Monday, December 29, 2008

Tiscali IPTV Fails in Italy

The Italian ISP Tiscali will cease its Tiscali TV IPTV service at the end of 2008. No reason was given for the termination of the service. Tiscali TV was launched in mid-2007 and has so far attracted about 50,000 subscribers. It was the third entrant into the IPTV business following Fastweb TV and Telecom Italy. Initially only available in Cagliari, Roma and Milan, the service was subsequently also rolled out in Bologna, Florence, Genoa, Naples, Palermo and Turin. There were also plans to take it national. Tiscali TV offered a number of personalised TV services but failed to contract programming from Sky Italia.

Success with IPTV is clearly not easy. This shows the importance of content. It is not possible to succeed in Italy without Sky Italia content.

Friday, December 26, 2008

Upgrading TCP for the Heavy User

I have made a post on my Telco 2020 blog that may be of interest. It discusses how changes to TCP will help the Internet handle traffic from bandwidth hogs and provide better service to casual users.

I think that this is a potential solution for the Net Neutrality problem, but I am no sure that it will help and IPTV network dominated by unicast IPTV traffic.

Thursday, December 18, 2008

SES Americom to Kill Wholesale IPTV

Telephony published an article that said that SES Americom will discontinue its IP-Prime satellite based IPTV content distribution service in July 2009. In the past year, IP-Prime signed agreements with 70 small telecom operators, 37 of which have reached commercial deployment. The company estimates the number of subscribers remained at less than 10,000 at the end of November.

The small independent U.S. Telcos are a tough market. There are about 1,000 of them with an average of only a couple of thousand customers each. There are actually quite a number with less than 1,000 customers. It is hard to build up a large subscriber base focusing at the low end of this market.

Saturday, December 13, 2008

ITU Issues Home Networking Standard

The ITU has issued the first the first standard for in-home networks capable of delivering room-to-room HDTV. The standard operates over power, coaxial, phone and other home network wiring. The ITU says that it will give up to 20 times the throughput of existing wireless technologies and three times that of existing wired technologies. products could be on the market as early as 2010.

The ITU will work with the HomeGrid Forum, which has been formed to support the standards efforts.

Recommendation ITU-T G.9960 focuses on the physical or PHY layer, giving the data bit rate and quality of service necessary for triple-play residential services as well as business-type services delivered over xDSL, PON, or other access technology. In step with ITU guidelines on new standards development, several power saving modes have been incorporated. Ongoing work is focused on the media access control (MAC) layer.

Home networking is clearly a key issue for IPTV services. The ITU is entering a field that is already occupied by MoCA and HPNA. The ITU brings considerable weight as the premier global telecom standards organization.

Wednesday, December 10, 2008

Light Reading IPTV Report

Light Reading has published a report on IPTV that is well worth reading. The market view point is U.S. oriented, but the technology and services discussions apply globally. It is definitely worth reading if you would like a survey of the state of the services and technologies.

ATT User Experience

Alan Weinkrantz has written a blog posting describing how he got ATT to drop his cost for a triple bundle from $164 per month to $94 per month by threatening to move to a competitor.

This shows how competitive it is becoming where Telco IPTV services are available in the U.S. I am sure that the cable companies are making similar offers to minimize churn.

ATT Reaches 1M IPTV Subscribers

ATT announced that it will reach 1 million U-verse IPTV subscribers in a few days. It expects that the service will pass 17 million homes by the end of 2008. It is also achieving 10 percent penetration within 12 months of entering a new market.

ATT also said that its U-verse service install times have decreased by 17 percent since 4Q07. More than 90 percent of its U-verse subscribers also subscribe to a broadband data service. 54 percent of its U-verse subscribers did not previously subscribe to DSL services.

ATT has put U-verse on the map as a major competitor in the U.S. pay TV market. The U.S. cable companies clearly have to include ATT as well as Verizon in their competitive calculations.

Friday, December 5, 2008

PCCW IPTV Innovation

Light Reading published an article that summarizes a speech given by PCCW at the IPTV World Forum Asia. It discusses how PCCW has turned IPTV from a defensive service into an offensive service through innovation.

This blog has chronicled many of PCCW's innovations over the last two years. Click on the PCCW link below to see other articles.

PCCW is really the poster child how to use IPTV to improve revenues, improve market position, and to reduce churn.

Thursday, December 4, 2008

Telecom Italia Projects 1.5M IPTV Subscribers in 2011

In its update to its strategic plan for 2009-2011 Telecom Italia stated that its goal is to increase its IPTV subscribers to 1.5 million by the end of 2011. The company had 218,000 IPTV subscribers at the end of 3Q08 and plans to have 300,000 IPTV subscribers at the end of 2008.

The goal of 1.5 million IPTV subscribers by the end of 2011 is attainable with an aggressive offering. However, the company is struggling to meet its 2008 target and has not yet shown that it has found how to generate significant growth in its IPTV service.

Monday, November 24, 2008

Strong Demand for TV in Columbia

TVTelco Daily published an article that describes a survey in Columbia that finds strong demand for TV services in both rural and urban homes. It found that there are 1.3 TVs per home in rural areas and 1.8 TV's per home in urban homes. It also found that 95 percent of rural homes have TV and 99 percent of urban homes have TVs.

The primary result of the survey was that both rural and urban homes prefer TV over all other media including radio, newspapers, magazines, and the Internet.

This indicates that there will be demand for IPTV services. The problem will be to match pricing with willingness to pay.

Thursday, November 20, 2008

Amino Acquires Tilgin Set-top Box Business

Amino has acquire Tilgin's IPTV set-top box business. Tilgin has sold about 500,000 set-top boxes. Amino will acquire new features as part of this deal that include picture in picture, whole home connectivity, and green power.

Tilgin will now focus is on IP Residential Gateways. Tilgin said that it has a strong market position and leading gateway products. Tilgin's IPTV business has not reached the volumes required for sustained profitability. Amino and Tilgin intends to commence a sales cooperation regarding IP Residential Gateways.

There are fewer major new opportunities in Telco IPTV now. We will see more companies that have not reached critical mass following the divestiture or acquisition route.

Wednesday, November 19, 2008

Nokia Siemens Introduces Middleware SDK

Nokia Siemens introduced a software development kit (SDK) as part of its latest IPTV middleware software release. This SDK allows for third party customizable user interface development on HTML and Java platforms. Operators and third party developers can customize and enhance IPTV offerings.

This SDK has been used by both Belgacom in Belgium and KPN in The Netherlands to customize their IPTV offerings for the last couple of years. Nokia Siemens in December will make this capability available to its other middleware customers and its small U.S. telco customers, in particular.

Belgacom has used the SDK to give the broadcasters the ability to provide a customized interactive interface along with its programs. The Belgian Idol program uses this capability to give viewers the ability to vote through their TVs for a price of one euro per vote. It shows the real time results of the voting, which creates an auction environment that encourages viewers to vote multiple times to support their favorites.

Belgacom also uses the SDK to provide a mosaic based electronic program guide (EPG). When using this mosaic EPG, the program is viewed using 65 percent of the screen. A mosaic of picture in picture windows of 16 channels around the TV window in the remaining space on the screen. The user then can request the next group of 16 channels or select one of the channels being displayed.

Nokia Siemens is taking the right approach. What it is trying to do is difficult and there are often limitations in these SDKs that limit their applicability. The proof of the pudding will be to see how successfully its customers are in using it to customize and enhance their services and to add applications.

Monday, November 17, 2008

SK Telecom Loses 36K IPTV Subscribers in 3Q08

SK Telecom (formerly Hanaro Telecom) lost 36,184 in 3Q08, leaving it with 768,625 subscribers at the end of the quarter. This was on top of losing another 77,547 subscribers in 2Q08. SK Telecom offers a video on demand service and is expected to offer a broadcast service in the next few month. Its revenue for the service was $15 million U.S. during the quarter.

The company lost 21,485 broadband subscribers in 3Q08 leaving it with a total of 3.44 million broadband subscribers. This is on top of a loss of 160,599 broadband subscribers in 2Q08. It has not added broadband subscribers since 3Q07.

SK Telecom has been hit with a significant shrinkage of its broadband business since it acquired Hanaro. Its loss of IPTV subscribers is a reflection of this trend.

Korea Telecom Adds 102K IPTV Subscribers in 3Q08

Korea Telecom added 102,245 subscribers to its Mega TV video on demand IPTV services in 3Q08, ending the the quarter with 808,101 subscribers. Its revenue for the services was $10.1 million U.S.

The company has just begun to deliver broadcast channels as part of its Mega TV' services , the day following the approval by the Korea Communications Commission (KCC) of its monthly rate of $11 per month U.S. The service provide 33 broadcast channels, including the four national channels of KBS, MBC, SBS and EBS, and about 85,000 movies and other video-on-demand assets.

KT is also planning to launch a premium IPTV service in June 2009, which will provide 80 channels for $16 per month U.S. The company will offer a discount $9 U.S. per month through February 2009.

Korea Telecom's video on demand service has been quite successful. It will be interesting to see how many subscribers convert to the broadcast service. Its video on demand revenue subscribers was about $4 U.S. per month in 3Q08, so the broadcast package represents a significant percentage increase in spending.

Hong Kong Broadband at 156K IPTV Subscribers

City Telecom's Hong Kong Broadband ended its fiscal year at the end of August 2008 with 156,000 IPTV subscribers, an increase of 20,000 subscribers over the previous six months. The company also had 316,000 broadband subscribers, an increase of 37,000 over the same period. It stated that it now has more broadband subscribers than the cable TV company in Hong Kong.

City Telecom seems to have found the way to increase its IPTV subscriber base, which has been flat over the last couple of years.

Sunday, November 16, 2008

Telco IPTV Network Architecture

I just published a post on my Telecom 2020 blog that you may find interesting. It discusses the new IPTV networking announcements by Alcatel-Lucent and Cisco and their limitations.

Friday, November 14, 2008

Telefonica Spain Adds 13K IPTV Subscribers in 3Q08

Telefonica added 13,000 IPTV subscribers in 3Q08, giving it 589,600 IPTV subscribers at the end of the quarter. Its O2 operation in the Czech Republic grew nearly as much, 10,200 IPTV subscribers, leaving it 108,100 subscribers at the end of the quarter.

Telefonica's total pay TV base grew by 130,000 subscribers to more than 2.1 million at the end of the quarter. The company has a significant satellite TV offering in South America, that accounts for nearly all of the increase. Its pay TV offering in Brazil is successful with 436,100 subscribers at the end of the quarter.

Telefonica does plan to introduce HDTV before the end of 2008.

Telefonica's IPTV business in Spain has hit a real flat spopt with a significant decrease in its quarterly adds over the last four quarters. It will have to take a different approach to get sales moving again. HD should help.

I believe that Telefonica is offering an IPTV service in Brazil, but it has not split out the IPTV vs. the satellite numbers.

Telefonica Spain Adds 13K

Thursday, November 13, 2008

BT Adds 38K IPTV Subscribers in 3Q08

British Telecom added 38,000 new BT Vision IPTV subscribers in 3Q08, giving it a total of 320,000 at the end of the quarter. This total has increased to 340,000 since the end of the quarter. An average of 83 percent of the customers added in 3Q08 chose to take a subscription pack, nearly three times as many as last year.

The rate at which BT added new customers to its BT Vision IPTV service declined sharply in the quarter. Apparently this rate is holding steady in 4Q08, since the company has added 20,000 new subscribers half way through the quarter. Consumer belt tightening may be a significant issue at this time.

Portugal Telecom Adds 95K TV Subscribers in 3Q08

Portugal Telecom add 95,000 IPTV and satellite customers in 3Q08, leaving it with a total of 211,000 at the end of the quarter. It stated that its TV offer is reducing churn and attracting new voice and data customers as around 60% of IPTV net adds are new customers.

In June 2008, Portugal Telecom included Disney Channel in its basic offer. It broadcasted the first free-to-air program HD to all Meo customers, including the Euro 2008 football championship as well as the Olympic Games in HD. In September, Meo started broadcasting the channels of five leading European football clubs (Barcelona, Chelsea, Inter, Manchester United and Real Madrid). In addition, it entered into an exclusive agreement with a leading Portuguese football club, Sport Lisboa e Benfica.

Meo provides more than 110 TV channels and over 1,500 VOD titles. The VOD offer, which include blockbusters from five has been used by about 40 percent of its Meo subscribers, who have consumed an average of 2.8 movies per month.

Meo TV is a real success for Portugal Telecom. It added significantly more Meo customers than broadband customers. Meo is clearly helping Portugal Telecom to increase its over all market share.

The company has not stated how many of its customers are IPTV customers. One of the readers of this blog posted that about 1/3 of its customers are satellite customers. This would give it about 140,000 IPTV customers.

Cisco Introduces IPTV Enabled Edge Router

Cisco introduced its Aggregation Services Router (ASR) 9000 that will provide significant increases in performance over its work horse 7600 routers with a total of 6.4 terabits per second of capacity.

The ASR 9000 incorporates the Cisco Advanced Video Services Module (AVSM) with 4 terabyts of flash RAM storage that offers content caching, ad insertion, fast channel change and error correction of video streams. Fast channel change and onboard error correction for both unicast and multicast video traffic helps ensure that errors can be detected by any set-top box and retransmitted within milliseconds.

The AVSM capabilities of the AVSM provide similar capabilities to Alcatel-Lucent's TPSDA 2.0 approach that provides similar capabilities. Both approach will require support from the IPTV middleware to get their full effect.

The 4 TB of storage will be enough to store about 1,000 hours of HD content. This will be enough for the most popular video on demand assets but not for the long tail of for an extensive NPVR service. Cisco will have to add a lot more storage to really offload video traffic from the network as it is currently claiming. I will write a column for my Telco 2020 blog that will discuss this issue in more detail in a couple of days. I just don't think that a distributed approach will hold up over the long term.

Broadband Forum Tackles IPTV

The Broadband Forum, formerly the DSL Forum, released BroadbandSuite 3.0, which provides specifications for triple play delivered via GPON and bonded DSL over a QoS-enabled Ethernet architecture, and remote management beyond the gateway to address video and storage
devices. BroadbandSuite 2.0, released in 2007, provided a roadmap for triple-play access via ADSL-2+.

The Broadband Forum has been the leader in developing useful standards for broadband networks. Its TR-069 specification that BroadbandSuite 3.0 is based on is being broadly accepted as the primary way to manage devices on home networks.

Wednesday, November 12, 2008

Singtel Adds 1K IPTV Subscribers in 3Q08

Singtel added about 1,000 new subscribers to its mio TV IPTV service, giving it a total of about 46,000 subscribers at the end of the quarter. The company experienced churn due to the expiration of its introductory “waiver of minimum spend” promotion.

In September 2008, Singtel introduced SeasonPass an on demand service which provides viewing of the latest season of Hollywood hit TV shows within 24 hours of their US telecast time, following deals with 3 major Hollywood studios.

Singtel is demonstrating once again that introductory offers that involve a significant increase in monthly fees after some period of time leads to significant churn when the promotion expires.

Tuesday, November 11, 2008

Microsoft Mediaroom Supporting 2M Subscribers

The Microsoft Mediaroom IPTV software now supports 2 million subscriber homes, doubling in less than one year. There are nearly 4 million set-top boxes worldwide in these homes. In the past quarter , 500,000 new Mediaroom subscribers globally. ATT is one of Microsoft’s fastest-growing Mediaroom customers with 781,000 AT&T U-verse IPTV subscribers.

Microsoft is reaping the rewards of its Tier 1 carrier wins. It moving into the number one position with merchant software packages.

Sunday, November 9, 2008

DOCSIS 3.0 is Cheap

An article on Light Reading cited a statement by Charter Communications that it will cost about $8 to $10 per subscriber to bring DOCSIS 3.0 services to a home, including the new cable modem termination system (CMTS) equipment and the routing systems. It does not include the cost of the new DOCSIS 3.0 cable modem or the cost of provisioning the service.

Verizon has said that it costs them $800 to $1,000 per home to make its FiOS fiber service available with a maximum 50 Mbps data service today. The cable companies can accomplish the same thing for one percent the cost. DOCSIS 3.0 will provide the cable companies a strong defense against FiOS and be a very strong offensive weapon against ATT's VDSL U-verse service.

Friday, November 7, 2008

Telecom Itallia Adds 38K IPTV Subscribers in 3Q08

Telecom Italia ended 3Q08 with 218,000 IPTV subscribers, an increase of 38,000 in the quarter. It is continuing to say that it will have 300,000 IPTV subscribers by the end of 2008.

Telecom Italia will have to double the quarterly rate of adding IPTV subscribers that it has achieved across the first three quarters of 2008 in order to achieve its goal of 300,000 IPTV subscribers by the end of the year. This is a tall order.

Belgacom Adds 52K IPTV Subscribers in 3Q08

Belgacom added 51,679 IPTV subscribers in 3Q08, ending the quarter with 443,139 subscribers, which gives it a 30 percent share of the Pay TV market in Belgium. Its ARPU was 17.9 euros at the end of September, an increase of 11 percent, year over year. More than 85 percent of Belgian households can be served by Belgacom's IPTV service, and 54 percent can watch HD. This number will increase to 60 percent who can watch HD by the end of 2008.

The continued roll out of VDSL-2 increased the take up of second TVs. At the end of September the total number of second TV users amounted to 53,651 of which 12,063 were added in 3Q08.

Belgacom has invested 55 million euros in its IPTV service in the first three quarters of 2008, including infrastructure and set-top boxes.

Belgacom's IPTV growth continues to be strong in a very competitive market.

Deutsche Telekom Adds 83K IPTV Subscribers in 3Q08

Deutsche Telekom announced that it had 333,000 subscribers signed up for its IPTV service in Germany at the end of 3Q08, and increase of 83,000.

At the end of September, the number of its IPTV customers in Eastern Europe was at 164,000, driven mainly by Croatia, with a total of 92,000

This nearly doubled the number of IPTV subscribers added in 2Q08. Deutsche Telekom will have to double again to reach its goal of 500,000 IPTV subscribers by the end of 2008.

Thursday, November 6, 2008

AT&T to Test Bandwidth Limits

ATT has begun a test in Reno, Nevada that will set monthly limits on broadband users and charge them if they exceed the caps. The trial at first will affect only new DSL users, who will be limited to 20 to 150 gigabytes of monthly downloading depending on their account. Users who go over eventually will be charged $1 per gigabyte, but only after they continue to exceed their limit after two months of warnings.

In December, the test will be applied to existing Reno DSL subscribers. The caps are:
  • 768 Kbps - 20GB monthly limit or 11 min. per day of HD or 44 min. per day of SD
  • 1.5 Mbps - 40 GB or 22 min. per day of HD or 89 min. per day of SD
  • 3 Mbps - 60 GB or 33 min. per day of HD or 133 min. per day of SD
  • 6 Mbps -80 GB or 44 min. per day of HD or 178 min. per day of SD
These limits are not a huge burden for web surfers or even Youtube viewers. They do make a big difference for people who will want to use their broadband connections to use their broadband connection to deliver content to their TV, especially HD content. These caps will make over the top Internet TV services less competitive with ATT's U-verse IPTV service.

Free at 4.1M Broadband Subscribers

Free in France ended 3Q08 with 4.125 million ADSL subscriber with 3.275 million under the Free brand and 850 thousand under the Alice brand. The number of Free broadband subscribers increased by 134,000 during the quarter.

Free did not give enough information to unravel the number of IPTV subscribers. Based on history, the number of IPTV subscribers appears to be more than 2.7 million.

Wednesday, November 5, 2008

Swisscom Adds 15K IPTV Subscribers in 3Q08

Swisscom added 15,000 Bluewind TV IPTV subscribers in 3Q08 giving it a total of 95,000 subscribers at the end of the quarter. The availibility of self-installation reduced the average one-time cost per new customer. At the end of February 2008, Swisscom added four HD channels in to its Bluewin TV service , and launched an offering without a hard-disc recorder.

Swisscom is experiencing steady growth of its IPTV service. It appears that its February service improvements have had a positive effect.

Orange Backs off IPTV in the UK

France Telecom's Orange has run a trial of an IPTV service in the UK following its success in France and has been ready to roll out. But it has decided that this IPTV service was too similar to BT Vision, and wants to rethink how the service should work. The company is looking at different business models.

Orange is also building out its own broadband network, rather than renting lines from BT, which will give it more control and better profit margins.

There has been a lot of discussion that Orange would roll out IPTV in the UK before the end of 2008. This is not going to happen. It looks like Orange is trying to reestablish its position in the UK broadband market. It does not appear that its chances for long term success are very good.

Tuesday, November 4, 2008

Comcast Starting Digital Conversion

Comcast has started the process of converting their analog subscribers to digital. It plans to offer free digital terminal adapters (DTAs) capable of supporting video on demand. Comcast will also give existing digital customers up to two DTAs at no additional cost. The company is charging $1.99 for each DTA a customer wants above that limit.

It has been clear that the cable analog subscribers are those that are most likely to move to Telco IPTV services. Cable subscribers that are considering a digital service must bring in a set-top box. That is a natural point to consider moving from cable to satellite or Telco IPTV services.
Comcast will reduce the likelihood that it will lose customers by converting them to digital with these low cost adapters.

Monday, November 3, 2008

ORCA and BCC to Wholesale IPTV in in Russia

Orca Interactive has partnered with BCC, a system integrator to deliver a wholesale IPTV service across Russia. North-West Telecom, Sibir Telecom, and Southern Telecommunications are incumbent carriers that will market this service to smaller local companies.

I spoke to Orca about this announcement. Orca said that BCC will deliver broadcast content over fiber to the local carriers that sign up to this service. Orca said that broadband penetration is growing across Russia but is still at a relatively low level. This wholesale approach will lower the cost of introducing an IPTV service by providing a shared headend service. This will improve the business case for IPTV in Russia, where the rate of growth is likely to be low compared to Western Europe and North America.

Orca is smart to emphasize less developed markets such as Russia. Less developed countries such as Russia, the Middle East, and Latin America are likely to present the best new IPTV opportunities.

Thursday, October 30, 2008

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.

Tuesday, October 28, 2008

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.

Monday, October 27, 2008

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.

Friday, October 24, 2008

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.

Thursday, October 23, 2008

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 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.

Wednesday, October 22, 2008

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.

Tuesday, October 21, 2008

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.

Thursday, October 16, 2008

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.

Monday, October 13, 2008

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.

Friday, October 10, 2008

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.

Tuesday, September 30, 2008

I Goofed: SonaeCom Ericsson/Orca Correction

I requested clarification of what SonaeCom is doing with its IPTV middleware and received the following reply:

"Following the RFI process that we had in late April (where Orca also participated) two vendors requested us an onsite trial with no commitment from SonaeCom.

Our RFI process had the goal to evaluate the industry trends and roadmaps from the principal players in the market. We often conduct this RFI processes to understand the competitive advantage or disadvantage of the solutions that we are using independently of future intentions.

One of the vendors that requested us an on site trial was Ericsson."

Ericsson's press release is consistent with SonaeCom's statement above. I read too much into it. I apologize to all concerned for this error. I hope that it has not caused too much difficulty.

Zeugma Publishes Broadband Survey

Zeugma published the results of an IDC survey of U.S. 787 consumers that was conducted in August 2008. The survey produced the following conclusions:

On Premium Bandwidth Services:

  • 94 percent of respondents saw value in broadband services that dynamically allocate premium bandwidth for certain types of traffic, such as video, VOIP, gaming, and telecommuter VPNs.
  • 54 percent would actively seek to change service providers if another offered this service; 26 percent would be willing to pay additional fees for premium bandwidth services.

On Bandwidth Capping and Metering

  • 81 percent do not like the idea of establishing a bandwidth cap and charging for use above the cap.
  • 51 percent would try to change service providers if their provider imposed bandwidth caps. Interestingly, light and moderate users are even more opposed to capping and metering than are heavy users.
  • 83 percent either do not know what a gigabyte is or have no idea how many they use.
  • Only 5 percent said unequivocally that “those who use more should pay more

There is a growing gap between the broadband providers and their customers. The Telcos and the cable companies look at the issue from their perspective and are trying to limit traffic growth by punishing power users. This is bad business and policy. Why alienate your best customers?

There is a hidden agenda here. While these caps will not affect many data users, they significantly limit the amount of TV content that can be delivered over the top. The Telcos and cable companies want people to use their own TV services rather than viewing over the top content. This will become a major issue when it becomes apparent to people who want to watch Netflix or CinemaNow content regularly on their TV.

Monday, September 29, 2008

Alcatel-Lucent Targeted Ad System

Alcatel-Lucent introduced a targeted ad system based on its TPSDA 2.0 architecture that adds flash memory application storage to its access nodes, switches, and edge routers.

The targeted and interactive IPTV advertising system gives IPTV operators the ability to insert ads into TV programs that are aimed at particular communities of interest and even specific households. These ads are delivered using anonymous subscriber profiles based on service usage and demographic data authorized via an opt in process and retained in a protected repository by the service provider. The system incorporates subscriber data analysis and management capabilities to support ad targeting and audience measurement features to analyze the effectiveness and return on investment from particular campaigns.

The key elements in the system are:
  • A targeted ad insertion splicer and targeted ad insertion agent integrated into its TPSDA
  • 5930 Interactive Media Manager which enables interactive applications and advertising campaigns
  • 8660 Datagridsuite, 8920 Service Quality Manager, and 5410 Presence Server which unify subscriber data and measure responses

Microsoft has introduced its own ad insertion system last month at IBC and has not announced any support for the Alcatel-Lucent system.

This looks like a comprehensive approach that will enhance its own MiView and OMP middleware packages. Service providers that adopt Alcatel-Lucent's TPSDA 2.0 architecture should be able use this system as well. I don't think that it is tightly coupled with the middleware.

Alcatel-Lucent TPSDA 2.0 Steals Microsoft's Thunder

Alcatel-Lucent has introduced IPTV application awareness into its Triple Play Services Delivery Architecture (TPSDA) 2.0. It will add flash storage to its edge routers, its switches, and its access nodes that will support fast channel change, packet retransmission, and targeted ad insertion.
  • For fast channel change the last few minutes of every multicast channel will be stored in the network and the new channel will be started immediately, eliminating the latency that typically occurs today. Alcatel-Lucent said that HD channel change time will be reduced from several seconds to well under a second.
  • For packet retransmission the network will store enough packets to immediately service the packet retransmission request.
  • For ad insertion targeted ads will be stored and inserted in the network.

If the service provider uses Alcatel-Lucent access nodes, these functions can be provided in the access network. These functions can also be provided in the Alcatel-Lucent switches or edge routers for service providers using Alcatel-Lucent's TPSDA 2.0 architecture.

Alcatel-Lucent has also discussed plans to increase the amount of storage in these network elements in order to support rewind TV and video on demand delivery.

TPSDA 2.0 can support these functions for service providers using access nodes from other manufacturers by implementing them in the switches and edge routers.

Microsoft has not announced any support for these network capabilities.

This is an interesting announcement. It enables middleware companies other than Microsoft to support fast channel change. This includes both the Alcatel-Lucent MiView and OMP middleware as well as other middleware from companies such as Thomson and Orca. This approach to fast channel change will eliminate one of Microsoft's most competitive features.

This approach will give service providers new flexibility in managing the bandwidth demands from an IPTV service, especially as more and more on demand and personalized services are provided. I think the flexibility that it gives in placing storage in the network will improve the ability of service providers to optimize their networks.