Cable Channels Object to a la Carte Programming

Light Reading published an article describing the reaction of the major U.S. cable networks to the FCC Chairman's proposal for a la carte programming that operators should be allowed to strip from expanded basic tier any network that required a monthly carriage fee of 75 cents per. The position of the cable networks is that this will raise the cost to the subscriber and, consequently, hurt consumers.

Both the FCC and the cable networks should take a good look at Manitoba Telecom's (MTS) IPTV content strategy. It breaks the premium channels down into small groups of three to five channels. Each subscriber decides which set of groups that they want to receive. MTS's has found that its customers really like its approach. They spend the same as they do with more structured offerings, but they get a much more useful set of channels for their money.

Manitoba Telecom Adopts Alcatel-Lucent and Microsoft

Manitoba Telecom (MTS) will switch to Alcatel-Lucent access systems and Microsoft software for its IPTV software system. MTS has over 75 thousand IPTV subscribers for its service that has been in operation for the last five years.

The MTS IPTV system was based originally based on Motorola VDSL access systems that it stopped actively marketing two years ago. MTS is also using Seachange video on demand systems and Widevine content security systems.

MTS plans to deploy the Alcatel-Lucent/Microsoft system on a limited basis in 2008.

It has been clear that MTS would change its strategy since Motorola ceased actively marketing its original VDSL systems two years ago. Its selection of Microsoft is a vote of confidence for Microsoft. MTS clearly understands the issues involved in offering IPTV systems and has decided that Microsoft can meet its needs.

Manitoba Telecom at 75K IPTV Subscribers

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

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

Manitoba Telecom Sees Good Growth

Manitoba Telecom reported that the number of IPTV subscribers that it serves grew to 66,093 at the end of 2006 from 51,561 at the end of 2005, which is 28 percent growth over the year. Its IPTV revenue grew to $32.2 million Canadian ($27.7 million U.S.) in 2006 from $22.9 million Canadian ( $19.7 million U.S.). Its IPTV ARPU was flat at $46 ($40 U.S.) Canadian in 2006 and $45 Canadian ($39 U.S.) in 2005.

Manitoba Telecom offers this service in Winnipeg, the capital of Manitoba, using VDSL systems from Motorola. Its IPTV coverage in Winnipeg grew to 96.3 percent in 2006 to 91.1 percent in 2005. Its market penetration grew to 26.6 percent in 2006 compared to 21.7 percent in 2005.

Manitoba Telecom continues solid growth with its IPTV service. It does demonstrate that a telco VDSL IPTV service can achieve 25 percent penetration, which is good news for AT&T. Of course, Manitoba introduced this service in 2003 before Shaw, its cable competitor, introduced VoIP and a triple play offering. AT&T is facing much stiffer competition introducing IPTV this year.