Motorola Launches IPTV Store Front

Motorola introduce an IPTV store front system for Microsoft's Mediaroom. Its Storefront 1.0 software enable to offer IPTV and Internet services along with physical goods. The system could support the sale of a video on film, the DVD of the same film, and ring tones associated with the movie.

This is the kind of capability that IPTV providers need to distinguish their services. The more these services become integrated with the Internet, the better.

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.

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.

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.

China Telecom Selects Vendores

China Telecom announced the companies that its provincial operators should use for their IPTV services. For systems contracts, ZTE , UTStarcom, and Alcatel-Lucent were chosen.

For standard-definition set-top boxes ZTE, UTStarcom, Coship, Motorola, Huawei, Postcom, Sunniwell, Alcatel-Lucent, Yuxing, 30 Kaitian and Changhong. The provincial operators should give preference to these companies in the order that they are listed.

For high-definition set-top boxes ZTE, UTStarcom, Alcatel-Lucent, Postcom and Changhong.

The prices for terminal equipment have been set and the provincial operators are not allowed to renegotiate prices.

This should clear the way for China Telecom's provincial operators to ramp up their IPTV efforts. This is likely to significantly accelerate the IPTV services in China, which has basically been limited to the Shanghai area until now.

Corbina in Russia Goes with Microsoft

VimpelCom in Russia has signed an agreement to use Microsoft's Mediaroom IPTV software for its Corbina TV IPTV service. The service will also use Motorola set-top boxes with or without a 160 GB hard disk. The service will support both SD and HD programming and will be launched in the middle of 2008. It will have 100 broadcast channels and 1,000 films, cartoons, and series available on demand. Corbina provides fiber based services to almost every apartment building in Moscow and many other cities in Russia.

This is another strong win for Microsoft. The Russian market is becoming a strong telecom market and it looks like IPTV will do well there.

Pace Wins BT Order

Pace has won a significant order for set-top boxes from BT for its BT Vision service. Pace recently acquired the IPTV set-top box business from Philips, which has supplied set-top boxes for BT Vision since it started in December 2006. BT also signed a contract for IPTV set-top boxes with Motorola in January 2008.

This is an important piece of business for Pace and a major reason why it acquired the Philips IPTV set-top box business. It is quite natural that BT would bring Motorola in as a second vendor for a service as large as BT Vision is likely to become.

ZTE IPTV System

I was at the ZTE analyst meeting in Shenzhen, China on March 25 and 26. ZTE was quite serious about its telco IPTV system. It offers an open system that combines ZTE and third party components, including:

• Headends from Tut Systems (now part of Motorola), Optibase, Tandberg TV, envivio, and Thomson
• Video On Demand Servers from ZTE
• Middleware from ZTE
• Content Security from ZTE, Irdeto and Verimatrix
• Set-top boxes from ZTE, Sunniwell, and Yuxing

ZTE stated that its systems are in more than 20 deployments and trials and are currently supporting one million telco IPTV subscribers, including

• China (with 50 percent market share according to ZTE's numbers)
• Free Internet, Thailand
• VNPT Vietnam
• Belorussian Telecom
• Progroup, Estonia
• STC, Saudi Arabia
• Emcali, Columbia
• CanTV, Venezuela

ZTE's basic business strategy is to focus on developing countries, especially China and India. This is a good strategy, since this is where the new opportunities are coming from.

BT to use Motorola Set-top Boxes

BT has stated that Motorola will be the lead set-top box vendor for its BT Vision IPTV service. BT stated that Motorola's experience working with the Microsoft Mediaroom software that supports BT Vision. (Motorola was the lead set-top box vendor in 2007 at both AT&T and Deutsche Telekom, both of which also use Mediaroom.)

This is another significant set-top box win for Motorola, which further cements the number one position that we stated that it enjoys in our Opportunities in TelcoTV report that we published a few months ago.

Motorola Introduces RF FTTH Option

Motorola will introduce a new alternative for cable companies that want to offer services using FTTH technology. Called RF Over Glass (RFoG), this technology transports an RF cable signal to each home using a fiber connection. An NIU at each home converts the optical signal to a signal that can be transmitted over the coax network in the home. RFoG provides standard cable video, data, and telephony services in the home.

This is a separate development from its Cable PON products that have been discussed earlier in this blog. Cable PON can provide and RF signal over the fiber for the broadcast video channels, but uses 2.4 Mbps in the case of GPON to support data, VoIP, and video on demand services.

RFoG does not improve the performance of an HFC cable network. It is still limited to the 850 MHz to 1 GHz of spectrum that is available today. Consequently, this approach does not provide any advantage for cable compared to a telco FTTH service.

Motorola is introducing RFoG and Cable PON as alternative architectures to respond to the requests from new housing developments for fiber connections. Developers find that they can command a premium up to $10,000 for new fiber connected homes. Verizon and ATT are both offering GPON FTTH services for these greenfield developments.

Cable companies can compete head on with the telcos using Motorola's Cable PON products. Some cable companies would like to stay close to their existing architecture and are interested in the RFoG approach and believe that their existing networks provide sufficient performance to be competitive. Motorola stated that it is looking at ways to facilitate the evolution of an RFoG network to a Cable PON network so that cable companies initially selecting an RFoG approach can move to Cable PON as performance requirements increase. Motorola will start delivering RFoG in 2H08 for trials and initial deployments.

It looks like Motorola has the cable companies covered with both GPON and RFoG technologies. Personally, I think there will be increasing resistance to RFoG as people realize that they are not getting any additional performance with their $10,000 fiber connections.

Motorola Facilitating MPEG-4

I went to a small Motorola briefing on Friday with three other analysts to hear a presentation on systems that Motorola has just announced that facilitate the delivery of content from the broadcasters to cable, satellite, and TelcoTV service providers.

This is a real advantages to the TelcoTV service providers that deliver their content using MPEG-4. It eliminates the need to transcode from MPEG-2 to MPEG-4 that exists for these service providers today. Motorola has introduced the DSR-4410MD that takes the MPEG-4 content from the satellite, decrypts it, and then passes it on so that it can be transmitted to the subscribers in the same MPEG-4 format.

The satellite companies have already started the move toward MPEG-4 in order to increase their capacity for HD channels. This has enabled the satellite companies to offer more HD channels than their cable competitors. The satellite companies can basically take the same approach as the TelcoTV service providers.

It turns out that there are substantial advantages for the cable companies as well. The industry is moving to a new modulation scheme called DVB-S2 that increases the bandwidth of a satellite channel from 40 Mbps to 77 Mbps. The current 40 Mbps satellite channel with MPEG-2 compression supports 10 SD TV channels. The new 77 Mbps satellite channel with MPEG-4 compression supports 9 HD TV channels, which permits the cable companies to switch from SD to HD with nearly the same TV channel capacity.

Motorola just announced the DSR-6000 transcoders that will take the MPEG-4 SD or HD from the satellite and transcode it to MPEG-2. It is capable of producing both MPEG-2 SD and HD streams from an MPEG-4 HD stream off of the satellite. This eliminates the need to transmit both SD and HD versions of the same TV channel across the satellite. The cost of these systems is about the same as those that the cable companies are buying today.

Motorola gave us a demonstration with half the screen being displayed with MPEG-2 HD content and the other half with HD content transcoded from MPEG-4. I could not see any difference between the two sides of the screens nor could I find any evidence of a discontinuity at the dividing line between the two halves of the screen.

This appears to be an important development that will facilitate the transformation of TV to HD. It also simplifies the delivery of TelcoTV services.

Motorola Shipped 2 Million IPTV Set-top Boxes

Motorola announced that it has shipped 2 million IPTV set-top boxes and has shipped 1 million in the last five months. The 2 millionth unit was shipped as part of an order for 150 thousand set-top boxes to Telia Sonera in Sweden.

Motorola is the leading IPTV set-top box company based on its own products as well as the products that it acquired with Kreatel in 2006.

Starz Goes MPEG-4

Starz Entertainment will use Motorola encoders to distribute its content using MPEG-4 AVC.

This is another step in the trend for the content producers to do the MPEG-4 AVC encoding themselves, thus eliminating the need for IPTV service providers to transcode from MPEG-2 to MPEG-4.

Verizon Issues $1B IPTV RFP

An article in Light Reading says that Verizon has issued an RFP for set-top boxes and a content protection/digital rights management system for its FiOS TV IPTV service.

Verizon is using Motorola set-top boxes today. Verizon uses an RF feed for its broadcast channels. This requires that the set-top box be a hybrid IPTV/RF cable-like set-top box.

I am currently working on an IPTV forecast that will be released in August. This forecast will show the opportunity for five IPTV product categories that include set-top boxes, content protection/digital rights management systems, access systems, video on demand systems, and middleware software.

The preliminary result from this analysis shows that Verizon will spend well over $1 billion for set-top boxes between 2008 and 2012 and over $50 million for content protection/digital rights management.

Motorola is certainly in a good position to get a piece of this business. I expect that Verizon will select at least one other set-top box manufacturer to keep inject competition. Verizon has three PON vendors today - Tellabs, Motorola, and Alcatel-Lucent.

Verizon started off with the Microsoft cable middleware. It has now taken over the further development of its middleware. I consider Verizon's middleware to be an in house development today.

I believe that Verizon started using Microsoft's content protection/digital rights management system and will replace it as part of this RFP. I believe that Verizon will select a single system. This is a real plum for the content protection/digital rights management system company that wins.

Motorola Introduces Open Set-Top Box

Motorola has made the Kreatel KreaTV software platform available on its own set-top boxes. This platform makes these devices with the range of middleware systems that Kreatel supports with its own boxes. Up until now, the Motorola set-tops have supported only the Microsoft Mediaroom software for ATT.

This opens the European and Asian markets to the new Motorola set-top boxes. It also gives its current customers the ability to transition to other middleware systems without changing set-top boxes.

Motorola's Cable PON

Motorola introduced PON for cable networks at NCTA last week. I could not understand what it is from the press release, so I just finished a briefing with them.

Motorola is integrating its PON systems into its cable network architecture. PON can carry a cable RF signal to the subscriber and deliver it to a cable set-top box. This makes it straightforward to integrate PON into a cable video service.

The PON provides a data service that is as good or better than the DOCSIS service but is not exactly the same. This means that the cable company will find it easy to support the PON data service in a green field where there is no cable modem service or to support business services. This is more of a problem in an overbuild where both data services will coexist. Motorola is working to address these issues.

Motorola stated that the key to this approach is the back office integration. Motorola has made it possible for the cable company to manage the PON with the same systems that it uses to manage the cable system.

Motorola has found strong interest in PON from the cable companies in North America and Europe. It will start serious discussions with Asian cable companies later this month. Cable companies are interested in PON as a way to support FTTP. This is becoming important to cable companies that are getting telco fiber competition from companies such as Verizon in the U.S.

Motorola's cable PON system is another technology that cable can use to counter the growing threat of TelcoTV services. It will help cable companies facing telco fiber to the home competition in particular. I expect that this will be a strong market for Motorola on a global basis.

Motorola to Acquire Modulus Video

Motorola has agreed to acquire Modulus Video, a privately held company focusing on MPEG-4 AVC encoding systems. The terms of the agreement have not been announced.


I have heard that Modulus has sold MPEG 4 encoders to ATT in the U.S. and Telefonica in Spain. This acquisition will beef up Motorola's ability to support MPEG-4 services.

Switched Digital does not threaten TelcoTV

I spoke with Mot0rola t0day about their switched digital offering. Switched digital uses the same multicast techniques that TelcoTV users for channel selection for cable digital services. The way it works is that the set-top box sends a channel switch request to the headend when the subscriber requests a new channel. The headend then selects an unused digital slot and uses it to bring the requested channel to the subscriber or ties into the slot that is already being used to bring that channel to other viewers.

This frees up digital channels carrying unwatched channels and increases the number of channels that the cable company can provide. Rather than being limited to the number of slots, an indefinite number of channels can be provided, similar to a TelcoTV service. Only the channels watched will take up actual slots on the cable.

Cable companies are starting to deploy this technology. They will have to decrease the number of homes that they service with a fiber to coax converter called an optical networking unit (ONU). That number varies today but is typical around 500 homes. In order to eliminate blocking, cable companies will have to decrease this to somewhere around 100 homes per ONU.

You can get more information on Motorola's approach to switched digital at

http://broadband.motorola.com/business/switcheddigitalvideo/index.html

Switched digital helps the cable companies by making better use of the spectrum on its plant. This will help the cable companies to provide more broadcast channels, support more video on demand viewers, and support new DOCSIS 3.0 cable modem services.

Switched digital will be available to only the approximately half of the cable subscribers in the U.S. that subscribe to digital services. It will not be available to the other half that subscribe to only analog services.

The analog cable subscribers will be the most liable to switch to TelcoTV services. Switched digital does not do anything to protect this part of the cable subscriber base.These analog customers will be just as likely to switch to TelcoTV services before switched digital services are introduced as after.

What switched digital will do is make cable digital services more competitive with TelcoTV services. Adding switched digital services will protect this digital cable subscriber base as well as free up spectrum. Of course, the cable companies recognize this and have been migrating analog customers to digital at a steady rate.

Motorola to acquire Terayon

Motorola will acquire advanced advertising system company Terayon for $140 million.

This is the latest of a series of acquisitions that Motorola is making to improve its position in both the cable and TelcoTV markets. Advanced advertising is an important emerging area that will become increasingly important.

Motorola ECI Partnership

Motorola has formed a partnership with ECI that gives it the ability to offer ECI's access systems globally. The initial focus of the agreement will be on the U.S. market, but the agreement permits Motoroa to market ECI IP DSLAM access equipment globally except for countries where ECI already has strong market presence.

ECI has a strong set of IP access system products that support ADSL, ADSL-2+, and VDSL in both central office and remote locations. The ECI products complement Motorola's current set of PON FTTP systems. ECI's systems support a large portion of the broadband and IPTV subscribers at France Telecom and Deutsche Telekom. Motorola is one of two PON FTTP suppliers to Verizon's FiOS service.

Motorola has a large share of the North American IPTV access market through its acquisition of Next Level. A large portion of the Canadian telcos and the small U.S. telcos that have IPTV services use Motorola/Next Level systems. These Next Level systems are ATM based and many of these telcos are looking for a way to upgrade them to an IP DSLAM.

While Motorola's primary focus for its access systems has been North America, it has recently started marketing its access systems internationally. It has found that cable companies interested in FTTP architectures and some telcos are showing interest. Motorola already has a strong relationship with many cable companies outside of the U.S.

This partnership makes good sense for both companies. Motorola needs a way to retain its Next Level customers, otherwise they will go other vendors. ECI has never achieved much success in North America even though it has a strong product line. The two companies should do well by focusing initially on Motorola's current customer base.