Thursday, July 31, 2008

France Telecom adds 107K IPTV Subscribers in 2Q08

France Telecom added 107 thousand IPTV subscribers in France, giving it a total of 1.389 million IPTV subscribers at the end of 2Q08. Its IPTV service is now available to 98 percent of the households in France.

It added 5 thousand IPTV subscribers in Poland, giving it a total of 54 thousand at the end of 2Q08. It added 17 thousand IPTV subscribers in other European countries, giving it a total of 92 thousand. Across all of its European operations, including France, it added 128 thousand IPTV subscribers ending 2Q08 with 1.535 million.

France Telecom continues with a very strong IPTV offering, especially in France. It should experience continuing growth at a similar rate.

Telefonica Adds 22.6K IPTV Subscribers in 2Q08

Telefonica ended 2Q08 with 576,558 IPTV customers, and increase of 22.6 thousand over the quarter. This was an increase of 28 percent year over year.

Telefonica's O2 operation in the Czech Republic ended 2Q08 with 97.9 thousand IPTV subscribers, an increase of 12.7 thousand in the quarter.

Telefonica's IPTV services are growing at a modest rate compared to the other services in Europe. It seems that the company is not putting its priority in this area.

BT Adds 68K IPTV Subscribers

BT add 68 thousand BT Vision IPTV subscribers in 2Q08 ending with a total of 282 thousand. It has enhanced its sports offerings with Setanta Sports 1 for free with a package along with other sports content enhancements such as increased coverage of the Scottish Premier League.

BT continues to add IPTV subscribers at a good rate. It would be interesting to have more information on how well its business model is working. It offers BT Vision as a free service and depends on premium subscriptions and on demand content to generate revenue from the service.

UTStarcom Video Advertising System in Guanxi

The Guanxi Telecom Company, a subsidiary of China Telecom, will use UTStarcom's RollingStream IPTV platform for a new interactive advertising system. The UTStarcom system will provide 3,600 concurrent IPTV streams in 14 cities initially. Set-top boxes will be deployed in supermarkets, department stores, office buildings, and in Guanxi Telecom's facilities.

UTStarcom stated that this system has two fundamental advantages. One is its ability to scale to a large number of screens. An IPTV system is designed to support hundreds of thousand of concurrent viewers, many more than the likely number of advertising screens.

The second advantage is its ability to provide unique streams to different groups of screens. Each stream is like a broadcast channel or a set of on demand content. IPTV systems are built so that each viewer can watch different programming, which enables the delivery of targeted content to each screen. This could be organized by store or even by department within a store.

UTStarcom has pointed out to the past that this kind of advertising is a big business with significant revenues attached to it.

UTStarcom is doing a lot of good work identifying other applications for IPTV systems. These applications can significantly enhance the revenue potential for these services.

Wednesday, July 30, 2008

Nokia Siemens Network Vision

Nokia Siemens held a webinar yesterday discussing its vision for Telco networks. It made a couple of interesting observations. One is that traffic will grow by a factor of 100. Since revenues are not likely to grow significantly, the cost of delivering this bandwidth has to decrease by a factor of 100. It said that somewhere around 60 percent or so of this cost decrease will come from Moore's Law and the increased density and performance of the chips. The rest of the savings will come from the flattening and simplification of these networks.

It also discussed the results of a service provider poll that it held with 900 respondents. Improving service quality is the number one factor over time. However, reducing cost and simplifying networks are expected to become the the number two and number three priorities, respectively, in three years.

Nokia Siemens also explained its decision to deemphasize GPON development. Its first reason is that the prospects for selling significant amounts of GPON over the next few years are not good. The market is sluggish and moving slower than expected. It also believes that VDSL is a very good alternative to GPON in the short run.

What Nokia Siemens does believe is that new technologies such as Hybrid PON and DWDM PON will start to appear in 2012 and will provide major improvements over PON. In addition to increased performance, these technologies will have the capacity to support unicast IPTV and to enable a significant network consolidation by eliminating the need for the current end offices.

There is a lot to what Nokia Siemens had to say. I think its PON strategy will be a good one if it can maintain its focus and be a leader in the introduction of these new technologies and if the GPON market does not heat up in the mean time.

Cisco IP Traffic Study Says Video Will Dominate

Cisco held a webinar yesterday to discuss its Visual Network Index that measures the degree to which video traffic of all types is contributing to IP networks. The details of this work can be found on its website. This work includes information gathered directly from major IP network providers. Cisco plans to provide quarterly updates to this analysis.

This work is worth following. It shows how much traffic Telco IPTV services will contribute to IP networks, especially in the metro areas. It also confirms the traffic assumptions that we used in our report Networking Strategies for TelcoTV Services,

Monday, July 28, 2008

Verizon FiOS TV Growth Slows in 2Q08

The growth in Verizon's FiOS TV IPTV service slowed in 2Q08. It ended the quarter with 1.382 million FiOS TV subscribers, up 176 thousand from 1Q08. This is the first time that the quarterly growth in FiOS TV subscribers was below 200 thousand since 2Q07. FiOS TV penetration was 19.7 percent at the end of the quarter. FiOS is available for sale to 7 million homes and passes 9.6 million homes.

The dip in FiOS TV growth reflected a dip in FiOS broadband subscribers, adding 187 thousand subscribers in 2Q08 giving a total of 1.974 million FiOS broadband subscribers. This is the first time that the quarterly growth in FiOS broadband subscribers was below 200 thousand since 1Q07. Verizon exceeded 2 million FiOS broadband subscribers in July 2008. FiOS penetration was 23.5 percent at the end of the quarter. Its FiOS ARPU is not more than $130. FiOS broadband is available for sail to 8.4 million homes and passes 11 million homes.

Verizon has made the following changes to its FiOS service recently:
  • It will launch FiOS in New York City
  • It offers a 50 Mbps downstream/20 Mbps upstream service to its entire FiOS footprint
  • It offers more than 100 HD channels
In spite of this slow down, Verizon is doing well with FiOS. I expect that its sales will pick up, especially in 4Q08.

Korea Telecom adds 139K IPTV Subscribers in 2Q08

Korea Telecom had 706,856 MegaTV IPTV subscribers at the end of 2Q08, an increase of 138, 618 during the quarter. Its MegaTV IPTV revenue was $9.6 million U.S., up from $5 million U.S. in 1Q08.

Korea Telecom continues to add IPTV subscribers to its MegaTV service at a good clip. It looks like it is generating about $5 per month per subscriber in revenue.

Sunday, July 27, 2008

Playing Field Leveled in India

The Indian government accepted the recommendation from TRAI that broadcast channels be provided to all video providers on a non-discriminatory basis. Up until now, the satellite video providers were able to acquire that broadcast content at a lower price than the IPTV providers. It will also permit a la carte pricing of broadcast channels on IPTV.Check Spelling

This should help the emerging IPTV services in India. There is a lot of activity there, but it is not clear how well the IPTV service is being accepted as yet.

Friday, July 25, 2008

Belgacom Adds 42K IPTV Subscribers in 2Q08`

Belgacom ended 2Q08 with 391,460 IPTV subscribers, an increase of 42,210 during the quarter. This compared to an increase of 43,931 in 1Q08. Its ARPU in 1H08 was 17.5 euros, up from 14.6 euros in 1H07. It stated that the increase in IPTV revenue has made a significant contribution toward offsetting its loss of voice revenue.

Belgacom continues strong IPTV growth. It is continuing to add more than 40 thousand new subscribers per quarter. It is achieving this success in a market that has been dominated by cable services.

EU Peer to Peeer Video Experiment

The EU has a 19 million euro project to test the peer to peer delivery of video content. It is looking for thousands of people to install and use the Swarmplayer that uses BitTorrent technology. SwarmPlayer uses peer to peer to distribute video rather than centralized services as is commonly used today. You can get it by clicking here. It is currently offer a BBC broadcast and a live view of Amsterdam.

It will be interesting to see the results. I have been skeptical of peer to peer technology for delivery of TV quality content. SD takes about 2 Mbps today using MPEG-4, which is much high than most upstreams. It will be necessary to draw from several peers concurrently to make this work.

I have always wondered why a broadband user would want to dedicate a significant amount of upstream bandwidth so that somebody else can watch a TV program. I suppose if it is spread across enough other users the load will become negligible, but this assumes a relatively light level of usage.

Thursday, July 24, 2008

Telia Sonera Adds 20K IPTV Subscribers

Telia Sonera ended 2Q08 with 427 thousand IPTV subscribers across all of its operations, an increase of 20 thousand during the quarter. The country by country results include:
  • Sweden ended the quarter with 320 thousand IPTV subscribers, an increase of 2 thousand.
  • Norway ended the quarter with 8 thousand IPTV subscribers, an increase of 4 thousand.
  • Lithuania ended the quarter with 35 thousand IPTV subscribers, an increase of 10 thousand.
  • Estonia ended the quarter with 64 thousand IPTV subscribers, an increase of 4 thousand.

Telia Sonera's growth continues to slow, especially in Sweden. This seems to be a reflection of the fact that it added only 11 thousand new broadband subscribers across all of its operations. Clearly it is selling IPTV primarily to its existing base of broadband subscribers.

Wednesday, July 23, 2008

ATT Adds 170K IPTV Subscribers in 2Q08

ATT ended 2Q08 with 549 thousand U-verse IPTV subscribers, adding 170 thousand during the quarter. This is an increase of 318 thousand since the end of 2007.

The U-verse service is now available to 11 million homes and has reached 10 percent penetration in established markets in less than 12 months. ATT said that it is on track to reach one million IPTV subscribers by the end of 2008. It has reduced its average installation time by 15 percent since 4Q07.

ATT plans to have a second HD stream to all U-verse subscribers in 3Q08. It has Microsoft's whole home DVR feature in trial and expects to roll it out before the end of 2008.

If ATT maintains its current rate of growth for U-verse, it will have no trouble reaching one million IPTV subscribers by the end of 2008. The U.S. cable companies will have to start taking notice of ATT as they have with Verizon.

KPN Adds 83K Digital TV Subscribers in 2Q08

KPN ended 2Q08 with 636 thousand Digital TV subscribers at the end of 2Q08, and increase 83 thousand. These Digital TV subscribers includes both DVB-T digital terrestrial and IPTV subscribers. The company did not announce the size of its IPTV subscriber base. This gave KPN a 9 percent share of the Digital TV market in The Netherlands, an increase of one percent in the quarter.

KPN's Digital TV ARPU increased to 7 euros, up one euro during 2Q08. It dropped its charges for both its Digital TV services by 50 percent in 2007. It currently charges 5.84 euros per month for its DVB-T service and 8.36 euros per month for its IPTV service.

I believe that the KPN's IPTV service has only a small portion of these Digital TV subscribers. As usual, I take the fact that IPTV subscriber count was not announced as a sign the the number is small.

Tuesday, July 22, 2008

KDDI Adds 206K FTTH Subscribers in 2Q08

KDDI announced that it hadd 916 thousand FTTH subscribes at the end of June 2008, an increase of 206 thousand. It is maintaining its estimate that it will have 1.14 million FTTH subscribers by the end of March 2009. Its FTTH ARPU dropped to $43 in U.S. dollars compared to $45 at the end of March 2008.

KDDI is already half way to its goal for the fiscal year at the end of the first quarter. It appears that this goal bill be easy for KDDI to achieve.

Sunday, July 20, 2008

UTStarcom Pioneering Metro IPTV Video Surveillance

I spoke with UTStarcom about its Safe-City video surveillance project in Benxi, China with China Netcom. UTStarcom's IPTV video system to receive video surveillance from about 1,000 cameras. It developed a backend that provides the ability to record the videos from all of these cameras in real time. This is like recording 1,000 TV channels at one time onto video on demand servers for an NPVR IPTV service.

UTStarcom said that its systems brings the advantages of digital technology such as higher image quality and lower costs to the surveillance application, which is generally implemented using analog technology today.

UTStarcom also said that this approach can give much more flexibility in viewing the recorded content. Its IPTV video system provides the ability to view surveillance videos over any broadband connection or even over mobile devices using Mobile TV technology.

It will be interesting to see if IPTV technology becomes broadly deployed in surveillance applications. I guess that there is a lot of additional work to get a system like this to scale up to 100 thousand or a million cameras. I would also think that archival storage of these videos will also be a real challenge, especially on a very large system.

UTStarcom Sees High On Demand Usage

UTStarcom is seeing on average that 60 percent of the IPTV viewing in its Shanghai deployment uses unicast video on demand content. It expects that this percentage will grow next month due the availability of on demand viewing of all of the events at the Beijing Olympics.

The network it has deployed in Shanghai supports both multicast and unicast, but there are some areas where only unicast is available. There are areas that are served only by an ATM network that is not well suited to multicast. Shanghai Telecom often does not deploy IPTV services in these areas, but when it does, it will provide both broadcast as well as on demand content using unicast. There is no problem offering multicast IPTV in areas served by an IP netowrk.

UTStarcom acknowledges that the extensive use of unicast will generate a significant load on the metro aggregation network. It stated that this has not been a problem as yet.

Shanghai is the largest IPTV that I have found with such high usage of unicast on demand IPTV services. My guess is that the traffic loads that this service has generated have not been a significant problem yet because the percentage of broadband subscribers using IPTV services is still quite low. I believe things will change as IPTV penetration grows.

Friday, July 18, 2008

Nokia Siemens Gives Up on GPON

Nokia Siemens announced that it will limit its investment in GPON because it does not expect mass market rollout of FTTH in the short term. Instead, Nokia Siemens will focus on ADSL-2+ and VDSL along with the development of next generation PON technology.

These next generation technologies include DWDM PON that can significantly expand the capacity of each fiber along with Hybrid PON that can extend the range of PON loops and facilitate the deployment of non-blocking IPTV aggregation/access networks.

DWDM PON will be enable the deployment of much higher speed PON services to each home and business. This will enable PON to meet future bandwidth requirements and extend PON into a broad set of business and enterprise applications.

Hybrid PON will permit the OLTs to be collocated in IPTV regional video headends, for example and create a network of dedicated connections to each subscriber. This will provide non-blocking access to each subscriber for unicast, on demand content. A 100 percent unicast service, such as this, will be required to support network PVR and interactive advertising applications.

This is a risky bet. If Nokia Siemens can beat it its competition to these new PON technology, it should be a winning bet. On the other hand, it will be hard for the company to maintain a strong focus on PON when it is not actively participating in the market.

New Ruckus 802.11n Product Test

Light Reading published an article that describes is test of a new Ruckus 802.11n wireless system. It used AT&T's U-verse as part of the test. The stress consisted of watching an HD stream while recording two other HD streams. Light Reading said that the new Ruckus system experienced no problems with this scenario.

The Telcos have been waiting for a wireless system that is robust enough to handle IPTV. According to this test, 802.11n, at least with the Ruckus enhancements, can do it.

Thursday, July 17, 2008

Deutsche Telekom Selects Three IPTV Finalists

Deutsche Telekom has winnowed its 10 semifinalists in its IPTV applications contest down to three finalists:
  • An Instant Information System that combines interactive TV and Internet media so that it can be accessed and retrieved at any time and place without a break in either media or entertainment.
  • The user can share with family members relevant content such as news, photos and videos across media – Internet, TV and the mobile – and update a joint calendar.
  • Viewers “meet” friends and acquaintances, share content and make new contacts. Via feeds shared interests are discovered and new interests are stimulated. Viewers form communities and communities extend their network.
Each of the finalists received an additional 100 thousand euros.

Deutsche Telekom will have an event on August 29, 2008 during IFA where it will present the concepts and product developments of the three finalists live. It is taking reservations for the meeting until August 25, 2008 at the following email (please include the number of people attending):

This contest is proceeding. It will be interesting to see who the winner will be. It will be even more interesting to see how successful the winning application will be compared to the better losers.

Tuesday, July 15, 2008

Netflix to Make Videos Available to the Microsoft Xbox 360

Netflix will make a library of more than 10 thousand movies and TV episodes available when it launches on Xbox Live toward the end of 2008. This is an extension of the Netflix Live service that provides the ability to watch videos on a PC today. The Xbox Live service will provide the ability to watch the Netflix videos on TVs.

This is an interesting announcement because it brings over the top Internet TV to the TV set rather than the PC. I think that this is where commercial video content needs to go to really capture a significance audience.

The key will be the quality of experience. It is likely that most U.S. broadband users will get a good SD experience on their TV but will not be able to stream HD. This will show up the bandwidth limitations of most U.S. broadband services.

BT's FTTH Plans

BT announced a $3B plan to deploy FTTH services to as many as 10 million homes by 2012. Ir plans to offer speeds up to 100 Mbps.

It stated that a supportive regulatory environment is essential for this program to take place. This would include removing current barriers to investment and making sure that any company investing in fiber can earn a fair rate of return.

BT also stated that it is committed to wholesaling its new services. It will press for any other next generation access network in the UK to be open to all companies as well.

This is a necessary move by BT. HD is becoming a major competitive issue for TV services in the UK. It will be interesting to see how much of a problem the regulatory issues become.

Friday, July 11, 2008

Ofcom Says 68% of UK TVs Are Connected to Digital Services

Ofcom, the UK regulator, published and article that stated that 68 percent of the 60 million TVs in teh UK are connected to digital services. The full study is also available on its website.
  • There are over 10 million households with 23 million TVs using the Freeview digital terrestrial service.
  • Sky has 8.3 million subscribers to its satellite service
  • Virgin Media has 3.5 million subscribers to its cable services
The article and full study are worth reviewing. The study identified 50 thousand IPTV subscribers, which are likely to be Tiscali subscribers. The 214 thousand BT Vision customers are include in the Freeview numbers since they receive their broadcast content using Freeview.

Thursday, July 10, 2008

Telco IPTV Barred in Argentina

An article in TV Telco Latam said that a ban has been upheld in Argentina that bans Telcos from offering cable services for the next 99 years. This was a ruling on the appeal of a ruling that banned Telcos from IPTV in Argentina in September 2007.

This kind of regulatory issue is common in Latin America and Asia, where there is a strong movement to protect the the cable companies from the Telcos. It could take years for these regulatory impediments to disappear.

Wednesday, July 9, 2008

Nielson TV Viewing Numbers

Light Reading has published an article giving the results of the latest Nielson study of TV viewing in the U.S. Interesting conclusions from these numbers include:
  • About 55 percent of Internet users watch videos over the Internet
  • About 22 percent of TV viewers are using DVRs and is growing strongly
  • The number of mobile TV viewers is about 2 percent of the number of TV users
  • Average time spent watching Internet videos is only about 2 percent of the time watching TV
  • Mobile TV users watch it only about 3 percent of the time spent watching TV, however more than 3 hours a month is significant for such a small screen.
It is worth looking at the tables in the Light Reading article. While Internet video is getting a lot of attention, most people just do not watch it very much. Mobile TV has not caught on yet but appears to watched on a regular but casual basis.

Thursday, July 3, 2008

Free to Acqure Alice France

Variety has reported that Free in France will acquire Telecom Italia's Alice broadband provider. It has arranged a loan for $1.6 billion for this deal. Alice new has 850 thousand broadband subscribers. This will be a merger of the number three and four broadband providers in France and will put the combination into the number two position. France Telecom is number one and Neuf Cegetel will be pushed from number two to number three.

This is a good move for Free in response to the series of mergers that Neuf put together over the last few years that added Cegetel and Deutesche Telekom's Club Internet.

Wednesday, July 2, 2008

Symmetricom Video Nightmares

Symmetricom has put up a short video that demonstrate 10 common digital video quality problems.

It is worth viewing and the commercial at the end is not intrusive. I have experienced all of these problems using over the air digital.

Brasil Telecom's FTTH IPTV Strategy

TV Telco Latam published and article describing Brasil Telecom's plans to deploy FTTH to support IPTV services in six cities before the end of 2008. It will focus its FTTP deployment on the most prosperous neighborhoods.

The company currently offers IPTV over ADSL-2+. This service is not profitable today because regulation restricts it to video on demand service. It expects that new legislation will lift this restriction.

Brasil Telecom is following the example of other developing countries and moving directly to FTTH access networks. However, IPTV will not be a financially viable service in Brazil until it can offer broadcast content as well as video on demand.

Tuesday, July 1, 2008

Espial Agrees to Acquire Kasenna

Espial agreed to acquire Kasenna. Espial is based in Ottawa, Canada and provides IPTV middleware and applications software. Kasenna is California based and provides video on demand systems as well as its own middleware software. The transaction is expected to close about July 9, 2008.

Espial has been working to move up the chain and become a prominent IPTV systems provider. Kasenna was an SGI spin off that has been providing video on demand systems for many years. While this acquisition will increase Espial's presence in the IPTV market, it still has a lot of work to do. Kasenna does have good market presence, other companies have more momentum now.

OKI Introduces Audience Rating System

Oki Electric announced its Audience Rating Information System for IPTV for the Japanese market, which collects viewership data. This system will enable service providers, with the authorization of the viewers, to obtain information about when and which channel and programs are watched.

The system will collect the viewership data in the form of an audience rating library on the user's device, which will then be encrypted, sent to and registered in the database server at the IPTV distribution center. This information will then be printed out as viewership reports which service providers can offer to program producers.

The audience rating library can be embedded in the set-top-boxes or in the TV with an integrated set-top box. Those who have STBs or TVs without the embedded library can connect a home gateway that has the audience rating library to collect viewership data. This system has been tested in IPTV applications that utilize mutli-casting. OKI will add the system to its product lines that includes the OKI MediaServer, the video distribution server for IPTV, plus home gateways and set-top-boxes.

Oki is one of the video on demand suppliers to NTT's IPTV services. Privacy is becoming a large issue with these systems as consumers come to understand what they are and how they are being deployed.