UTStarcom Making Strides in India

I recently had an interview with UTStarcom about its recent announcement that Bharti Airtel has selected it for its IPTV service. I have a lot to learn about the Indian market, so they patiently gave me a lot of background information. I will repeat the major points here on the assumption that I am not the only one who needs to learn the basics.

There are two state run companies BSNL and MTNL that are the incumbent operators in India. MTNL is the smaller of the two companies and serves the two largest metro areas centered on Delhi and Mumbai. BSNL is much larger than MTNL and serves the rest of India, including the rural areas. India is densely populated even in rural areas, especially when compared to the U.S.

There are also three large privately held c0mpetitive telcos in India:

• Bharti is the largest of these competitors and is headquartered in Delhi, but serves the entire country.
• Reliance is headquartered in Mumbai and serves the entire country.
• Tata is headquartered in Mumbai and serves the southern part of India.

Bharti Airtel selected UTStarcom's RollingStream system for the IPTV service that it is developing. UTStarcom has been in trial with Bharti for the last 2 1/2 years. Bharti plans to start its IPTV service in 8 cities in the Delhi area. It has committed to 120 thousand IPTV subscribers to start and than expects to grow to 450 thousand subscribers. Its IPTV service will have more than 100 broadcast channels along with on demand content.

Bharti expects to offer IPTV in other regions after it is established in the Delhi region. It would like to have the service widely deployed across its in network in time for the Commonwealth games in 2010.

MTNL has also selected UTStarcom for its IPTV service. MTNL also expects to launch its IPTV service in the Delhi area.

These deployments in India should keep UTStarcom in the leading position in the IPTV market in Asia and to be one of the leaders globally. In fact, UTStarcom is now competiting with Motorola, Microsoft, and Alcatel for global leadership in IPTV market.

Cisco Introduces IPTV SLA

Cisco has introduced an IPTV SLA that is explained at this link. It provides monitoring of the IPTV broadcast flows through the IP network and delivers quality measurements, channel mapping, and route path analysis. It couples the multicast protocol with the video channel lineups in a monitoring system. It provides problem isolation by offering a common platform for network and video operators.

Cisco's IPTV SLA includes:

• IPTV Multicast Flow Tracing, which isolates IPTV multicast flows to the network segments responsible for transmission.
• IPTV Video-Quality Measurements for loss and latency that will result in video artifacts. This video measurement is correlated with the multicast IPTV flow tracing for problem correlation.
• IPTV Channel Mapping, which reports the channels that are carried in a multicast flow through the network in order to determine the impact of anomalies in the IPTV transport network.
• Health Checks based on rules created on a per flow basis. Violations to this rule set, such as path or pps, will result in notification to the network operator.
• IPTV-Related Multicast Flows, which automatically finds related multicast flows carrying similar video content to help operators isolate problems and determine their impact.
• Integrated Router Statistics provide multicast diagnostics is provided on a per-flow basis, including router and switch statistics.
• Northbound Notification, which integrates with the service provider's service manager applications by providing northbound trap notifications of IPTV flow alerts.

It appears that Cisco is providing some important capabilities for monitoring IPTV traffic. From this description, it is focusing on the network layer. Other approaches, such as those offered by Brix, Ineoquest, and Bridge Technologies provide monitoring at the video layer by decoding the MPEG packets and identifying the visual impact directly.

I think that Cisco's IPTV SLA is a useful tool, but I also think that video layer monitoring on an end-to-end basis will also be required to get a full picture of video quality.

France Telecom Creates 3 Screen Sports Channel

France Telecom has created the Orange Sports TV channel that it will offer over its Orange TV IPTV service, over the Internet, and over its Orange mobile service. This channel covers all sports and includes news and magazine programs as well as the sports events themselves.

Orange Sports TV is offers broadcast services to the TV, the mobile phone, and to the Internet connected PC. The channel now has over 20 different broadcast programs, all of which are available to the TV and to the Internet connected PC. All but three of these programs are available over the mobile phone. There are also three channels for the mobile phone that are not available on the TV or the PC.

The Orange Sports TV service also provides interactive on demand content to the TV that include videos, news, scores, and highlight videos.

This is an important way for TelcoTV providers to differentiate their services with unique, self produced content. Sports is a huge draw globally, so it is likely that other large carriers will follow France Telecom's example.

PCCW produces its own financial channel in Hong Kong. This was the first instance of a TelcoTV provider producing its own channel.

Brasil Telecom Launches IPTV

Brasil Telecom launched its Videon IPTV service in Brasilia, the nation's capital. Brasil Telecom is the third largest fixed line carrier in that country. The Videon service is a video on demand service. The regulator in Brazil does not permit the telcos there to offer broadcast services. The company will offer the video on demand content on a pay per view basis and as a subscription on demand package that provides up to 500 hours per month.

Brasil Telecom is testing the response to this service in Brasilia and plans to expand to other large cities later.

Telefonica Brasil has been reported to be working on an IPTV service in Sao Paolo. Oi, the largest carrier in Brazil has stated that it is investing $150 million on an IPTV service in Rio de Janeiro.

Brazil is becoming an active IPTV market. It will be held back, though, until the regulators permit the telecom companies to offer broadcast services.

Hong Kong Broadband Promoting Fiber

Hong Kong Broadband is using its fiber to the home network to take a swipe at PCCW, the incumbent in Hong Kong. Hong Kong Broadband is a service of City Telecom in Hong Kong. Its new add states:

"How fast is broadband connectivity though old phone lines" To download a 90-minute DVD movie, for instance, old phone line connectivity takes about 113 MINUTES (1hr 53min); Fibre-to-the-Home broadband takes only 41 SECONDS to do just the same! Obviously, old phone line broadband is no match for Fibre-to-the-Home."

I think it is clear that there is significant market appeal in fiber services. Hong Kong Broadband has done well so far against a very strong incumbent, PCCW. Verizon's FiOS is showing that fiber has strong appeal in the U.S. as well.

Brix Provides 10Gbps Monitoring

Brix has introduced the ability to monitor IPTV and VoIP on 10 Gbps Ethernet links. The new Brix 4100 provides real time monitoring of live customer IPTV traffic of video service quality across transport, and signaling systems, which is designed to allow operations and customer care issues to be proactively addressed.

Monitoring and system assurance are key issues in IPTV networks. The TelcoTV operators need to be able to monitor their services on a customer by customer basis to provide high quality of service.

Motorola Facilitating MPEG-4

I went to a small Motorola briefing on Friday with three other analysts to hear a presentation on systems that Motorola has just announced that facilitate the delivery of content from the broadcasters to cable, satellite, and TelcoTV service providers.

This is a real advantages to the TelcoTV service providers that deliver their content using MPEG-4. It eliminates the need to transcode from MPEG-2 to MPEG-4 that exists for these service providers today. Motorola has introduced the DSR-4410MD that takes the MPEG-4 content from the satellite, decrypts it, and then passes it on so that it can be transmitted to the subscribers in the same MPEG-4 format.

The satellite companies have already started the move toward MPEG-4 in order to increase their capacity for HD channels. This has enabled the satellite companies to offer more HD channels than their cable competitors. The satellite companies can basically take the same approach as the TelcoTV service providers.

It turns out that there are substantial advantages for the cable companies as well. The industry is moving to a new modulation scheme called DVB-S2 that increases the bandwidth of a satellite channel from 40 Mbps to 77 Mbps. The current 40 Mbps satellite channel with MPEG-2 compression supports 10 SD TV channels. The new 77 Mbps satellite channel with MPEG-4 compression supports 9 HD TV channels, which permits the cable companies to switch from SD to HD with nearly the same TV channel capacity.

Motorola just announced the DSR-6000 transcoders that will take the MPEG-4 SD or HD from the satellite and transcode it to MPEG-2. It is capable of producing both MPEG-2 SD and HD streams from an MPEG-4 HD stream off of the satellite. This eliminates the need to transmit both SD and HD versions of the same TV channel across the satellite. The cost of these systems is about the same as those that the cable companies are buying today.

Motorola gave us a demonstration with half the screen being displayed with MPEG-2 HD content and the other half with HD content transcoded from MPEG-4. I could not see any difference between the two sides of the screens nor could I find any evidence of a discontinuity at the dividing line between the two halves of the screen.

This appears to be an important development that will facilitate the transformation of TV to HD. It also simplifies the delivery of TelcoTV services.

ATT U-verse Installations Speeding Up

ATT has improved the installation time for its U-verse IPTV service from 7.5 to 6.5 man hours in the last month. Its best region has the time down to 5.8 man hours and its best technician is doing it in 4 hours.

ATT is currently doing between 7,000 and 8,000 installations per week and has said that it expects to be doing 10,000 per week by the end of the year. The company recently announced that it had 100 thousand U-verse subscribers.

This installation time is critical and is actually the most significant single item in the IPTV business case. Getting this number is key to both the growth and profitability of the service.

Arris to Acquire C-Cor

Arris will acquire C-Cor for a price of approximately $730 million. Arris offers cable modem and cable telephony systems. C-Cor is a leading video on demand system provider to cable and TelcoTV service providers. The merger is anticipated to close in January 2008.

This looks like a strong combination. C-Cor's video on demand business is additive to Arris. Our recent report Opportunities in TelcoTV identifies that C-Cor is likely to be the number two IPTV video systems company over the period from 2006 to 2012.

Alcatel-Lucent Buys Tamblin for Interactive Advertising

Alcatel-Lucent has acquired Tamblin to strengthen its capability to provided interactive IPTV advertising. Tamblin is a UK company with 13 people that offers a software system called i-ZoneTV that allows TV service providers and broadcasters to build interactive advertising applications and audience response capabilities into their services. Its system is currently being used by the BBC, BskyB, and ITV in the UK. The company has also integrated its software into Microsoft's Mediaroom TelcoTV software package.

Alcatel-Lucent has been quite serious about the personalization of ITPV services and advertising for a long time. It has been working on its on personalization and audience measurements strategies. It looks like this acquisition is a real coup given Tamblin's key role in the very active UK interactive TV market.

New Report: Opportunities in TelcoTV

TelecomView has just released a new report Opportunities in TelcoTV: Forecast & Market Shares - 2006 to 2012 that identifies the opportunities that are still available in the TelcoTV market. It does this with a forecast through 2012 for TelcoTV for subscribers, service revenue, access systems, video on demand systems, middleware, content protection systems, and set-top boxes.

The report also ranks systems companies based on revenues for 2006 and for the entire period from 2006 through 2012. Thus, this analysis gives market positions today and projects this into future market position. It shows how the growth of newly emerging deployments are likely to change market positions.

The report then goes on to define the remaining opportunity for access systems, video on demand systems, middleware, content protection systems, and set-top boxes based on the current state of more than 50 major TelcoTV service deployments.

The following links will provide more information:

• Press release
• Brochure and Table of Contents
• Free whitepaper

Send me an email if you would like more information or dicsuss the results of this study. I think it provides a unique view of how this market is likely to shake out.

Microsoft Interoperability Lab Tour

Microsoft gave me a tour of its Mediaroom interoperability lab. The tour started with a demonstration of ATT's U-verse service that is based on Mediaroom. It looks very good and is quite fast. It uses picture in picture (PIP) in the EPG to show what is showing on the highlighted channel. The EPG itself is transparent so you can still see the channel that you are currently watching. It also uses the scroll up and down keys to give a description of the next channel up or down along with a PIP of what is playing on the screen. This approach shows only that single channel and does not obscure the currently playing program to the same degree.

The software also has a search feature that finds content that contain the specified word or part of word. It searches broadcast content and on demand content. Microsoft said that it would also present content that has been recorded on the set-top box's hard disk.

Mediaroom looks nice. I will certainly order U-verse as soon as ATT makes it available to me.

They then took me to their laboratory headend. It is a large system with analog, cable, and IPTV equipment. It is fed from an impressive set of satellite antennas located just behind the building. Microsoft uses this headend to provide live feeds as well as pre-recorded feeds to its engineering labs.

This is a large, well organized facility. It gives Microsoft a lot of flexibility in the content that it uses to develop and test its systems.

We then went to the interoperability lab. In this lab an encoder vendor can bring its systems and, together with Microsoft, test interoperability with Mediaroom. The purpose of this activity is to increase the number encoders that Microsoft can support with Mediaroom.

Microsoft provides the encoder company with an interface specification that describes the encoding schemes, speeds, and transport protocols that it supports. It starts the testing by testing basic functions and moves to full interoperability testing when the encoder appears to be basically sound.

This specification also defines common enhancements such as PIP, where the encoders are taking on functions that Microsoft originally implemented on its servers. Moving PIP to the encoders is significant because it removes a large load from the servers that have caused scaling problems.

Microsoft uses analyzers and server logs to identify interoperability issues during the testing. It finds in the end that visual inspection is the best judge. Visual artifacts and poor lip synching are readily apparent.

It has found that this testing process will determine interoperation. It does find occasionally, though, that particularly demanding content can cause the encoder to operate out of an acceptable range. It has the ability to capture these situations in the field and use them in future testing.

Microsoft stated that is has similar efforts underway that focus on set-top boxes and back office OSS systems.

This is a sound approach. Mediaroom is a complex system that needs to be well tested to be robust in the field.

Hong Kong Broadband Restructures Services

Hong Kong Broadband, the fiber to MDU provider in Hong Kong, is restructuring its fiber to the home (FTTH) service. Its new services are offered at 100 Mbps, 200 Mbps, and 1 Gbps at US$48.50/month, US$88.20/month, and US$215,40/month respectively.

It will also make its 25 Mbps service its entry point offering and discontinue its 10 Mbps offering. Hong Kong Broadband uses point-to-point Ethernet technology.

Hong Kong Broadband focuses on the mass, Chinese speaking market in Hong Kong. It has been successful so far and this new offering should be attractive to broadband users looking for higher speeds.

Quative IPTV SDP Interview

Deutsche Telekom is starting a pilot Dual Play TV service that will provide interactive TV, digital terrestrial broadcast TV, and on demand TV delivered over the Internet. This pilot will use an ADB hybrid set-top box and the Quative IPTV Service Delivery Platform (SDP). The following link will take you to German language website for this pilot service.

I spoke with Sebastian Kramer, Quative's CEO. He was formerly head of Alcatel's OMP IPTV middleware project, so he has extensive experience in the IPTV industry. Quative is a subsidiary of the Kudelski group, which also owns IPTV and digital TV content security, Nagravision.

Sebastian said that the Deutsche Telekom Dual Play TV service is separate from the company's T-Home IPTV service that is based on Microsoft's software platform. The Quative SDP was used to build a middleware system that integrates the Internet delivered on demand content with the over the air digital terrestrial service. He said that it offers a superior electronic program guide that includes both services.

He believes that Quative's SDP approach will facilitate B-to-B partnerships that will permit companies to reach consumers through their TVs. He cited an example where BMW might be able to address the 10 percent of the market that is likely to buy its products. BMW would be able to offer videos that feature is autos as well as interactive features such as configurators for each of its models.

Sebastian settled on an SDP approach to middleware because he found at Alcatel that most sales turned what was supposed to be a standard product into a project. Service providers wanted a level of competition that required a significant amount of unique development. He concluded from this experience that an SDP architecture that provides the building blocks that the service provider can use to build a custom middleware system would allow Quative to offer a standard product that service providers can use to create the IPTV system that they really want.

He expects that Quative's SDP will be applied in a variety of hybrid scenarios that include digital terrestrial and IPTV, satellite and IPTV, as well as even cable and IPTV. He also expects that Quative's systems will be used by pure TelcoTV services.

Sebastian and Quative have a smart strategy. They have learned from long experience as an IPTV subscriber. It is likely that they will be successful with Tier 2 and Tier 3 carriers along with hybrid applications. These emerging hybrid services are likely to become Quative's most interesting market.

Comcast to Expand Data Offerings

Comcast, the large U.S. cable provider, is planning to offer a sub 1 Mbps data service as well as a higher speed DOCSIS 3.0 service at speeds in excess of 200 Mbps. The company's current service offers a maximum bandwidth of 8 Mbps or 16 Mbps.

Comcast plans to trial these services before the end of 2007 and to start rolling them out commercially in 2008.

The U.S. cable companies have been losing ground against the telco broadband services. Assuming Comcast prices these new services competitively, these two new services should help it reverse that trend. The telco ADSL service have been priced below the cable modem services. An entry level cable service at a low price (say $10/month) should prove attractive to many users. On the other hand a high speed service at 100 or 200 Mbps should help Comcast against the FiOS FTTP service. The U.S. cable companies will clearly do what they need to to remain competitive with their telco competitors.

UTStarcom Lands Bharti Airtel

UTStarcom announced a contract to supply its RollingStream end-to-end IPTV solution to Bharti Airtel, one of India's leading integrated telecommunications service providers with more than 46 million customers.

This is a significant entry into the Indian market for UTStarcom. With its strong presence in China, UTStarcom is becoming one of the major ITPV system suppliers.

ATT Hits 5 Million IPTV Homes Passed

ATT in the U.S. has now passed 5 million with its VDSL-based U-verse IPTV service. This is an increase from 2.2 million as of the end of 2006. The company plans to add another 3 million homes passed by the end of 2007 to reach its goal of 8 million homes passed.

ATT is within reach of its goal. Clearly it has to accelerate its rate a bit to do that, but there is no reason that it should not be able to do that.

(Of course, there is no sign of an Alcatel cabinet near my house :-(

Motorola Shipped 2 Million IPTV Set-top Boxes

Motorola announced that it has shipped 2 million IPTV set-top boxes and has shipped 1 million in the last five months. The 2 millionth unit was shipped as part of an order for 150 thousand set-top boxes to Telia Sonera in Sweden.

Motorola is the leading IPTV set-top box company based on its own products as well as the products that it acquired with Kreatel in 2006.

India Regulator Issues TelcoTV Position Paper

The Telecom Regulatory Authority of India has issued a Position Paper on the Provisioning of IPTV Services. This paper describes how regulations in India should be adjusted to accommodate the recent introduction of TelcoTV services in India. It states that:

• Both telecom service providers having license to provide triple play services under and cable TV operators can provide IPTV service without requiring any further license or registration.
• The content will be regulated under Up-linking/Down-linking guidelines issued by Ministry of Information and Broadcasting.
• There should be no bar on Broadcasters or content providers to provide their content to IPTV service providers also.
• Any breach of the provisions by telecom service providers. cable operators, or Broadcaster shall be dealt with by designated agencies.

It appears that the regulator in India is not creating barriers to the deployment of TelcoTV services in India. It is working to rationalize its regulation to accommodate the introduction of these services.

ATT Has 100.000 IPTV Subscribers

ATT announced that it had installed its 100 thousandth U-verse IPTV subscriber. This up 49 thousand subscribers from the 51 thousand that it had at the end of June 2007.

To celebrate this milestone, AT&T will provide the Pierson family of Los Angeles T a Tatung 42-inch LCD HDTV, Toshiba HD DVD player, Hewlett-Packard notebook personal computer, Blackberry Curve, a portable DVD player courtesy of Showtime Networks, an AT&T cordless phone and a prize pack that features HBO Sports apparel and original series DVDs, a Discovery Channel Planet Earth HD DVD box set, a NBC Universal movie gift pack, as well as DVDs from Showtime Networks, Lionsgate and Starz Entertainment. The family will also receive 12 months of the AT&T U-verse TV U400 package and AT&T Yahoo! High Speed Internet Pro at no charge.

The company is continuing to hold to its prediction that it will be adding 10 thousand new subscribers per week by the end of 2007.

Wow, at the rate they are going, maybe I have a shot at the 1 million subscriber prize!

Seriously, its average over the last 9 weeks has been to add 1,100 new subscribers per week. This is up from adding about 600 new subscribers per week in 2Q07. This is still a l0ng way from 10,000 per week. ATT has about 16 or 17 more weeks to get to that level. That will be a good trick if they do it.

Korea Telecom Launches IPTV Service

Korea Telecom has expanded its Mega TV IPTV service nationally across Korea. Up to now it has been available only in Seoul and nearby cities. It is now available to Korea Telecom's 5.5 million broadband users.

Korea Telecom expects to attract 300,000 subscribers by the end of 2007 and to increase the number to one million in 2008.

The Mega TV service will offer video-on-demand programming services along with interactive TV services, including an electronic program guide. Programs include movies, sports, culture, animation, documentaries, drama and educational content. Research conducted during the Mega TV pilot phase indicates that 84 percent of target customers would like to acquire the service.

The situation in Korea is confusing. The last I heard, regulatory issues had put Korea Telecom's Mega TV plans on hold. It appeared a month ago that these regulatory issues would not be resolved until next year. I will make another post when I get more information.

Free's to Introduce FTTH this Month

Free stated that it will introduce its FTTH service in Paris this month (September 2007). It stated that the regulatory environment in France has helped by providing access to France Telecom and cable company ducts and to provide for deployment sharing.


Free has also structured the financial approach to its FTTH deployment to improve its economics through 12 year leasing arrangements for real estate. It has also signed turnkey contracts for areas outside of Paris where payment is made at delivery.


Free has committed to a point-to-point Ethernet architecture rather than PON because:

• It provides a full gigabit of bandwidth available to each home.
• It is a better fit to a competitive carrier without a legacy network
• CapEx is required only when installing a new paying subscriber rather than to provide the ability for people to subscribe
• It fits an unbundled environment where unbundling creates security issues with a PON infrastructure

Free expects for its FTTH service to pass 163 thousand homes in Paris by the end of 2007 in the following arrondissements:

• 19th 28,000 homes passed
• 20th 28,000 homes passed
• 15th 61,000 homes passed
• 5th 24,500 homes passed
• 1st 22,000 homes passed

It plans to start deploying in three more areas by December 2007, which will add another 78 thousand homes passed. It also has management agreements to connect over 70 thousand MDUs to this network. Free expects to add another 260 thousand homes passed outside of Paris by 2009 and 2010.


Free has committed 100 million euros to this project. It has confirmed that it deploy in Paris for 1,500 euros per existing subscriber. It expects that the revenues gained from converting these existing subscribers will cover the cost of this FTTH deployment.


The post in this blog from last week titled "Free will support two HDTV's on Fiber" explains what Free will offer to its fiber customer for 29.99 euros per month.

Free will also offer wholesale access to its fiber plant. It will support both point-to-point Ethernet and GPON architectures and the features of this wholesale service will be released by the French regulator, ARCEP. Free will charge a wholesale price of 15 euros per month per access for this wholesale service.

Free has an aggressive plan, but then it has established itself on similarly aggressive plans. It looks like this strategy will mean that it will set the pace in France for fiber broadband as it has set the pace for ADSL broadband.

The one thing I do not understand is the economics. 100 million euros does not seem like enough. It seems that 100 million euros for 330 thousand homes in Paris means about 300 euros per home passed. Even assuming economies for Ethernet vs. PON, it does not seem to be enough.

Free has 2M TelcoTV Subscribers

Free announced that it had 2.06 million unbundled broadband subscribers at the end of 1H07, which means that it has about 2 million TelcoTV subscribers. Its total broadband base grew by 128 thousand to 2.63 million in 2Q07. This compares to an increase of 220 thousand in 1Q07. Free attributes this decline in net adds in 2H07 due to a general decline in adds across all service provider. However, while France Telecom also experienced a somewhat smaller rate of decline, the other competitive broadband carriers saw some increase.

Free's percentage of unbundled lines grew to 78.4 percent at the end on 1H07 compared to 75.9 percent at the end of 2006. Its average customer spending grew from 34.5 euros at the end of 2006 to 35.0 euros at the end of 1H07.

Free's objective is to have 4 million broadband subscribers by 2010 with 85 percent unbundled.

Free's basic broadband service at 29.99 euros per month includes 144 broadcast channels. It offers another 113 premium channels for additional fees. Free also offers video on demand content for .99 euros per view as well as a subscription video on demand service for 5.99 euros per month that provides unlimited access to 50 films and 100 TV series episodes, which are renewed each week.

Free is continuing to do well. It did experience more of a decline in growth than its competitors in 2H07; however it is likely that it will bounce back.

Tiscali UK to go National

Tiscali UK plans to extend its IPTV service nationally. Its broadband service should be available to 10 million homes in the UK by the end of 2007. The service includes:

• Over 60 TV & radio channels
• Over 350 on demand programs
• On demand access to over 1,000 movies
• Free 7 day BBC, C4 and FX NPVR catch up service
• Phone line rental included
• Set-top box and free wireless router included
• £30 ($60) setup fee

This services will offer two broadband/TV packages:

• Up to 2 Mbps for £19.99 ($40) per month with all UK and international weekend calls
• Up to 8 Mbps for £24.99 ($50) per month with all UK and international anytime calls

Also available for an extra £22 ($44) per month will also get you the Sky Sports channels.

Tiscali UK is attempting to significantly improve its position in the UK broadband market. This should help. The broadcast content differentiates it from the BT Vision. Its package is similar to the successful broadband packages available in France.