posting was based on a LightReading article that can be found at

The lack of digital services makes European cable subscribers quite vulnerable to TelcoTV offers with their significantly higher image quality. The low rate of digital penetration makes even European countries with strong cable penetration highly vulnerable to TelcoTV offerings because the digital TelcoTV services will be clearly seen as a superior offering.

PCCW Introduces Photo Service

PCCW the incumbent telco in Hong Kong has added a digital photo service to its highly successful now TV IPTV service. This service is called snaap! and delivers photos and video clips to TVs, to PCs, and to mobile phones.

This service makes 100 MB of storage available free of charge. Customers can subscriber to an upgraded version of the snaap! service that provides 5 GB of storage and 20 free photo prints per month for $5 U.S.

PCCW continues to lead the IPTV market with new services. We expect that this kind of home media service will be imitated by other IPTV providers globally.

Belgacom Adds 100 Thousand IPTV Subscribers

Belgacom announced that it had 139,665 IPTV subscribers at the end of 2006, which is an increase of 100 thousand subscriber over the end 2005. It achieved its original target of 100 thousand IPTV subscribers for 2006 by the end of the third quarter. Belgacom stated that it added nearly 34 thousand IPTV subscribers in the fourth quarter.

Belgacom's IPTV monthly ARPU increased from 11.9 euros per month at the beginning of 2006 to 12.6 euros per month at the end of the year due to increasing use of video on demand services. It expects to add IPTV subscribers in 2007 at the same pace as 2006 and expects its monthly IPTV ARPU to grow to 15 euros.

Belgacom's IPTV business generated revenue of 15 million euros in 2006 with costs of 53 million euros. This gives an EBITDA loss for its IPTV business of 38 million euros.

Belgacom deployed ADSL-2+in 2006 in additon to VDSL and now is able to provide TV service 79.5 percent of the population of Belgium by the end of 2006.

You can get Belgacom's full fourth quarter 2006 release at

Belgacom is doing very well with its IPTV deployment in a very competitive market. It is winning its customers away from the cable companies by introducing digital services before the cable companies and leading the market in terms of services such as video on demand.

Belgacom is a good example of how IPTV should be deployed, especially in Europe. There is no reason why its success cannot be replicated across the continent.

Thursday, March 1, 2007

Deutsche Telekom's Aggressive Plans

In its 2006 results presentation, Deutsche Telekom put strong emphasis on its IPTV plans. At the end of 2006 it had introduced IPTV service in 10 cities using VDSL technology. In 2007, it plans to offer IPTV using ADSL-2+ in 750 cities and to extend its VDSL coverage to 50 cities by the end of 2008. It expects to offer IPTV to 17 million homes by the end of 2007, which will increase its market coverage from 16 percent today to 44 percent. It plans to start a market push for its ADSL-2+ IPTV service in the second half of 2007.

Its IPTV offering will include access to digital terrestrial DVB-T channels, to 150 broadcast channels, to the all important Bundesliga football matches, and to 1,200 movies on demand. It will also provide HDTV services and interactive TV services in 2007.

Deutsche Telekom expects to have between 100 and 200 thousand IPTV subscribers by the end of 2007 and 1.5 million subscribers in 2010.

You can find the presentation at

Deutsche Telekom has laid out an aggressive program. Our primary concern is if the Microsoft software is robust enough to support it. The AT&T Microsoft deployment has certainly not proved the Microsoft us put to the task as yet. Deutsche Telekom and AT&T are the two service providers to watch to measure Microsoft's ability to support large IPTV deployments.

Telefonica's Imagenio Ends 2006 With A Bang

Telefonica of Spain's Imagenio had a strong finish in the fourth quarter of 2006. It grew from 206.6 thousand subscribers at the end of 2005 to 383.0 thousand subscribers at the end of 2006. Its quarterly growth figures slowed in the middle of the year, but came back at the end of the year. Even so, it added fewer subscribers than the fourth quarter of 2005:

  • Q1 2005 22.1 thousand subscribers added 22.1 thousand total subscribers
  • Q2 2005 35.4 thousand subscribers added 57.5 thousand total subscribers
  • Q3 2005 34.6 thousand subscribers added 92.1 thousand total subscribers
  • Q4 2005 114.5 thousand subscribers added 206.6 thousand total subscribers
  • Q1 2006 43.7 thousand subscribers added 250.3 thousand total subscribers
  • Q2 2006 17.2 thousand subscribers added 267.5 thousand total subscribers
  • Q3 2006 36.9 thousand subscribers added 304.4 thousand total subscribers
  • Q4 2006 78.6 thousand subscribers added 383.0 thousand total subscribers
Telefonica pointed out that it now has 10 percent of the pay TV subscribers in Span and that 40 percent of its 2006 growth came in the fourth quarter.

Telefonica has made a strong commitment to Pay TV. In addition to its Imagenio IPTV service in Spain, it is currently working on bringing IPTV to its Latin American subsidiaries. It also operates cable and satellite TV systems in Latin America. Its total pay TV subscriber base grew to 1.064 million subscribers at the end of 2006 from 683.2 thousand at the end of 2005.

You can find Telefonica's fourth quarter presentation at

Telefonica has an aggressive IPTV program. It is the number three IPTV provider in Europe after Free and France Telecom. We expect that the growth of its IPTV subscribers will continue strong in 2007. We also expect to see it introduce IPTV services in Latin America in 2007, starting in Brazil.