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.

Sun Gets Big Order from ATT

Sun Microsystems received an order from ATT for servers and storage arrays to support the video on demand part of ATT's U-verse IPTV service. This is not an order for the Sun Streaming video on demand system but is an order for servers that support the Microsoft Mediaroom software from Microsoft.

I contacted Sun to verify that this is an order for servers to support the Microsoft Mediaroom software. I would not be surprised if Sun will make more money supporting the Microsoft Mediaroom at ATT than if ATT adopted the Sun Streaming system.

MTNL Launches Fiber IPTV in Delhi

MTN and its IPTV franchisee Aksh Optifibre launched anIPTV service in Delhi. All MTNL broadband subscribers will be able to register for the IPTV service. The two c0mpanies deployed the service in about 200 homes in New Delhi in 2006..

This service will cost 90 rupees ($2.25) per month plus premium pay channels based. Viewers will be able to subscribe to the pay channels listed on the TV itself and start watching them immediately.

The service will include a Time-shift TV service that will allow viewers to rewind a live broadcast channel and to catch a program that has been broadcast in the previous week.

Advertisers will be able to upload full length campaigns, product videos, and detailed trailers, without the limitation to a 10, 20, or 30 second format.
An ecommerce facility will launched soon that will allow users to items shown on infomercials and pay for it using the television remote and have it delivered to their homes.

A video on demand service will also be available with over 100 movie titles in Hindi and English. Plays and serialized TV programs in Hindi, Punjabi, Marathi and Bangla will also be in the library. Additional titles will be added every week. In addition services such as booking of movie tickets with the television remote, video calling, music on demand, online chats, and virtual classrooms -are expected to be added to the service.

Based on an open platform, this service will also allow creation of third-party applications that can be offered through the system - from placing orders for cakes and flowers to trading of stocks while watching a business news broadcast channel and telemedicine for which the remote center only needs an MTNL line and a television set.

India promises to be a very strong IPTV market in time. It will have to substantially increase its broadband infrastructure first, of course.

What is interesting is the amount of innovation that is going into this service. MTNL is starting to deploy services that are only being talked about in North America and Europe. It will be interesting to see how this service develops.

Dreampark's IPTV Elder Care

Swedish middleware company Dreampark has implemented an IPTV two way video application that connects 20 people in a senior citizen apartment complex in Southern Sweden with a nearby health clinic.

These 20 trial participants have special set top boxes for and can set up a video call with Nurse the staff on call at the clinic using a standard remote control and a web cam. Patients can see both themselves and the care providers on screen as they speak, and the camera can be zoomed in to give more detailed explanations of a patent's condition. The trail participant connects to the clinic by tuning into a specific channel.

Both the clinic and the trial participants expect that this video link will provide more timely and more efficient care for minor concerns.

This is the kind of application that IPTV service providers need to offer to really differentiate their services. People will pay for this kind of service assuming that it proves of value to the patients and the medical facilities.

Korea Telecom Starting IPTV

An STMicro press release said that Korea Telecom has just launched its IPTV service. The service provides over 1,200 on demand videos and 27 interactive services, ranging from education to finance to instant messaging. An electronic program guide and user-created content are also available. Other KT IPTV services include: digital photos and personalized stock; plus weather and sports information.

It is interesting that there was no mention of broadcast services. I am making some inquiries to find out more about what KT is doing. I will let you know when I learn more.

ECI Buyout

ECI has approved its acquisition by a group of investment companies that includes Swarth Investments and Ashmore Investment Management for $1.2 billion. ECI expects this deal to close by the end of 2007.

ECI has done well using IPTV to maintain and improve its position with major carriers such as France Telecom and Deutsche Telekom. It now has the strategic problem of figuring out how to maintain its growth and position now that ADSL is near or at its peak.

This buyout gives ECI's current major shareholders an opportunity to get while ECI is in a strong position. Its new owners may have a different strategy in mind, such as splitting the company up and selling off the pieces.

FCC Pushing Cable Companies to All Digital

In a ruling today, the U.S. FCC gave relief against the requirement that banned set-top boxes with integrated content protection on the condition that these companies convert to all digital by February 17, 2009. This ruling effects some IPTV providers such as Verizon and Qwest for its IPTV trials in Phoenix and Denver. The purpose of this ban is to open up a competitive retail market for set-top boxes. The conversion to all digital will free up spectrum and permit new services to be offered.

This is bad news for the IPTV providers in the U.S. such as AT&T and Verizon. Forcing the U.S. cable companies to go all digital will give them a significant amount of spectrum that they can use for DOCSIS 3.0 services, IPTV, and interactive TV. This will make the U.S. cable companies that much more competitive with the IPTV services.