Saturday, March 29, 2008

Korean Providers to Invest $15.8B in IPTV In 2008

The Broadcasting and Communications Commission in Korea stated that telecom firms there are to invest around $15.8 billion on IPTV services in 2008.

KT, the dominant telephone and broadband Internet service provider, alone plans to spend $13 billion, and LG Dacom and Hanarotelecom plan to spend $1.475 billion and $1.23 billion, respectively.

According to the report from the commission, the firms have said that they will spend $10.6 billion won on improving networks, $1.14 billion on platforms, $2.23 billion on set-top boxes and another $1.8 billion on purchasing content.

The Electronics and Telecommunications Research Institute estimates IPTV will be a $5.4 billion market this year, meaning it will take a few years for the firms to start making any profits. Government agencies expect IPTV subscribers to reach 2 million this year and grow to 3.3 million by 2012.

According to the report from the commission, the firms have said that they will spend 1.06 trillion won on improving networks, 113.7 billion won on platforms, 223 billion won on set-top boxes and another 180 billion won on purchasing content. The Electronics and Telecommunications Research Institute estimates IPTV will be a 540-billion won market this year, meaning it will take a few years for the firms to start making any profits. Government agencies expect IPTV subscribers to reach 2 million this year and grow to 3.3 million by 2012.

It looks like IPTV will have a big year in Korea in 2008. I am still a bit confused about which of these services are Internet over the top and which are typical walled garden Telco IPTV services. I would appreciate clarification from anybody on the scene.

Smart Telecom to Launch IPTV in Ireland

Competitive provider Smart Telecom will start a soft launch of its IPTV service in April. It will select customers on short loops in order to better manage service quality during this initial phase.

The new service will be capable of delivering more than 100 TV and radio channels to 550 thousand homes across Ireland, where it has 37 unbundled exchanges. The service will also include time shifting that can allow viewers to watch programs broadcast the previous.

Smart is making a €2.5m investment in an MPEG 4 IPTV headend and middleware solution from Thomson.

This is the second IPTV service from a competitive carrier in Ireland. It leaves Eircom with two IPTV competitors and as the only Western European incumbent with no announced plans for IPTV.

Chunghwa Telecom Ends 2007 with 394K IPTV Subscribers

Chunghwa Telecom, the incumbent in Taiwan, ended 2007 with 394 thousand subscribers to its MOD IPTV service. This is up from 249 thousand at the end of 2006.

Chunghwa has 4,500 hours of video on demand content available and updates 400 to 500 hours each week. It also offer more than 60 broadcast channels, which is up from 32 channels in 2006. It will also offer the 2008 Olympic games in HD as well as some baseball games.

Chunghwa is also making significant progress with its fiber deployments. Its fiber subscriptions increased from 185.3 thousand at the end of 2006, to 536.9 thousand at the end 2007 an increase of more than 350 thousand. It currently provides fiber services in 15,383 buildings, which is 90 percent market share among all fiber operators in Taiwan.

Chunghwa is raising the bandwidth of its DSL services as well in order to better serve its IPTV service. At the end of 2007, 28.5 percent of its broadband subscribers had speeds in excess of 8 Mbps., which is up from 20.6 percent at the end of 2006.

Chunghwa is continuing rapid but steady progress with its IPTV service. 2008 should be a good year for it as well.

Limitations of Internet TV

The Telegraph published and interesting article laying out some of the limitations of watching TV over the Internet and the trade offs between downloading and streaming. It points out that the download caps will limit many broadband users to about one our or so of viewing per day with many UK broadband ISPs. It also points out that the other broadband ISPs without download caps have fair use policies that may also limit the amount of downloading.

The article points out that streaming to the PC uses much less bandwidth and, therefor, permits much more viewing.

This is a real limitation that will limit watching content from the Internet on the TV to only one or two programs each day. With these limitations, the Internet will not provide a real alternative to Telco IPTV, cable, or broadcast TV services and only be a supplement.

Friday, March 21, 2008

FCC Requires Open IPTV

In a recent ruling that gives waivers to smaller cable systems for rules that require open set-top boxes, there is a footnote that requires an open security system for U.S. Telco IPTV providers that permits interconnection by consumer electronic devices by July 1, 2008.

The U.S. IPTV providers stated to the FCC that their security systems were already open. The FCC has not yet decided that this is or is not the case.

This could be a real problem for the U.S. IPTV providers. Every IPTV content security system is proprietary and based on a single company's system. The IPTV industry has not developed an interoperable standard such as the Cable Lab's cable card that can be used across systems. It is clearly not feasible for consumer electronic companies to deploy all of the proprietary content security systems that the U.S. IPTV providers are using in their products. There has to be a single standard that they can implement.

Thursday, March 20, 2008

Taiwanese Cable Company Trials IPTV

Vastar Cable TV System in Taiwan has started a trial of Vee TV, its HD IPTV service. It delivers Vee TV service through its fiber network. The current trial broadcast consists of three HD digital channels as well as HD video on demand with content including NHK programs from Japan, nature shows and adult movies.

Vastar plans to set a minimum monthly fee of $NT89 ($US3) for 32 channels. It is deploying FTTC, FTTB, and FTTH. Vastar has completed FTTB in about 1,000 buildings. Its fiber infrastructure can serve 600,000-700,000 subscribers.

Cable companies globally are looking at fiber broadband architectures for delivering services. Telco fiber deployments are putting pressure on cable companies to upgrade to fiber. This pressure is the most intent in new construction where fiber services are a strong sales feature.

Sunday, March 16, 2008

Microsoft Mediaroom Application Environment

Light Reading published an article describing a new version of the Microsoft IPTV software called Milwaukee. Microsoft calls Milwaukee the Multimedia Applications Environment (MAE). the MAE facilitates the development of new IPTV applications and the ability to pull in existing data feeds, including real-time updates, from websites to run concurrently on-screen with video streams; and the ability to build recommendation and personalization tools.

Microsoft gave demonstration of the streamed TV/Website data at the IPTV World Forum, using feeds and relevant background data from Nascar's Website, alongside and/or overlaid with video footage of a NASCAR race.

BT has expressed strong interest in using the capabilities of the NAE. The NAE is planned for a beta release in May 2008 and general release in August.

This is the kind of capability that Microsoft will need to takes its service provider customers to the next level of IPTV capability. It is certainly the kind of thing that they were banking on when they selected Mediaroom.

Thursday, March 13, 2008

Telecom Italia Rejects Microsoft Mediaroom

Apparently Telecom Italia made a decision not to use the Microsoft Mediaroom IPTV software system that it had been testing its its labs for the last several years. The reports are that Telefonica preferred that that Telecom Italia use the MyView middleware software that it developed. Alcatel-Lucent took over the development and marketing of this package in 2006.

Telecom Italia has been using Alcatel-Lucent's OMP system since its IPTV service was introduced.

While this is a significant blow, Microsoft still has a large number of tier 1 service providers using its Mediaroom software. This loss does not threaten the eventual market dominance that we projected for Microsoft in our report Global Opportunities in Wireline Broadband Networks.

It is clear that Telecom Italia will need to move from OMP to another middleware package. Moving to My View will at least keep it within the Alcatel-Lucent orbit.

TeliaSonera to start Fiber Deployment

TeliaSonera announced that it will begin upgrading its network to both FTTP and VDSL technologies to 1.5 million households across Sweden. Supporting HD and multiple TVs in the home were cited as reasons for this upgrade.

TeliaSonera is now responding to broad fiber deployments by municipalities and utility firms. It is finally acknowledging that ADSL-2+ cannot compete with fiber.

Thomson Bags Telenor

Telenor the Norwegian incumbent appears to have selected Thomson for its IPTV service. It appears that Thomson will supply middleware, video on demand servers, and set-top boxes for deployment in Norway, Sweden, and Denmark.

Assuming that this story holds up, this is a great win for Thomson. Telenor is one of the very last Western European incumbents to selected its IPTV system vendors.

Telenor is facing strong, well entrenched competition in Scandinavia. The fiber based competitive carriers already have a strong position in the Norwegian market already. I have always wondered why Telenor has waited so long.

OTE in Greece to Deploy Ericsson IPTV Systems

Greek incumbent telco OTE has selected Ericsson to supply and integrate an IPTV system. Ericsson will deploy headend systems from its Tandberg Television subsidiary, a middleware application, video on demand system and a customised consumer portal. The Ericsson IPTV solution will enable OTE to offer new services to its residential broadband customers, including broadcast TV channels, video on demand, an electronic program guide, and PVR capabilities.

OTE is joining On Telecoms offering IPTV services in Greece. This shows the extent that IPTV has proliferated across Europe.

Wednesday, March 12, 2008

Free at 2.3 Million IPTV Capable Subscribers

In its 2007 earnings presentation Free stated that 2.3 million of its 2.9 million broadband subscribers were capable of receiving pay TV services. This is an increase from 1.7 million at the end of 2006. (This is the best estimate that I can find of the number of its subscribers that are capable of receiving IPTV services.)

Free also stated that 50.4 percent of its subscribers have a Freebox HD, which is capable of receiving HD content. It also stated that 80 percent of its subscribers are accessing Pay TV services. (It is not clear what this is 80 percent of. I will try to find out.)

Free also had 1.3 video on demand purchase and subscriptions in 4Q07, which is up from 768 thousand in 4Q06.

I have believed for a long time that Free is the leading IPTV service provider globally for a long time. The way it offers its service and presents its numbers makes this a bit murky. It is not clear how many of its subscribes actually watch TV using its service. However, it is so far ahead of any other IPTV service provider that these issues seem like quibbles.

Free's FTTH Plans in France

Free has given an update on its FTTH plans. It stated that there are three rationales for FTTH:
  • Improved consumer experience based on higher data speeds, better HD support and improved ability to support multiple TVs, and the high satisfaction level of Free's existing FTTH subscribers.
  • Technology improvements that provide higher quality and higher satisfaction with the service.
  • Spending on CapEx for deploying fiber rather than OpEx unbundled loop rentals to France Telecom, lower churn and increased ARPU, and future proofing the network.
Free pointed out that it has spend 1.06 billion euros of CapEx on unbundling that includes equipping 1,500 COs with DSLAMs and creating a 33 thousand km back haul network in order to support 2.3 million unbundled subscribers.

The company plans to spend 1 billion euros between now and 2012 to pass 4 million homes with fiber services by 2012. This will significantly reduce its dependence on France Telecom's network.

Free is also hoping for favorable regulatory rulings in France that will provide access to France Telecom's ducts along with a new law in 2008 that will regulate vertical deployment and building access.

Free expects to pass 70 percent of the homes in Paris by the end of 2009 using point-to-point active Ethernet technology. It also expects to pass 300 thousand additional homes in the rest of France including rollouts in Montpelier, Valenciennes, and the Paris suburbs.

Free has an aggressive FTTH plan in France and seems to be leading the market at this time. I believe that this investment will pay great dividends for the company. It is quite interesting to see that its FTTH investment is quite in line with its ADSL investment.

Neuf Cegetel FTTH Plans

Neuf Cegetel joins France Telecom and Free in France with FTTH deployment plans. It ended 2007 with 130 thousand homes passed by fiber and 20 thousand subscribers. It plans to invest 300 million euros to pass 1 million homes by the end of 2009. It expects to have 250 thousand FTTH subscribers at that time.

Neuf Cegetel is targeting over 500 thousand homes in Paris and its suburbs based on successful cooperation with local authorities. It also has public/private partnerships in Rennes, Bordeaux, and Grand Nancy and agreements with municipalities in Toulouse and Strasbourg.

FTTH is moving forward based on partnerships that spread the risk. The competitive structure of the French market has facilitated fiber. The incumbent is not able to control the situation as is the case in the U.S.

Neuf Cegetel Targets 1 Million IPTV Subscribers in 2008

Neuf Cegetel has set a target to grow from its current base of 750 thousand IPTV subscribers to 1 million by the end of 2008.

Neuf Cegetel is introducing a new video on demand service based on content from the top French studios as well as leading Hollywood studios. Its video on demand service will offer 3,500 films and 5,000 TV programs.

Neuf Cegetel has also developed Pure Pixel, a technology for enhancing the reliability of IP video. This system involves real time retransmission and end-to-end correction of data lost between the network and the customer’s set-top box. It will be available to all Neuf TV HD customers, and be phased in gradually across the channels from May 2008, reaching all channels in the Neuf TV service by next autumn.

Neuf Cegetel is in good shape to achieve this goal. IPTV has been widely accepted in France. These two new services will support its efforts to increase its TV customer base.

ATT Has 231K IPTV Subscribers

ATT now has 231 thousand IPTV subscribers and expects to have more than 1 million by the end of 2008. It has found that 90 percent of its U-verse IPTV subscribers also take a broadband service. It also has found that 60 percent of its subscribers were former cable users.

ATT has also found that U-verse is affecting cable pricing based on the reaction of the cable companies to its introduction in a new area.

ATT is continuing its progress an its target of 1 million IPTV subscribers by the end of 2008 seems to be well within range.

ATT Moving to Service Integration

A Light Reading article describes an ATT presentation that discusses how it plans to integrate services. ATT stated that by the end of 2008 it plans to integrate services in at least some of the following ways:
  • A mobile video share service that allows cell phone users to share video with each other in real time and add a video locker so that content could be uploaded and viewed on a mobile phone, PC, or TV.
  • A single voice plan to cover all devices -fixed or mobile.
  • A combined plan for fixed broadband and wireless broadband.

This is a smart strategy that goes beyond bundling. It will clearly reduce churn.

NEC to offer IPTV System

NEC will launch an IPTV system to the international market. It expects that this system will generate 50 billion yen ($US488 M) in sales by 2010. This IPTV system will include:

  1. NEC products, from network architecture to delivery servers and household terminals, which will make it possible to guarantee the Quality of Service (QoS), Quality of Experience (QoE) and advanced security demanded along with interactive services.
  2. Release of a video on demand server in April as the core system for new IPTV solutions.
  3. PCCW/CASCADE's "QualiTVision*" middleware which has enabled IPTV deployments in Hong Kong and Thailand.
NEC is coming late to the game. Nearly all of the major carriers have committed to their IPTV architectures. Its opportunities are likely to come from Eastern Europe, the former Soviet states, Latin America, and the developing countries in Asia. Penetrating China is likely to be difficult for NEC, but it still may have some opportunities in India.

Tuesday, March 11, 2008

Open IPTV Forum Publishes End-to-End Architecture

The Open IPTV Forum has published a document describing its end-to-end architecture for IPTV systems. The Forum is working towards an end-to-end specification to allow any consumer end‑device, compliant to the Open IPTV Forum specifications, to access enriched and personalized IPTV services.

While I believe that IPTV standards are important, I wonder how effective they will be since most major service providers have already committed to their architectures. They will have to do a lot of retrofitting to implement IPTV standards as they are created.

Monday, March 10, 2008

Viaccess Acquires Orca Interactive

Viaccess, the French content security company, acquire Israeli middleware provider Orca Interactive for $21.4 million. Ordca stated that its middleware supports 1.2 million active subscribers globally.

Viacess acquired Orca for a low price and now has the ability to provide middleware as well as content security. This acquisition should help Viaccess in tier 2 and tier 3 markets in particular. It will not be much help in competing with Microsoft for Tier 1s

TeliaSonera Selects Edgeware for Video On Demand

TeliaSonera has deployed Edgeware video on demand servers to support its video on demand service. Edgeware is now support 300 thousand IPTV subscribers at TeliaSonera.

TeliaSonera is using Edgeware’s Orbit 2x, which is a video server appliance with Each up to 3 TB of flash memory content storage and is capable of streaming 20 Gbps to more than
16,000 concurrent users.

Edgeware is one of the first IPTV video on demand systems to use flash memory rather than hard disks. This should make its systems more reliable by eliminating mechanical storage devices. TUS in Slovenia is also using Edgeware and told me that they were quite impressed with the small size of the device.

Verimatrix Introduces PC Video Player

Verimatrix introduced its ViewRight PC Player 2.0. This player uses Verimatrix's industrial grade content protection as part of the product. This player operates with the key management system that IPTV and other pay TV providers use to protect their content.

This player can be used by IPTV providers that use Verimatrix content security to deliver content to the PC as well as the TV. It could also be used by over the top Internet video providers that implement Verimatrix's content security.

I think that this kind of player could open PC delivery to a broader set of content. The broadcasters and the Hollywood studios should be significantly more comfortable with the security provided with this kind of system. They are likely to be more willing to provide the hottest titles to the PC that support this level of content security.

Verimatrix is a pioneer of this kind of player. Clearly, the other established content security companies can offer similar products and will as they become popular.

Saturday, March 8, 2008

Telecom Italia Misses 2007 IPTV targets

Telecom Italia ended 2007 with 80 thousand IPTV subscribers, which was well below its target of 200 thousand for the year. It stated that this shortfall was "due to slight delay on IPTV stabilization". It did end 2007 by adding 30 thousand IPTV subscribers in December.

Telecom Italia's current target is to end 2008 with 300 thousand IPTV subscribers.

Telecom Italia got off to a slow start with its IPTV service. It appears to me that it has had difficulty in managing its IPTV network. It currently uses Alcatel-Lucent's OMP IPTV middleware software, which is a well proved package. It is unlikely that this middleware is the source of its problems.

Friday, March 7, 2008

PCCW at 882K IPTV Subscribers

PCCW ended 2007 with 882 thousand IPTV subscribers up from 758 thousand at the end of 2006. At the end of 2007 628 thousand of these subscribers were paying for the service compared to up from 501 thousand at the end of 2006.

PCCW's IPTV ARPU grew from $18US at the end of 2006 to $US26 at the end of 2007. It has found that its premium sports and HD offerings are important reasons for this increase. Its advertising revenue is starting to gather momentum.

PCCW now offers HD content that includes live sports events, documentaries, and entertainment programming.

PCCW is still the IPTV service to watch. It has shown how to develop a viable business model that includes a basic free service. It is also a leader in IPTV advertising and IPTV interactive services.

Free Provides TV Websites

Free in France is now making it possible for its subscribers to make their own web sites available to TV sets connected to Free's service. The new Telesite service permits Free subscribers to make their TV website accessible from their own TV or to all Free users. It is also possible to integrate videos into these TV websites. The Telesite service can be accessed from the main menu on the Freebox set-top box interface.

This is an interesting addition to IPTV services. I expect that other operators will follow suit and offer similar services themselves.

Wednesday, March 5, 2008

Swisscom Has 70K IPTV Subscsribers

By the end of 2007, 70 thousand households had signed up for Swisscom's Bluewin TV IPTV service. This is an increase of 10 thousand in 4Q07 compared to 20 thousand in 3Q07.

The company stated that Bluewin TV had high costs associated with it, but that its TV quality has "markedly improved". It plans to start offering HD content in 2008.

Swisscom appears to be struggling with its Bluewin TV service. At this stage of its development, I would expect to see the number of new subscriber to increase on a quarter by quarter basis, or remain constant, at least.

Tuesday, March 4, 2008

Deutsche Telekom to Drop IPTV Charges by 17%

Deutsche Telekom announced that it will drop the prices for its IPTV service by 17 percent. This service is now available to 17 million homes in Germany.

The basic package will now cost €49.95 per month (down from €59.95) and include a 16 Mbps data service , 70 broadcast channels, video on demand, free calls to German fixed lines and a DVR. The premium packages will cost €59.95 and €69.95 per month.

This seems like death by a thousand cuts. Deutsche Telekom has been trying to get a high price for its IPTV service by European standards. Many other carriers offer it for free as a basic part of a broadband subscription or for a very low monthly fee. TeliaSonera in Sweden saw its IPTV service languish until it started offering it for free last year. Its IPTV sales took off at that point.

Saturday, March 1, 2008

EC Insisting on Fiber Unbundling

Light Reading published an article on the EC's position on FTTH unbundling. European Commissioner Viviane Reding has stated that regulatory holidays are not on the agenda. She does not support the unbundling exemptions that several European carriers have requested for their fiber build outs.

One issue with this is that the EC has not figured out how to unbundle PON, since PON permits a single fiber loop to be shared by multiple subscribers.

The EC has to face tough issues to follow through with fiber unbundling. The sharing of PON loops is only one of them. The more important issue is to what degree fiber unbundling will inhibit deployment. Telefonica in Spain, in particular, has taken the position that it will not deploy fiber if it has to provide competitive access.

FTTH Council Global FTTH Deployments

The FTTH Council has made a press release giving rankings of FTTH global FTTH penetration. It shows South Korea, Hong Kong, and Japan leading with more than 20 percent penetration. Sweden, Taiwan, and Norway have 5 to 10 percent FTTH penetration. It identified 8 more countries with 1 to 5 percent FTTH penetration.

IPTV is an important driver for FTTH in North America and Europe. High speed data services tend to be the most important FTTH application in Asia. In any case, FTTH is an important enabler for advanced IPTV, especially multiple streams and HD.