France Telecom Adds 211K IPTV Subscribers

France Telecom added 211,000 IPTV subscribers across all of its operations in Europe giving it a total of 1.748 million at the end of the quarter. Its increases by operation are:

• Orange in France added 144,000 IPTV and satellite subscribers giving it a total of 1.533 million.
• France Telecom added 3,000 IPTV subscribers in Poland, giving it a total of 57,000.
• The company lost 6,000 subscribers in Spain, giving it a total of 86,000.

France added 70,000 subscribers to the satellite service that it introduced in July 2008 in addition to the numbers above.

In France, the company passed and additional 153,648 subscribers with its fiber network and added 2,689 subscribers in 3Q08. This gave the company 498,161 homes passed and 16,975 subscribers at the end of the quarter.

France Telecom is continuing to add subscribers at a steady rate in France. The rate of growth is declining in Poland and France Telecom lost customers in Spain during the quarter.

Chungwa Telecom Adds 82K IPTV Subscribers in 3Q08

Chunghwa Telecom of Taiwan added 82,000 IPTV subscribers to its MOD service in 3Q08 ending the quarter with 591,000 subscribers. A previous report stated that the company now has 603,000 IPTV subscribers and has reduced its target for 2008 from 800,000 to 700,000.

Chungwa also added 51,000 FTTB subscribers in 3Q08 ending the quarter with 833,000. It expects that the number of its fiber subscribers will exceed the number of ADSL subscribers by 2011.

Chunghwa continues to grow at a steady rate. Its goal of 700,000 IPTV subscribers by the end of 2008 is within its reach.

Telia Sonera Adds 23K IPTV Subscribers

Telia Sonera added 23,000 IPTV subscribers across all of its operations in 3Q08, giving it a total of 450 thousand at the end of the quarter. The country by country results were:

• Sweden added no new subscribers in 3Q08 and maintained its total of 320,000 IPTV subscribers.
• Norway added 2,000 subscribers ending 3Q08 with 10,000 IPTV subscribers.
• Denmark started an IPTV service and added its first 1,000 subscribers.
• Lithuania added 13,000 subscribers ending 3Q08 with 48,000 IPTV subscribers.
• Estonia added 7,000 IPTV subscribers ending the quarter with 71,000.

Telia Sonera continues slow growth with no growth in Sweden. This consistent with the fact that it added 26,000 broadband subscribers during 3Q08 across all of its operations.

Verizon Adds 233K IPTV Subscribers in 3Q08

The growth of Verizon's FiOS TV IPTV service resumed its historic rates adding 233,000 in 3Q08 giving the company a total of 1.615 million subscribers. Verizon increased the number of homes that could order FiOS TV by 1.2 million, giving a total of 8.2 million by the end of the quarter. Its FiOS TV sales penetration is at 19.7 percent. Verizon said that it had effective promotions during the quarter.

The number of new FiOS broadband subscribers increased to 225,000 in 3Q08 giving a total of 2.199 million. Its total number of broadband subscribers increased by 129,000 to 8.459 million at the end of 3Q08. The FiOS sales penetration is at 24.2 percent of the 9.1 million homes that it can serve. Its over all FiOS ARPU is $130.

Verizon's FiOS is on a strong growth curve. I expect that this growth will slow down in 4Q08 due to the current financial crisis.

Cox Cable to Offer Wireless Bundle in 2009

Cox announced that add a wireless component to its bundled offering that includes TV, high speed Internet, and telephone services today. Cox will utilize Sprint's wireless network to enter the market in 2009. At the same time, Cox is building its own 3G wireless network for additional market launches in 2009. Cox will also test 4G technology utilizing LTE. Cox acquired 700 MHz spectrum in about 10 areas in the U.S., including Los Angeles, Phoenix/Tucson, Las Vegas, New Orleans, and Atlanta.

Cox partnering with Sprint is no surprise since it is one of the partners in the Clearwire deal. However, its strategy is not clear. It seems to be creating an offering with a large set of incompatible technologies. It will be interesting to see how Cox weaves all of this together in a way that makes sense to its cable customers. There is no compatibility between CDMA, WiMAX, and 3G. It does not seem likely to me that they will find any handsets that can support all of these serves.

T-Com Croation has 100K IPTV Subscribers

T-Com’s MAXtv IPTV service in Croatia now has over 100 000 subscribers after two years of operation, an increase in the number of 40 percent in 3Q08.” MAXtv offers 100 Croatian and foreign television channels, digital video library containing over 2,000 film titles, a network PVR service that can be managed from the Internet and SMS. It also provides HD programming.

T-Com has created a successful IPTV service in Croatia. It looks like Eastern Europe can become a major IPTV market.

Telecom 2020 Blog

We have just stared a blog called Telecom 2020 View that discusses what services and networks will be in place after IP and Ethernet technologies have been adopted. This blog is a follow on to our report Telecom 2020: Transformation Strategies that covers this section in detail.

This new blog will include analysis of recent relevant news articles and a weekly column that will give our opinion on an important issue. We encourage comments so that the blog will include a diverse set of opinions.

TelecomView Publishes Report on Telecom 2020

TelecomView has released its report Telecom 2020: Transformation Strategies. This report dicusses the services and networks that will be available in 2020 after the adoption of IP and Ethernet technologies is complete. It discusses the impact on wireless and wireline networks as well as both consumer and business market segments.

This new report finds that this transformation will have major effects on the carriers and on the industry itself. It provides strategies that carriers and systems companies can use to be successful over this transition period.

You can get information on this report at our website. You can also order a free white paper that is based on this report.

Comcast Rolling Out DOCSIS 3.0

A Light Reading article states Comcast is introducing DOCSIS 3.0 cable modem services in the greater Boston area, in New Jersey, as well as in Minneapolis-St. Paul, where it was originally introduced. This service will be available in three packages:

• Extreme 50 at 50 Mbps downstream for $139.95 per month


• Ultra tier at 22 Mbps downstream for $62.95 per month
  
• Deluxe 50 tier at 50 Mbps downstream targeted to business customers runs $189.95 per month and includes static IP addresses

Comcast said it plans to roll out Docsis 3.0 to more than 10 markets and nearly 10 million homes and businesses in the next several months -- equal to about 20 percent of its U.S. cable footprint. It expects to support Docsis 3.0 on all of its systems by mid-2010

Comcast said that Docsis 3.0 will enable it to offer speeds in excess of 160 Mbps further but hasnot specified when it would launch services with speeds higher than 50 Mbps.

Comcast is now using Docsis 3.0 to compete against Verizon's FiOS fiber service, which is where it is at a competitive disadvantage. These 50 Mbps services should help, but Comcast's pricing is high. You can get 20 Mbps downstream on FiOS for $57.99 and 50 Mbps downstream for $144.95. If I had the choice, I would choose fiber; however existing customers may find Comcast's pricing close enough to keep them from changing to Verizon.

Motorola Offers Management for Set-top Boxes

Motorola launched remote device management for its IPTV set-top boxes using its NBBS device management system. NBBS enables operators to remotely access, configure, monitor and troubleshoot a portfolio of consumer devices, home networks and services. These include gateways, modems, webcams and Motorola's VIP set-top boxes.

The NBBS platform supports multiple protocols such as TR-069, telnet and HTTP management interfaces for integration into service providers’ existing networks, including provisioning, billing and customer support across multi-vendor CPE. NBBS is also compatible with WiMAX and femtocell CPE.

Remote management and configuration is a major issue in IPTV services. It can significantly reduce the cost of customers service and can become a major competitive advantage.

Internet TV Appliances

NetFlix and Tivo provide ability to access over the top Internet TV using video appliances.

The Samsung BD-P2550 and BD-P2500 Blu-ray DVD players now provide access to streamed content from NetFlix. NetFlix offers more than 12,000 movies and TV episodes as part of this service. These two devices are available for $400 and an upgrade is available for current owners.

Jaman has opened up its library of mostly independent, foreign, and documentary films for rent on TiVo DVRs. Jaman will provide indie titles such as The Girl with a Pearl Earring, as well as Bollywood and anime films, with pricing starting at $1.99 per title.

CinemaNow will offer TiVo users new and classic films from Walt Disney, including downloads of titles such as Dumbo and Pirates of the Caribbean: Dead Man's Chest. Pricing starts at $2.99 per rental.

The new content from Jaman and CinemaNow will be available on Series 2, Series 3, and TiVo HD DVRs.

Tivo also has a deal for digitally downloadable content from Amazon.com Amazon Unbox service and with YouTube that would make user-generated content available through its Series 3 or TiVo HD DVRs.

Support for over the top Internet TV in consumer video appliances provides a real threat to the Telco IPTV and cable TV services. The Telco IPTV providers and the other Pay TV providers need to incorporate this type of content into their services to maintain its dominance of the TV market in the U.S.

Chunghwa Backing Off Microsoft Mediaroom

It has been reported that Chunghwa Telecom of Taiwan plans to shift more than 3,000 users currently trialing Microsoft Mediatoom to the Alcatel-Lucent-developed OMP. Chunghwa originally planned to switch its user base to MSTV in place of OMP but has not yet committed to the decision. Currently there are more than 80 channels available on CHTs OMP system but fewer than 40 channels through Microsoft's Mediaroom.

It has also been reported that Chunghwa has has further reduced the target number of its IPTV subscribers for the end of 2008 from 800,000 to 700,000. In July, Chunghwa lowered the target number from one million to 800,000. The company currently claims about 603,000 subscribers.

It is not clear what backing off of the Microsoft Mediaroom trial means. It could be that this is part of a long term transition plan or it could mean that Chunghwa is backing away from Mediaroom. Time will tell.

Orca Adds Social Networking to Content Search

Orca is adding social networking to its COMPASS content search system. COMPASS combines five search techniques:

• Most popular content
• User ratings
• Viewer profiles, including declared preferences and viewer watching patterns.
• Collaborative filters, e.g., "people who watched this also watched XYZ".
• Promotions by the IPTV service provider

Orca sees COMPASS as an alternative to the electronic program guide as a way to find content on an IPTV service. It believes that it is a much better choice than a two dimensional guide organized by time and by channel where there are a large number of channels and a large number of video on demand assets available. Orca believes that it will be the only usable way to access Internet content as it is included into IPTV services.

Orca is including COMPASS as part of its RIGHTv IPTV middleware software system. It is also offering COMPASS to service providers using other middleware software and to cable providers as a plug in module.

Orca is taking an interesting approach. I agree with them that search has to be the way that people access large amounts of content. I also like the fact that ORCA is offering COMPASS as a module that can be integrated with other software systems. I think that this will create a large market for ORCA.

ATT Adds 232K IPTV Subscribers in 3Q08

ATT added 232,000 U-verse IPTV subscribers in 3Q08, ending with 781,000 subscribers. Its U-verse service now passes 14 million homes. There were reports that 100,000 of these IPTV subscribers are in Houston, where U-verse was introduced in November 2006.

ATT’s roll out of Total Home DVR service is under way and expected to be completed by the end of the year. Attach rates for broadband service continue to be high, at more than 85 percent. In October, ATT announced agreements with Circuit City and Wal-Mart to sell U-verse TV and U-verse High Speed Internet in more than 600 retail locations.

ATT is well on its way to meet its goal of 1 million U-verse IPTV subscribers by the end of 2008. Only the sad state of the U.S. economy might keep ATT from reaching its goal.

KPN at 30K IPTV Subscribers

KPN said that it had more than 30,000 IPTV subscribers at the end of 3Q08. It said that it built this base without advertising or promotion.

KPN had a total of 700,000 TV customers at the end of 3Q08, an increase of 64,000 during the quarter. The majority of these customers use DVB-T. KPN has increased the coverage area of its DVB-T service by 550,000 subscribers in since the end of 2Q08.

KPN has very strong cable competition and is in a battle for each household. It is using its DVB-T service to gain a video presence in cable homes serving TV sets not connected to the cable service.

KDDI Adds 51K FTTH Subscribers in 3Q08

KDDI added 51,000 FTTH subscribers in 3Q08 giving it a total of 967,000. It is maintaining its goal of 1.14 million FTTH subscribers by the end of its fiscal year in March 2009. Its FTTH ARPU increased to $47, up slightly from 2Q08.

KDDI has not disclosed its count of IPTV subscribers. It will have to set up the pace in Q3 and Q4 from Q2 to achieve its goal for Fiscal 2009.

Harmonic Ad Splicer Passes Microsoft Testing

The Harmonic ProStream™ 2000 digital video splicer has successfully completed conformance testing for real-time splicing of national MPEG-4 AVC (H.264) video streams of the Microsoft Mediaroom IPTV system. The test for the ProStream 2000 platform was administered by Microsoft as part of the Microsoft Mediaroom Interoperability and Qualification Lab (IQ Lab) program.

The Harmonic splicer can be used to replace national ads and can be used to provide different ads to specific zones or to support unique ads to a limited number of demographic groups.

The Harmonic splicer supports the advertising strategy that Microsoft announced at IBC. Microsoft’s strategy also includes more highly targeted ads that are different using other techniques, including through the set-top box.

ATIS Releases Initialization and Discovery Standard

ATIS released a standard created by the ATIS IPTV Interoperability Forum (IIF): Network Attachment and Initialization of Devices and Client Discovery of IPTV Services (ATIS-0800017). This document specifies the initial set of activities that prepare devices in the consumer domain to receive and consume IPTV services. It is a foundation specification addressing fundamentals such as the initialization and attachment phases for the Delivery (home) Network Gateway (DNG) and the IPTV Terminal Function (ITF), which includes the set top box. Comprehensively, it covers network attachment, service provider discovery, service provider attachment and services discovery procedures.

Through addressing basic issues such as how an IPTV terminal connects to the network, helping the system know which service providers are available there and the services they offer, as well as allowing connection to these providers and offerings, ATIS-0800017 is the beginning of a suite of standards that will enable interoperability starting with a simplified user experience for IPTV service attachment. Soon to follow will be a specification enabling access to linear television services—television as we know it today—through a managed IP network.

This appears to be a sound piece of foundation work. It will be interesting to see how it finds its way into established IPTV systems.

China Telecom Advertising Agreement with UTStarcom

Best Tone Information Service Corporation Ltd., a wholly-owned subsidiary of China Telecom Corporation Ltd., with the intent to deploy a video information distribution network in the Hunan province of China. This is the second large-scale interactive advertising system that UTStarcom’s RollingStream® IPTV platform will support in China.
Best Tone is working with UTStarcom to build and operate a Chinese-specific, building-based video system, with 3,500 iPAD1000 terminals scheduled to go live in office buildings, government facilities, supermarkets, hotels, hospitals and schools in the Hunan Province this year. The network, intended to stream commercial advertisements throughout Hunan Province, is expected to support a total of 10,000 terminals in the region upon completion of the project. The iPAD1000 is a complete advertising system that is akin to a kiosk.

This is an interesting application of IPTV technology to mass advertising. I expect that this approach should be adopted on a broad basis globally.

ATIS Validates IPTV "CableCard"

ATIS'x IP-Based Separable Security Incubator (ISSI) has proven the viability of an access card broadly compatible with set-top boxes and televisions that enables IPTV providers to ensure the security of high-value content. The VueKey™ is an enhancement of the CableCard® standard to enable IP flows that are network-technology-agnostic. ATIS stated that the time and cost for adaptation will be minimal for vendors creating the components that will deliver IPTV because the card utilizes the existing CableCard design,

Recently held interoperability testing conducted by ISSI members CCAD, Cisco, and Motorola found the VueKey™ solution is a viable approach to meet separable security directives set by the FCC in Docket 97-80. It accomplishes separable security and is harmonized with, and backwards compatible to, the existing unidirectional CableCard standard.

There were important details that were not discussed. It is important that the VueKey be a two-way approach. The original one-way CableCard failed in the market because it did not support important functions such as the interactive program guide or video on demand.

Assuming that ATIS has done this right, this will be a big step toward embedding IPTV set-top boxes into consumer products such as TVs or DVRs.

IPTV Subscribers Increasing in China

The number of IPTV users in Jiangsu Province China increase to more than 200,000 by the end of September 2008, compared to 35,000 at the end of 2007. This is an increase of 471 percent in the first nine months of 2008, the sharpest rise in IPTV use in the country.

Jiangsu Province started offering IPTV services to residents in the second half of 2006. China Telecom's local branch operates the service, in collaboration with content providers Shanghai Media Group, the state-run Xinhua news agency, and ZTE.

Shanghai now has more than 600,000 IPTV users as of the end of September, up approximately 150 percent from the end of 2007. At the end of 2007, Hangzhou City had the most IPTV subscribers of any IPTV subscription region with 250,000, while Shanghai Municipality had 240,000 users and Henan Province ranked third with 200,000 users. Jiangsu Province ranked just ninth at the time with 35,000 users, far fewer than the top five regions. The pace of growth has slackened in some regions where IPTV once developed rapidly, such as Heilongjiang Province and Henan Province.

China is on its way to becoming the leading IPTV country as it has done with broadband. However, its IPTV success is still concentrated in only a few provinces. Its ultimate success depends on expanding this success to all provinces.

Jungo Fast Channel Change

Jungo has jumped into the fast channel change arena with a home gateway-based solution. Jungo's approach reduces channel switching overheads by employing using an enhancement of the regular IGMP Leave and Fast- Leave operations - otherwise known as 'Aggressive Leave' and the monitoring of available resources such as bandwidth and virtual circuits.

Jungo's software will identify when the viewer is channel zapping, that is quickly sending a sequence of channel up or down selections. In this case the channel changes can stack up because they come more quickly that the channel changes can be accomplished. In this case the Jungo software will skip to the last channel selected and skip the others in the stack.

For example, if the viewer is watching channel 43 and quickly presses the channel up button, a channel change to channel 44 will initiate. By the time channel 44 appears on the TV, four more channel change requests will have been received for channels 45, 46, 47, and 48. The Jungo software will discard the channel change requests to channels 45, 46, and 47 and jump to channel 48.

This illustrates how complex fast channel change is. The Microsoft and the Alcatel-Lucent approaches minimize the channel change time when the user selects a new channel from the electronic profile guide, say switching from channel 43 directly to channel 65. I don't think their approaches address the sequential channel change issue that Jungo is addressing. Maybe a fully optimized fast channel change will have to be implemented an multiple places in the network.

BT Working Toward 2010 VDSL Rollout

BT has announced that it will operate two VDSL trials of about 15,000 customers each starting in the summer of 2009. It plans to provide up to 40 Mbps as part of this service. BT expects to announce plans for the initial market VDSL deployment in early 2010.

It looks like BT is taking a very orderly process that will lead to a commercial VDSL roll out starting some time in 2010. BT will be experiencing serious bandwidth pressures from the demand for HD content well before this. I would not be surprised to see it accelerate this schedule due to significant competitive pressure.

Verizon FiOS to Support Internet TV

A Light Reading article said that Verizon will add You Tube and Straz Play on demand service to its FiOS TV IPTV service. Content from both of these services will be selected from delivered to the TV.

This is the start of a trend that we predicted in our report The Battle for Broadband TV: TelcoTV vs. Internet TV. Our conclusion was that Telco IPTV providers should embrace Internet video and Internet TV to compete more effectively against cable and satellite services.

France Establishes Fiber Rules

ARCEP, the French electronic communication regulatory authority, has defined the main points necessary to guarantee an extensive, open and competitive fiber rollout:

• the deployment of additional fibers at the request of another operator and financed by the latter;
• the location of the shared access point on public land;
• the presence of a single operator for a building, providing all services from the shared access point to subscribers' plugs.

The competitive broadband carrier, Free, supports this approach and is calling for all operators come together and formalise an agreement to bring optic fiber to French households as quickly as possible.

France is leading the way in Europe to define a new regulatory regime for fiber that includes each operator laying its own fiber using shared ducts. It will be interesting to see if this approach spreads to Asia or North America.

Qwest Killing IPTV Trial

Qwest is cancelling its Choice TV VDSL-based IPTV service that was deployed first back in 1999 on a trial basis in Arizona, and Colorado. Qwest has started phasing out its Choice TV service for 42,000 video customers in Arizona and is attempting to persuade those customers to subscribe to a satellite TV/broadband package instead.

Qwest's Choice TV service was based on Next Level VDSL technology that was later acquired by Motorola in 2003. Motorola stopped actively marketing the Next Level technology a couple of years later.

Qwest proved that a large carrier could do well with IPTV well before AT&T and Verizon got into the game. Its Next Level technology is obsolete and does not support MPEG-4 or HD. It was time to upgrade it or drop it.

Qwest has shown no further interest in IPTV and is now starting to deploy VDSL to provide a high speed data service that can be used for over the top video.