Wednesday, June 20, 2007

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.

Monday, June 18, 2007

Microsoft Rebrands IPTV

Microsoft introduced a new version of its IPTV system and changed its name to Mediaroom. The new version includes digital terrestrial support (required by BT Vision) along with:
  • Personal media sharing to easily listen to digital music and view digital photographs stored on PCs elsewhere in the home on the TV.
  • Multimedia Application Environment provides support for web services and applications, such as video-on-demand portals, casual games and interactive TV services.
  • Enhanced MultiView capabilities to see multiple channels, programs and camera angles on one screen

These are nice additions but none of them is groundbreaking. Microsoft's problem is to show that it can scale and support large numbers of subscribers. It appears to be doing well at Swisscom. ATT, BT, and Deutsche Telekom are its proof cases.

Sunday, June 17, 2007

ECI Takeover in the Works

Israel based ECI Telecom is holding talks with an investment firm about tale of the company's stock for $1.2 billion. Major shareholders in ECI apparently would like to divest their holdings. These discussions apparently have not reached a definitive stage.

ECI has done very well in the access business and particularly in supporting IPTV services. Nearly all of the IPTV subscribers in France Telecom are served by ECI systems. About 40 percent of the VDSL lines being installed by Deutsche Telekom are served by ECI systems.

The broadband market is reaching a point of saturation and it is likely that telco spending on broadband equipment is starting to decline. This will make a very competitive market even more so. This puts a smaller company competing with Huawei and giants such as Alcatel-Lucent, Ericsson, and Nokia Siemens in a very tough position. It is not surprising that its current investors would like to find a way out.

Cisco Introduces Cable PON

Cisco's Scientific Atlanta unit is introducing what it is calling D-PON, which is a PON based FTTP system that fits into existing cable HFC networks. D-PON will enable providers to provide an alternative to the telco G-PON FTTP offerings for greenfield application from Verizon and ATT. This system will be available in the fourth quarter of 2007.

Motorola has offered a similar PON based system for cable companies, so the two main U.S. cable architectures will support PON FTTP access. This is another of the growing numbers of arrows that the cable companies can add to their quiver to counter the IPTV offerings from Verizon and ATT.

Friday, June 15, 2007

ATT Selects GPON Vendors

ATT has selected Alcatel-Lucent and Ericsson to supply GPON systems for its U-verse IPTV service. The company plans to use GPON in new greenfield builds starting in 2008. It will use VDSL FTTN systems where it is over building its current network.

Deploying fiber is about the same cost as copper in a new build. Operation and maintenance costs are significantly lower, so choosing fiber for new builds makes a lot of sense. However, given the slow rate of the U-verse rollout, I do not expect to see the company roll out GPON at a high rate.

Light Reading/Cisco IPTV Scaling Test

Light Reading published an article that describes the results of an IPTV network scaling test that shows that a Cisco network can scale to support one million IPTV subscribers with QoS and resilience.

Light Reading asked the European Advanced Networking Test Center AG (EANTC) to run an end-to-end IPTV test on Cisco equipment. Cisco passed, showing its gear can handle a 60,000-user POP and, by extrapolation, a 1 million-subscriber IPTV service. It also demonstrated features such as Call Admissions Control (CAC) and Video Quality Experience (VQE).

EANTC simulated various failures and fiber breaks, and Cisco's routers managed to restore TV service in 625 milliseconds, worst case. And in QOS tests, Cisco correctly prevented the TV streams from getting disrupted when other types of traffic threatened to clog the network.

These results are interesting, but not surprising. There is little question that Cisco's routers can support IPTV networks.

The more interesting question is if this is the best architecture for IPTV. Our recent report Networking Strategies for TelcoTV Services comes to the conclusion that IPTV traffic does not fit a Layer 3 IP network well and that a Layer 1 optical network will provide a higher level of service at a lower cost. The issue is how to handle the on demand unicast traffic that everybody expects to dominate these networks. We are offering a free white paper on this subject.

ATT Micro Marketing for IPTV

ATT is using ice cream trucks to sell its IPTV service in Connecticut. The truck goes to Little League fields, train stations and suburban cul-de-sacs. With music playing, the truck stops and a door opens on the side to reveal a flat-screen TV showing programming from U-verse, ATT's IPTV service. It is like a magnet, people come running when the music from the ice cream truck is played.

ATT is using a variety of small-time selling strategies, such as wine-and-cheese parties, movie nights in local theaters along with the ice cream truck to sell its IPTV service one neighborhood at a time.

AT&T's U-verse service is not available in entire communities much less than the entire state. The company has to find ways to target the people that can actually buy the service. To demonstrate the differences among U-verse service and cable or satellite TV, ATT has to show it to people. Many of the selling points are based on features, from the on-screen menu to the speed of channel changes.

SureWest in the Sacramento California area has used a similar retail marketing approach. When it introduces its FTTH IPTV service into a new neighborhood, it cruises the neighborhood with a big sign on a trailer that it calls its "land blimp". It then blankets the neighborhood with door to door sales people. This approach has been successful. Surewest has consistently had about a 25 percent market share in the areas where it offers its fiber service.

This marketing approach shows what ATT is facing with its highly fragmented U-verse IPTV introduction. The coverage is not sufficient to support mass marketing techniques even on a local basis.