Wednesday, November 28, 2007

ICTV Providing Interactive TV to PCCW

I went to the ribbon cutting for ICTV's new offices in downtown San Jose. It was quite a ceremony with the mayor of San Jose and two council members attending. The company moved to a downtown high rise rather than a Silicon Valley tilt up in order project an image appropriate for a media entertainment company.

ICTV gave me a demo of the kind of interactive services that its systems can provide. It showed a browser like screen on the TV that included one or more video windows along with surround texts and menus that can be selected using the remote control. It is proposing a business model in the U.S. where the programming would be built by programmers such as CNN and then delivered to cable companies as MPEG-2 streams. These cable companies would then deliver them over their video on demand infrastructure. This approach means that any digital set-top box capable of receiving video on demand services will be able to receive this interactive content.

PCCW accounts for 850 thousand of the one million viewers supported by ICTV's systems and services. PCCW uses ICTV for its TV based shopping service as well as for PCCW's successful film trailer service. A PCCW viewer can watch trailers for movies currently at the theater and then reserve seats and buy tickets for a particular showing. PCCW told me that it is selling more seats using the TV service than are being sold over the Internet.

ICTV looks like it has a good approach that will complement both cable and TelcoTV services. PCCW is showing that it is an effective way to enhance an IPTV service. From what I saw, I think that other IPTV service providers should take a look at it themselves.

Indian Regulator Proposes IPTV Rules

TRAI, the regulator in India, has issued recommendations for rules for IPTV services in India. These recommendations state that IPTV providers can offer only broadcast channels that have been approved by the Ministry of Information and Broadcasting. They also recommend a technical change that includes the IPTV providers in the companies that can receive broadcast feeds.

These recommendations also would permit cable companies and larger Internet providers to also offer IPTV services without any additional licensing.

These draft recommendations are being put on the TRAI website inviting further comments from stakeholders. After this TRAI will issue the final recommendations to the Government.

These recommendations seem straightforward. They permit IPTV services to operate and give the cable companies the right to create their own IPTV services.

In fact cable companies, particularly in Europe, are starting to deploy telco style broadband and IPTV services rather than expanding their cable networks and buying unbundled loops from the incumbent telco for these services.

I would appreciate comments from readers in India about these regulations.

City Telecom to Deploy Alcatel GPON

City Telecom in Hong will start deploying Alcatel GPON systems as part of its FTTH network starting in January 2008 to support its Hong Kong Broadband Network service. City Telecom has a firm plan to extend its fiber coverage from 1.4 million homes passed today to 2 million by 2010. This will give it 90 percent population coverage in Hong Kong.

City Telecom will use both active Ethernet and GPON in its future deployments. It has found that the cost performance of GPON has improved to the point where it is competitive with Ethernet in certain deployment scenarios, particularly in lower density applications. It has also found that GPON can overcome the 100 meter distance limitation of 100 BaseT Ethernet over Category 5 cable.

This is an interesting move. City Telecom has been using Cisco point-to-point Ethernet until now. It indicates that GPON does provide real benefits over active Ethernet in some applications but has not yet won the technology battle.

Tuesday, November 27, 2007

TeliaSonera Launches TelcoTV in Finland

TeliaSonera launched an IPTV services in the Greater Helsinki Area on November 29, 2007. Sonera Broadband TV offers broadcast channels, video on demand, and HDTV. The service is designed for households for which Sonera’s 100 Mbps FTTH broadband is available. TeliaSonera has about 170,000 cable TV customers in Finland.

In addition to free digital terrestrial channels, Sonera Broadband TV provides eight ty channels, of which Discovery Channel, Silver, Voom and Luxe are in HD. In addition to these, Animal Planet, Discovery Civilisation, Discovery Science and Discovery Travel & Living are also available. The offering is supplemented by SF Anytime, a video on demand service with a weekly updated selection of over 1,000 videos including, Finnish movies. The basic service is free of charge for the first 12 months. A premium option is available with a movie package with a monthly charge offer of 29 euros. In addition, this package also includes the Canal+ Total channel package.

This TelcoTV service is available today to 85,000 households in the Greater Helsinki Area that are covered by its FTTH network. This network provides coverage in the 15 largest towns in Finland and should cover 150 thousand homes by the end of 2007.

An IPTV offering is an important part of an FTTH service. TeliaSonera has not aggressively deployed a DSL based IPTV service since it also offers a cable TV service. FTTH is a clear upgrade from cable technology, so including a video service is an important strategy.

Virgin Abandoning IPTV Plans

Virgin Media is abandoning its planned IPTV service announced in April 2007 following the departure of CEO Steve Burch.Virgin's IPTV offering was to provide nationwide coverage for Virgin Media services for those outside the reach of its cable network, and was set to launch in 2008. The company is leaving the possibility open that it will revive this effort in 2009.

Virgin Media reported a gain of 13 thousand customers in 3Q07, following a loss of more than 70,000 customers in 2Q07.

Virgin Media has had to pull in its horns to defend its base business in the face of significant financial losses. In the long term it will face increasing competition as BT's BT Vision and other TelcoTV services in the UK build momentum.

Monday, November 26, 2007

HD Coming to UK's Freeeview

The four broadcasters that participate in the Freeview digital terrestrial service in the UK have agreed on an approach to offering HD service starting in late 2009 or early 2010. The BBC, ITV, Channel 4 and Five agreed to approach that does not require the additional spectrum that they have been looking for to support HD services until now.

This will put significant pressure on BT to upgrade its access network to VDSL or FTTH to be able to support HD services. Its current ADSL network cannot supply enough bandwidth to most customers to support HD services today. BT Vision customers will want HD video on demand services to complement the Freeview HD broadcast services.

Most of BT's broadband competitors rely on wholesale broadband loops that it provides to support their IPTV offerings. They will also be in a bind if BT does not upgrade its upgrade its network or if there are limitations on unbundling of VDSL or FTTH loops.

Friday, November 23, 2007

PCCW Introduces ! Gig FTTH Services

PCCW, the incumbent telco in Hong Kong, now offers the PCCW 1000M+ gigabit Ethernet FTTH service two two thirds of Hong Kong's households. It also offers the 100M 100 Mbps Ethernet FTTH service. It stated that it plans to offer a 1.25 Gbps service some time in 2008.

The 100M service is priced at $US75 per month and the 1000M+ service is priced at $280 per month.

PCCW is stepping up the level of broadband competition in Hong Kong. These FTTH are premium services but are well priced for technology based small and home businesses.

PCCW's new offerings now compete directly with City Telecom's Hong Kong Broadband FTTH services in Hong Kong. This will put pricing pressure on City Telecom in order to maintain an advantage in this market.

Monday, November 19, 2007

Hong Kong Broadband IPTV Flat

City Telecom added 4 thousand IPTV subscribers to its IPTV service over the last 12 months bringing its total to 120 thousand.

City Telecom's chairman stated that he foresees dramatic changes in the pay TV market in the coming year in Hong Kong. PCCW’s acquisition of the English Premier League football matches and the most popular movie’s broadcasting rights has been a major blow to Cable TV. Many of cable's long-time subscribers would consider changing to other services, one of which is PCCW's, but to pay a higher price than Cable TV, another alternative is not to subscribe any pay TV service at all. In view of this market change, City Telecom is considering an offering that is similar to Cable TV, attracting some of their subscribers to its service.

City Telecom started its IPTV service with a bang and added 100 thousand subscribers in its first year. Its growth has been slow since then. I think that part of the problem has been churn caused by its introductory offer of one year free IPTV service. But I believe that the more serious problem is that City Telecom has not yet come up with a compelling offer that is competitive with both the cable company and PCCW. It appears that the company recognizes this and is going to do something about it.

Saturday, November 17, 2007

TeliaSonera Reaches 276K IPTV Subscribers

At TeliaSonera the total number of IPTV subscriptions grew to more than 276 thousand, mainly due to the successful IPTV push in Sweden which increased the number of IPTV subscriptions there by 58,000 to 216,000 during 3Q07. During this period the total number of IPTV subscribers increased by 76 thousand across the entire country.

Since TeliaSonera included IPTV in its basic broadband service, the number of IPTV subscribers has grown in proportion to the growth in its broadband service. The increases in its broadband service are offsetting its losses in fixed voice subscriptions.

Friday, November 16, 2007

Verizon Pushing for 400 Mbps MoCA

Verizon is pushing the MoCA alliance to increase the bandwidth of the MoCA data service to 400 Mbps in the next two years. MoCA is a home networking technology that supports Ethernet over coaxial cable and coexists with cable and IPTV RF video delivery. The most recent version of MoCA provides a 270 Mbps wire speed with 175 Mbps throughput.

Verizon has more than 3 million MoCA devices installed in FiOS TV customer homes today.
Considering the telco's deployment and customer ramps, that number will only continue to rise. Verizon ended the third quarter with 717,000 FiOS TV subscribers and is adding about 3,200 new video customers per day. On the high end, the company forecasts having 4 million FiOS TV subs by 2010.

Today, Verizon delivers broadcast video via an RF overlay, similar to a cable architecture, but uses IPTV to deliver video on demand content and widget data. Eventually, Verizon plans to introduce an IP video hub office and eliminate the analog RF transmission package. The company will use IPTV to deliver video on demand, interactive capabilities, and a few broadcast channels. It will later migrate to IPTV multicast for all broadcast content and the eliminate the RF overlay.

Verizon is making a good point; however, it should be shooting for a gigabit in the home network.

IPTV Legal Status in Korea Approaching Resolution

The National Assembly of Korea is expected to pass a special law before the end of the year that will allow Internet companies to broadcast TV shows using IPTV technology.

The assembly's Broadcasting and Communications Special Committee's subcommittee on bill deliberations reached an agreement on some difficult points in the proposed law. If the IPTV bill is passed at a parliamentary plenary session, Internet service providers like KT and Hanaro Telecom will be allowed to broadcast IPTV programs in real time like terrestrial and cable broadcasters. The committee plans to pass the bill at its meeting on Tuesday before submitting it to the floor the following Friday.

This law should resolve the legal issues that have held IPTV back in Korea for years now. If it is actually resolved by the end of 2007, 2008 will be an excellent year for IPTV in Korea.

Wednesday, November 14, 2007

Broadband Slowdown Pushing IPTV

Lightreading published and article that described the slowdown of broadband adoption in the U.S. It quotes a financial analyst as saying that the days of wireline broadband connectivity as a major growth driver of U.S. telecom are largely over.

We see broadband reaching a saturation point with slowing growth rates across Western Europe, North America, and the developed countries of Asia. On the other hand, we see IPTV continuing to grow at high rates in these areas. In fact, IPTV is causing carriers to upgrade their broadband networks to VDSL and FTTH. IPTV has become the engine driving broadband spending in these countries.

Tiscali UK Expanding IPTV Service

Tiscali UK was supporting IPTV at 450 exchanges in the UK and can now offer the service to 34 percent of UK homes. While the number of IPTV subscribers has decreased to 36 thousand since the beginning of the year, the company stated that it is now added new subscribers at a rate of 250 per day. Its ARPU for IPTV customers now stands at GBP40 ($US82) per month.

Tiscali has been doing a lot of work to absorb Video Networks, which had established an IPTV service and had reached over 50 thousand subscribers. With its national expansion, it appears that Tiscali is turning this situation around and will become a significant factor in the UK pay TV market.

Tuesday, November 13, 2007

Telecom Italia to Expand IPTV in Germany

Telecom Italia’s subsidiary in Germany, HanseNet, plans to offer its Alice homeTV IPTV package in 150 cities by the end of 2007. This will provide coverage of 10 million households.

Its IPTV service will be offered in Bremen, Leipzig, Dresden, Stuttgart and the Ruhr region. This services is currently available in Hamburg, Lubeck and parts of federal state Mecklenburg-Western Pomerania. It includes approximatesly 60 free to air channels and 40 pay channels plus video-on-demand with about 1,200 titles.

IPTV is becoming a standard part of a broadband service offering in Germany as it has in France. This will certainly increase the amount of competition in this market.

Monday, November 12, 2007

O2 Ends 3Q07 with 53K IPTV Subscribers

Telefonica's Czech subsidiary O2 ended 3Q07 with 53 thousand IPTV subscribers, a net gain of 16,000 in the quarter. O2 TV recently began broadcasting live O2 Extraliga hockey matches, and expanded the number of films offered in the Videot├ęka, O2’s virtual video rental shop, through deals with Warner Brothers and Disney.This was an increase of 50 thousand subscribers in the last 12 months and 37 thousand since the beginning of the year. O2 also ended 3Q07 with 545 thousand broadband subscribers.

O2 is seeing steady growth in its IPTV service. Its penetration of its broadband based is still low, so its IPTV service should continue to see good growth.

Telefonica adds 18K IPTV Subscribers in 3Q07

Telefonica added 18,142 subscribers in 3Q07 giving it a total of 469,067 at the end of the quarter. It stated that it now has 12 percent of the pay TV market in Spain. The number of subscriber's to Telefonica's IPTV service grew by 165 thousand in the previous 12 months and by 86.1 thousand since the beginning of 2007.

Brasil Telefonica started an IPTV service in September and had 8.5 thousand subscribers by the end of the month.

Telefonica has not maintained the pace of 80 thousand new subscribers that it set in 4Q06 in 2007. Its third quarter was quite far from this mark. While there may be some seasonal factors at work, it does looks like Telefonica needs to step up the marketing for its IPTV service to build its momentum back.

FastWeb to Offer Disney Content On Demand

FastWeb in Italy will start offering Disney content on demand targeting teens, tweens and preschoolers. The Disney Channel On Demand offer will include live action series such as Hannah Montana, the sitcom Quelli dell’intervallo, animated programs such as Kim Possible and American Dragon, and Disney Channel Original Movies such as High School Musical 2 in its Dance Along version. For younger viewers, Disney Channel On Demand will offer a range of series for preschoolers, such as the newly launched Disney My Friends Tigger and Pooh, Mickey Mouse Clubhouse, and Handy Manny.

FastWeb is a real IPTV pioneer on a global basis. This is a good addition to its on demand service. Children's programming is a popular segment of an on demand service.

Friday, November 9, 2007

Telecom Italia France Has 80K IPTV Subscribers

Telecom Italia reported that its broadband subsidiary in France had more than 80 thousand IPTV subscribers at the end of 3Q07. It did not report IPTV subscriber numbers for its domestic IPTV service in Italy or in its Hansenet broadband subsidiary in Germany.

Telecom Italia is doing well with IPTV in France where IPTV is a standard and popular broadband option. I think that if the results were strong in Italy or Germany, it would have reported them.

Belgacom Added 58K Subscribers in 3Q07

Belgacom added 109,769 IPTV subscribers in the first nine months of 2007 and 58,086 in 3Q07. It stated that this increase was due to promotions that it introduced in 2Q07. It now has 249,434 subscribers. Its additions in 3Q07 were a significant improvement over the 41,857 added in 2Q07. It added less than 10 thousand new subscribers in 1Q07 largely due to churn caused by a "try & buy" program.

Belgacom received 29M euros revenue in the first 9 months of 2007 compared to 10M euros for the first 9 months of 2006. The ARPU for its TV service increased to 15.8 euros in 3Q07 compared to 11.6 12 months earlier.

Belgacom has gotten itself back on track. It is doing well picking up subscribers in a very competitive market with strong cable competition.

Thursday, November 8, 2007

BT Triples IPTV Subscribers in 3Q07

BT added 40 thousand subscribers to its BT Vision IPTV service giving it a total of 60 thousand subscribers. It stated that its football and other sports offerings made a strong contribution to this contribution. It has recently launched a self install option for BT Vision.

BT had a good quarter. I expect that its success will continue because its support for Freeview digital terrestrial TV for broadcast service makes it an easy option to choose for the half of the UK market that does not have cable or satellite service.

Wednesday, November 7, 2007

Swisscom struggling to add 20K IPTV Subscribers

Swisscom added again added 20 thousand new subscribers in 3Q07 giving it a total of 60 thousand subscriptions installed and on order. While its Bluewin TV IPTV subscribers are satisfied with the service's content, features, and usability, there is significant dissatisfaction due to technical issues.

Swisscom stated that it has already made major improvements that have resulted in:
  • Cut the relative call volume in half over the last six months.
  • Reduced order fulfillment time by one third
Swisscom has put its priority on achieving stability, which has kept the costs of the service high. It plans to improve the stability and quality of its IPTV system including connectivity, encoders, and its IPTV software system. It plans to install new encoders that will improve audio and video quality in 1Q08.

Swisscomm expects to reduce the costs to install its Bluewin TV service to about $650 per subscriber over the next year through a self install program that will include:
  • Line prequalification and self install
  • A lower price for a self install
  • A cheaper set-top box
  • Reduction of call volumes and efficiency improvements
It will be tough for Swiscom to achieve its goal of 100 thousand IPTV subscribers by the end of the year. It would have to double its rate and sign up 40 thousand more subscribers during the fourth quarter.

I wondered if Swisscom would tap into FastWeb's IPTV expertise at the time of the acquisition. It appears that Swisscom could really use the help to stabilize its service.

ATT Shaving IPTV FTTN Estimate

In its 3Q07 SEC filing, ATT stated that its goal for the number of homes passed by its VDSL FTTN network by the end of 2008 has been lowered a bit to 17 million, which is 1 million less than its previous estimate.

The company also stated that as the end of 3Q07 that its FTTN network passed 5.5 million homes and that it was marketing the U-verse service to about 40 percent of them.

ATT has to triple its VDSL FTTN deployment over the next fifteen months to make this objective. This will be difficult to accomplish. I certainly hope they do it. I am looking forward to becoming a U-verse subscriber some time next week.

Monday, November 5, 2007

Reliance Confirms Microsoft-based IPTV Service

Reliance in India has confirmed that it will use Microsoft's Mediaroom software for its IPTV launch in March. It plans to introduce IPTV services in Delhi and Mumbai at that time. Reliance said that it will have the exclusive deployment rights for Microsoft's software in India in a deal that has been said to be worth $500 million.

Reliance and Microsoft have been working together for a long time, so this announcements confirms a long standing relationship. Reliance joins other major carriers in India in introducing IPTV services in Delhi and Mumbai. It appears that these will be very competitive markets next year.

Friday, November 2, 2007

Verizon adding 120 HD Channels

Verizon plans to increase from 30 HD channels today to 150 HD channels by the end of 2008 on its FiOS TV IPTV service. By the spring of 2008, the company expects to have 60 HD channels. Its Home Media DVR will be able to record HD programming and then play them on any TV in the home connected to the FiOS TV service.

Verizon FiOS TV currently offers the following HD national channels: TNT HD, ESPN HD, ESPN2 HD, NFL Network HD, HD Net, HD Net Movies, Universal HD, Discovery HD Theater, Wealth TV HD, National Geographic Channel HD, MHD, Food Network HD, HGTV HD, Lifetime Movie Network HD and A&E HD. It also offers local broadcast channels in high definition and HD premium channels, including HBO HD, Cinemax HD, Showtime HD, TMC HD and Starz HD.

This shows that HD will become the standard method for watching TV in the U.S. over the next couple of years. The general availability of inexpensive HD sets will cause the rest of the world to follow before much longer.

Ukraine IPTV Heating Up

The Ukrainian state telecom operator Ukrtelecom plans to launch an IPTV service together with the Independent Ukrainian TV Corporation. It will begin testing the service in December this year with a full launch expected in March or April 2008.

The service will be called and will offer about 100 Ukrainian and foreign channels and a video on demand service. Set-top boxes--some of which will be PVR enabled--will be provided on a rental basis and the group says it will price packages at a similar level to analogue TV services via cable. Ukrtelecom also plans to launch more new services, including a VoIP service called Ogo! Agent.

There are five other companies licensed for IPTV in the Ukraine: Comstar Ukraine (Stream TV) and Golden Telecom Ukraine, both daughter companies of Russian operators, as well as Ukrainian operators Cosmonova, Norma Plus, and No Plus.

Comstar and Golden Telecom have both already completed IPTV tests with Comstar planning start the its second stage of testing this month. It currently offers 40 channels and will increase the package to 60 channels. Golden Telecom says it will finish its field tests by the end of 2007 and launch a service early in 2008.

A number of factors are currently hindering development of the Ukrainian IPTV market. Operators currently require two licences (one from the telecommunication authority and another one from the broadcast regulator). Also the cost of set-top boxes at $250-$450 each makes the business case difficult at current monthly subscription rates.

TelcoTV is a global phenomenon. There is a lot of activity in the Russian Federation. I would appreciate comments from any readers who have first hand knowledge.

Thursday, November 1, 2007

Manitoba Telecom at 75K IPTV Subscribers

Manitoba Telecom now has 75 thousand IPTV subscribers, which is an increase of 5 thousand since April 2007. Its subscriber base has grown by more than 30 thousand in the last two years. MTS offers IPTV in the city of Winnipeg.

Manitoba Telecom is one of the real pioneers in IPTV. It has developed a unique channel packaging and pricing scheme that you can see at its website. It comes as close to an a la carte approach as you can use in North America based on content owner requirements.

UK Post Office to Offer IPTV

The Post Office in the UK is studying whether it should offer an IPTV service similar to the BT Vision service. The Post Office already offers broadband services based on BT wholesale lines.

In addition to broadband services, the UK Post Office offers a range of financial services.

IPTV is becoming a fundamental part of a broadband offering in the UK as it has in France and other countries in Europe.