Monday, April 30, 2007

Verizon FiOS TV up 68% in Quarter

Verizon's FiOS TV added 141 thousand IPTV subscribers in the first quarter reaching a total of 348 thousand. It had 207 thousand IPTV subscribers at the end of 2006. Its FiOS TV penetration reached 11 percent, up from 9 percent at the end of 2006.

Verizon is adding nearly 2,200 FiOS TV subscribers to day, which is more than five times the 2,000 U-verse IPTV subscribers that ATT is adding per week. Verizon also added 78 thousand DirecTV satellite TV subscribers bringing its total satellite customers to 618 thousand.

Verizon added 177 thousand FiOS Internet subscribers and 416 thousand total broadband subscribers during the quarter. Verizon stated that nearly 60 percent of FiOS TV orders include Internet services. FiOS now accounts for 16 percent of Verizon's broadband customers.

Verizon's FiOS success story is continuing. This demonstrates the soundness of its fiber strategy. Take a look at the ATT posts in this blog from last week and the week before that showed that its IPTV subscribers grew from 3,000 to 15,000 during the first quarter. ATT's total was 18,000 in the middle of March.

ATT made much of its smarter FTTN strategy that required less investment than Verizon's FTTP approach. So far, it has not worked out that way.

Chunghwa IPTV Growth Continues

Chunghwa Telecom reached 285,111 IPTV subscribers at the end of March 2007, up 36,111 subscribers from the end of 2006. In the same quarter it added 20 thousand new ADS subscribers and 58 thousand new FTTB subscribers.

IPTV is continuing strong growth. Its 1Q07 was just a bit below the 37.5 thousand subscribers average per quarter that it achieved in 2006.

Telefonica buys into Telecom Italia

A consortium led by Telefonica is poised to spend 5.15B euros for a 23.6 percent stake in Telecom Italia. The consortium will buy Olimpia, the holding company that owns 15 percent of Telecom Italia. The members of the consortium already own 5.6 percent of Telecom Italia.

This is a bit outside of what I usually include in the blog, but I wanted to mention that this could affect Microsoft's prospects. Telecom Italia is using Alcatel-Lucent's OMP IPTV middleware but is still evaluating Microsoft's IPTV Edition middleware in its labs.

Alcatel-Lucent also the MiView TV IPTV middleware which was originally developed by Telefonica. I expect that Telefonica will encourage Telecom Italia to adopt this middleware software.

Friday, April 27, 2007

Verizon Courting MDUs

Verizon held a conference in New York City yesterday to encourage apartment building owners to bring its FiOS FTTP broadband service to their buildings. Verizon pointed to studies that indicate that a building that supports FiOS can increase 1 percent in value. Verizon expects to have most of these buildings wired for FiOS over the next three years.

Extending into MDUs can be a tough nut to crack. It can be difficult to get enough people in a building to commit to buy the new service to justify the expense of providing it. KDDI found this to be a problem in Japan. Verizon's approach of pointing out how the value of the building increases is an interesting twist, but this is likely to continue to be a tough sell.

Thursday, April 26, 2007

Sun Defines New Approach to IPTV Networking

Sun introduced its Sun Streaming System, a video delivery system that supports both on demand and broadcast content. This system was designed to enable service providers to offer a highly personalized set of services based on delivering all traffic using unicast techniques.

IPTV broadcast channels are typically delivered using mulicast which allows viewers to share the same set of packets, thus significantly reducing network loading for this broadcast content. Of course, there is not personalization with these broadcast services since all viewers are seeing exactly the same thing.

The introduction of video on demand followed by NPVR and advanced advertising will push more and more IPTV traffic into unicast. Sun's system addresses this increased network loading by pushing the IPTV connections down to the optical layer.

The Sun Streaming System consists of the following elements:
  • Supervisor nodes
  • Controller nodes
  • Session controller nodes
  • Content acquisition nodes
  • Media storage
  • Ethernet switch

The Ethernet switch included in the Sun system is connected to a set of optical links that terminate in the video serving office with the access systems and DSLAMs that terminate the subscriber broadband connections. This approach bypasses a Layer 2 Ethernet network or Layer 3 IP network to transport video traffic to the edge.

You can get more information about the Sun Streaming System at

I have been quite concerned about how IP or Ethernet transport networks would be able to cope with the increasing loads of video traffic as IPTV services become more popular. It looks like the optical approach that Sun is offering is the right way to go.

TelecomView will release a report next week that compare IP, Ethernet, and optical approaches to IPTV networking. It will conclude that an optical will be best in the long run as the amount of unicast traffic on the network increases.

France Telecom's Will Pass 1M IPTV Subs in 2007

France Telecom ended its 1Q07 at the end of March with 745 thousand IPTV subscribers in France, up 168 thousand or 29 percent over the quarter. If this rate it will double its IPTV subscriber base during 2007 and up with well over 1 million IPTV subscribers. It had 862 thuosand video on demand views during the quarter up from 517 thousand during 4Q06.

France Telecom's IPTV service in Poland now has 9 thousand subscribers. Its total number of IPTV subscribers across all of its operations is 768 thousand, up from 229 thousand in the previous 12 months. In addition to France and Poland, France Telecom has IPTV operations in the UK, Spain, and in some of the French overseas territories.

France Telecom continues to do well. Between France Telecom, Free, and Neuf Cegetel there will be well over 3 million IPTV subscriber in France by the end of the year.

Tuesday, April 24, 2007

ATT Q1 Report

ATT reported that it had 13 thousand U-verse IPTV subscribers at the end of March. This was a increase of 10 thousand in the first quarter of 2007. Given its announcement of 18 thousand U-verse customers on April 18, the increase of 5 thousand subscribers since the beginning of April is consistent with its statement that it is currently adding 2 thousand subscribers a week.

ATT stated that it had 1.7 million ATT Dish Network satellite subscribers at the end of March, and increase of 1.1 million subscribers in the previous 12 months. Surprisingly, its Homezone hybrid satellite/broadband service had only 6 thousand subscribers.

ATT's performance on its ATT Dish Network bodes well for U-verse. It shows that ATT's bundling strategies can be quite effective in attracting TV viewers.

Motorola to acquire Terayon

Motorola will acquire advanced advertising system company Terayon for $140 million.

This is the latest of a series of acquisitions that Motorola is making to improve its position in both the cable and TelcoTV markets. Advanced advertising is an important emerging area that will become increasingly important.

Neuf Cegetel Acqure #2 Position in France?

Neuf Cegetel is in exclusive discussions to acquire Deutsche Telekom's French broadband subsidiary Club Internet. At the end of 2006 Neuf Cegetel had 2.172 million broadband subscribers, 106 thousand subscribers in back of Free. Club Internet's 570 ADSL subscribers would push Neuf Cegetel ahead Free into the number to position in France.

There were reports that Iliad/Free was also bidding for Club Internet but dropped out as the price went up.

Neuf Cegetel has used merger and acquisition as its primary strategy for catching and passing Free. The first step was the merger of Neuf and Cegetel two years ago. Last year it acquired AOL's customer base in France.

This acquisition will mean that Microsoft will lose one of its leading deployments. Neuf Cegetel has a well honed, competitive IPTV offering and is unlikely to switch to Microsoft.

KDDI FTTH Takes Big Jump

KDDI Japan's FTTH business took a big jump in the first quarter of 2006 with its acquisition of power company Tepco's fixed line and FTTH business. KDDI finished its FY 2006 in March 2006 167 thousand FTTH subscribers. It had 216 thousand FTTH subscribers at the end of December 2006.

The number of FTTH subscribers jumped to 592 thousand at the end of its 2007 fiscal year in March. It estimates that it will have 900 thousand FTTH subscribers by the end of March 2008. Its objective is to capture 30 percent of the FTTH subscribers in the Tokyo metropolitan area. It plans to expand its FTTH business to other areas of Japan based on its success in Tokyo. Its strategy is to use FTTH and other broadband business to turn around its wireline business.

KDDI has not disclosed its number of IPTV subscribers. Based on discussions with KDDI, I estimate that the number of KDDI's IPTV subscribers grew from 45 thousand in March 2006 to 65 thousand in March 2007.

As far as I know, Tepco was not offering IPTV services. I expect that KDDI will expand its IPTV service to its full FTTH subscriber base, which should cause a big jump in IPTV subscribers this year.

Friday, April 20, 2007

Kasenna Tested at 1 Million Subscribers

HP and Intel ran IPTV scaling tests using Kasenna's LivingRoom middleware and Kasenna's PortalTV video on demand systems. These test showed that this software set can support 1 million subscribers using 9 servers. Five of the servers were used to support the middleware, 3 servers to support video on demand, and one server to support the backend database.

This simulation was run at HPs IPTV lab in Grenoble, France. It assumes that 60 percent of the set-top boxes were active and 40 percent inactive. The 60 percent active set-top boxes break down into:
  • 18% watching or channel surfing broadcast TVs (180 thousand)
  • 34% watching VOD and NPVR services (350 thousand)
  • 1% browsing video on demand content (10 thousand)
  • 4% browsing the electronic program guide (40 thousand)
  • 3% viewing other applications (30 thousand)

Kasenna and HP are planning to release a white paper that gives the details of this test next week. You can download a summary of this test and register for the white paper at:

Kasenna promised to give me an early release of the white paper along with an interview with one of their technical people who worked on this project. I will post a summary after that.

This result is impressive. Kasenna uses a thin client approach, so it is quite dependent on the servers. Earlier middleware systems such as Nokia Siemens Myrio is set-top box based and puts a much lighter load on the network. Two years ago Myrio told me that their software could support 1 million subscribers with 4 servers. The primary function of these servers is to download software into the set-top boxes.

At that same time, Microsoft told me that their software would require 600 servers to support 1 million subscribers.

Set-top Box Directory

There is a listing of IPTV set-top box manufacturers at

This list looks to be quite complete.

Thursday, April 19, 2007

ATT's IPTV Picking Up Steam

ATT announced yesterday that it has 18,000 U-verse IPTV subscribers. This is an increase of 15,000 since the beginning of the year. It is now adding 2,000 U-verse subscribers per week, which is five times the rate in January.

This is good news from ATT. It sounds as if its IPTV marketing rollout has started in earnest. If it can maintain or improve on this rate and continue to expand its service foot print, it will be in a good position to make a significant dent in the U.S. pay TV market.

Wednesday, April 18, 2007

Comcast Video Interface

Comcast has introduced an interface for selecting broadcast and on demand content using video thumbnails that show the content. It is using this interface at selected locations in the Midwest and the South. It plans to bring this video interface to Philadelphia by the end of this year.

This is another counter move against the TelcoTV services, especially the Microsoft IPTV Edition software. This sounds like a good move on Comcast's part but is being deployed over a significant period of time. This will give both ATT and Verizon time to respond in most of their territories.

Docsis 3.0 Coming Sooner

CableLabs has created a plan that will make Docsis 3.0 cable modems available in the second quarter of 2008 rather than late 2008 or 2009. Apparently, CableLabs is doing this as a result from the cable companies to accelerate Docsis 3.0 deployment as a response to Verizon's FiOS FTTP deployment and ATT's Project Lightspeed VDSL deployment.

The telcos have been signing up more broadband subscribers than the cable modem services. Docsis 3.0 will be a powerful tool for reversing this trend and putting the cable modem service back in the lead in North America. This is a significant threat to the Telcos and especially to ATT.

Thursday, April 12, 2007

Cablevision Hits a Wall with NPVR

Cablevision, the cable provider in the New York suburbs, took an aggressive approach to Network PVR (NPVR) services that ran into strong resistance from the content industry. NPVR is a service where the service provider (Cablevision) records broadcast TV channels and provides the ability to replay specific programs at a later time.

Cablevision felt that it had the right to do this, but the networks disagreed. They sued and Cablevision lost. It is now appealing that decision.

There is an interesting summary of the current situation on LightReading at

This argument is particularly important for IPTV providers. The IPTV networks are better suited than cable networks to support NPVR and other on demand services. NPVR can give the telcos a significant advantage over the cable companies.

It has been clear for a long time that the networks had deep reservations about NPVR services. Cablevisions actions have polarized the issue and made an evolution to a full NPVR service very difficult to achieve in the U.S.

FastWeb in Italy has been successful with a slower approach. It started with a service that emulated a home based PVR in that the viewer had to declare in advance that he or she wanted to record a program. FastWeb would record that program and allow only that viewer and any other viewers that requested that the program be recorded to view it later. This was no worse that if the viewer owned a Tivo, so the broadcasters in Italy accepted it.

Last year FastWeb took the next step and deployed an NPVR service that provides access to broadcast programs from the previous three days for any viewer, whether or not he or she requested it in advance.

If Cablevision's suit is not successful, a similar step by step process will have to occur in the U.S. as well.

Wednesday, April 11, 2007

Motorola ECI Partnership

Motorola has formed a partnership with ECI that gives it the ability to offer ECI's access systems globally. The initial focus of the agreement will be on the U.S. market, but the agreement permits Motoroa to market ECI IP DSLAM access equipment globally except for countries where ECI already has strong market presence.

ECI has a strong set of IP access system products that support ADSL, ADSL-2+, and VDSL in both central office and remote locations. The ECI products complement Motorola's current set of PON FTTP systems. ECI's systems support a large portion of the broadband and IPTV subscribers at France Telecom and Deutsche Telekom. Motorola is one of two PON FTTP suppliers to Verizon's FiOS service.

Motorola has a large share of the North American IPTV access market through its acquisition of Next Level. A large portion of the Canadian telcos and the small U.S. telcos that have IPTV services use Motorola/Next Level systems. These Next Level systems are ATM based and many of these telcos are looking for a way to upgrade them to an IP DSLAM.

While Motorola's primary focus for its access systems has been North America, it has recently started marketing its access systems internationally. It has found that cable companies interested in FTTP architectures and some telcos are showing interest. Motorola already has a strong relationship with many cable companies outside of the U.S.

This partnership makes good sense for both companies. Motorola needs a way to retain its Next Level customers, otherwise they will go other vendors. ECI has never achieved much success in North America even though it has a strong product line. The two companies should do well by focusing initially on Motorola's current customer base.

Tuesday, April 10, 2007

TelcoTV vs. Internet TV

TelecomView has released its report called The Battle for Broadband TV: TelcoTV vs. Internet TV. This report discusses how Internet TV will affect TelcoTV. It identifies how the two services can cooperate with each other as well compete.

The report discusses how the two services will be positioned to serve the TVs in the home. It identifies fundamental advantages that the TelcoTV services have in doing this and gives strategies that telcos can use to strengthen their position.

You can find out more about this report at:

You can also order a free white paper on this subject at:

Let us know what you think.

J-Com Offering Docsis 3.0

J-Com, the cable company in Japan, will offer a 160 Mbps cable modem service based pre-Docsis 3.0 from Arris. This service will help it compete with the extensive FTTH services available from NTT and other Telcos in Japan.

Keep your eye on Docsis 3.0. If the U.S. cable companies broadly deploy 100 Mbps Docsis 3.0 services, the telco broadband services will be in trouble. ADSL will not be able to compete. Even VDSL will have a very tough time. Only Verizon's FiOS PON based service will be able to compete.

Qwest IPTV Stalled

Lightreading has published a good summary of Qwest's IPTV status at

Qwest was one of the first major IPTV deployments six or seven years ago with VDSL deployments in Phoenix, AZ and near Denver, CO. Other than some expansion of these systems, it has not done anything more since Nacchio left Qwest.

It looks like Qwest is still stalled. It will have to commit to VDSL or fiber to have a viable broadband IPTV offering. I don't think it is ready to do that.

HD's Strong Appeal in Europe

The BBC has published an interesting study of user reactions to HD in the UK. As you can imagine, they loved it. You can find the study at:

Both BT and FastWeb have told me that they did not think that HD would be as strong in Europe as it is in North America. They both said that the improvement from HD is not as great in Europe because their SD sets have higher resolution.

I did not buy their argument. I think this study confirms that HD will be quite strong in Europe. Service providers in Europe need to upgrade their networks to support it or it will pass them by.

Saturday, April 7, 2007


A book called IPTV Crash Course has been published. You can find a review at

I have not seen this book and cannot endorse it, but there are few books available on the subject. It may be worth a look if you are coming up to speed on the subject.

Regulatory Uncertainty Continues in Korea

The telcos in Korea will now be allowed to build IPTV services, but these services have been categorized as "broadcast services". The Korean Telecommunications Associations (KCTA) welcomed the ruling, but telecom companies said that the ruling would actually prevent them from entering the market.

You can see the source of this post at

The regulatory status of IPTV has been muddled for some time. It appears that this ruling will not help the situation. Maybe I need to go and reduce my IPTV forecast for Korea?

Wednesday, April 4, 2007

Telia Offers Free IPTV in Sweden

Telia, the incumbent telco in Sweden, now offers the basic channel package and the set-top box for its Digital-tv IPTV service for starting in February. This basic channel package includes 26 channels. Premium packages with 10 to 14 additional channels each are available for 169 kr (US$24) to 239 kr (US$34). Video on demand is also available.

We have heard that this offer has been quite successful and that Telia has been adding 10 thousand new IPTV subscribers per week since it introduced this service. This would bring its subscriber base somewhere around 150 thousand IPTV subscribers.

It is hard to turn down something that is free!

ATT Promoting IPTV

ATT is offering free HD for one year to new subscribers to its IPTV U-verse service, where it is available, as well as to its satellited DirecTV and ATT Dish TV services. AT&T offers more than 25 channels of HD programming through its ATT U-verse IPTV service and up to 31 HD channels through ATT satellite services, DirecTV Service and AT&T DISH Network.

This is ATT's first move to promote its U-verse service. This offer will have a much larger effect on its satellite services since U-verse is only available in a few places.

Monday, April 2, 2007

Virgin Media Responding to BT Vision

Virgin Media, the UK cable provider, announced that it will provide a free set-top Freeview digital terrestrial set-top box to its customers in areas where it does not provide cable service. Customers that subscribe to its 8 Mbps broadband service and Talk Anytime phone bundle at 19.99 UK pounds per month will get the set-top box for free. Customers in these non-cable areas taking only a broadband will pay 40 UK pounds for the set-top box. The company plans to offer more advanced TV services in 2008.

This is a clear response to BT Vision IPTV service. Virgin is trying to retain its broadband customers from moving to BT Vision in the face of BT's offer of a free Freeview set-top box. Virgin is also using this offer to move people to its voice/data bundle.

BT Vision will start providing a rich set of on demand services starting before spring ends. This will make it difficult for Virgin to compete until its own on demand services come up to speed. On the other hand, BT cannot afford a slow rollout. Virgin (and others) will be breathing down its neck.

Nokia Siemens Networks Starts Up

Nokia Siemens Network started operation yesterday, April 1. It is a combination of the telecommunications operations of its two owners, Nokia and Siemens. The company expects very slight market growth for both fixed and mobile infrastructure globally. Consequently it is updating its view of the outlook for these services.

This merger is likely to have a strong effect on Siemens IPTV efforts. Nokia has not had any significant participation in the IPTV market globally. It seems likely that the company will increase its focus on Tier 1 carriers globally.

Open IPTV Forum Interview

Last Friday I held an interview with the Open IPTV Forum. I spoke with Yunchao Hu of Ericsson who is acting as chairman of the Steeering Group and Barry Gravenhorst of Sony who is the vice chairman of the Steering Group of the Open IPTV Forum. They described four key objectives for the organization:
  • It will specify a common and open end to end solution for supplying a variety of TV and Internet multimedia services to consumer devices in the home network.
  • It will consider establishing a certification and logo program.
  • It will include all the key players - customer equipment, content providers, network operators, service providers, network vendors, home device vendors
  • It will strive to bring standards to the market more quickly than traditional standards organizations.
The organization plans to work in the following areas:
  • A common IPTV Terminal Function (ITF) that supports services from both an open Internet and a managed network environment.
  • Interactive and personalized services and the integration with communications services.
  • Convergence of IPTV and multimedia services across different access technologies.
  • Easy integration of 3rd party content offerings.
The Open IPTV Forum will base its work on existing technologies and standards wherever possible. It will define the necessary extensions to fill gaps and provide these extensions back to the relevant standards bodies. Candidate technologies include:
  • DLNA
  • IMS
  • Internet portals
  • Web browsers
  • Multimedia middleware
As reported earlier the founding members included ATT, France Telecom, Telecom Italia, Siemens, Ericsson, Sony, Phillips, Panasonic, and Samsung.

They identified three reasons why the Forum was formed:
  • No other standards body is covering all aspects of an end to end IPTV solution in a timely manner.
  • To address the combination of managed networks and the open Internet for service delivery.
  • To address the blending of IPTV and communications services.
Open IPTV Forum membership is open to companies that will actively contribute to the Forum's objectives. It expects to complete the detailed arrangements to support new applicants after the summer.

You can get more information at the Open IPTV Forum at

The Open IPTV Forum is attacking important problems. Today every IPTV middleware package and sometimes separate deployments of the same middleware package have different interfaces. This makes it difficult for the set-t0p box manufacturers and their silicon suppliers. These companies have to go out and develop new software for every middleware package they want to support at a minimum. This is impossible for consumer device companies. There is no way that Sony or any other manufacturer will put an IPTV set-top box into their TVs if different software has to be loaded into it for every IPTV network.

The other work items for the Forum are also good choices. Personalised and interactive services are very important differentiators for IPTV services. The Forum must address the functions required for interactive and other new forms of advertising as well.

The convergence of IPTV and IMS is another important issue. I wrote a report on this for MRG last year. Bringing telephone services to the TV is another important differentiator, one that the U.S. cable companies are working diligently on.

Integrating the open Internet with managed IPTV services is also important. We will release a new report on this subject the week after next. The Forum is planning to do it right by addressing how content will be brought from the Internet as well as how third party content providers can provide service in addition to the managed IPTV service.

ATIS in the U.S. and the ITU have similar objectives to the Open IPTV Forum. All of this work will need to be harmonized and brought to market. It may be too late. Most of the large telcos have already committed to IPTV architectures. They will have to somehow evolve to Open IPTV Forum standards over time if this work is to be meaningful. It is just not clear how this will occur.