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| Perfect storm in an IPTV cup? |
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| Tuesday, 22 May 2007 | |
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Could be a case of if you can’t beat ‘em, join ‘em for US cable companies…
According to a new analysis from ABI Research the announcement by Comcast that it will trial IP video services later this year using the new DOCSIS 3.0 data networking standard highlights the keen interest many cable operators around the world are showing in the possibilities of IPTV. “The coming integration of IP video services into cable TV infrastructure is the result of a convergence of market forces,” says ABI Research vice president Stan Schatt. “The main driver is the threat from the telecom operators, whose IP network configurations are allowing them to offer more dynamic services. As well as moving to IP to counter this threat, the cable operators aim to up the ante by incorporating mobile voice into their bundled offerings as quickly as possible.” Another driver for IP video is the need for improved network efficiency and more available broadband spectrum. To offer more services, cable operators need ‘bigger pipes’ reasons ABI. Their voice services are already IP, and they're already using IP over DOCSIS for data. Moving the video to IP as well will mean more efficient networks allowing more converged services, such as bringing voice and data services to customers through their TV sets. DOCSIS 3.0 is also seen as one way to increase available spectrum because it removes some of the video from the multicast stream that is part of the traditional spectrum. “The consequences for equipment vendors will be enormous,” ventures Schatt. “North American cable operators collectively spent more than US$80bn on network upgrades in recent years, and now they'll have to spend freely once more: the change to IP video affects not only core head-end equipment, but the set-top boxes found in every household served by cable. This is going to create a huge equipment turnover.” And interest by cable companies in IPTV may not be just a US phenomenon. In the UK, for example, Virgin Media (nee NTL/Telewest) has just inked a contract with Cable & Wireless that sees C&W become its exclusive unbundled local loop (LLU) network provider on a wholesale basis. Wholesale access to C&W’s 4mn broadband subscribers will support Virgin Media’s existing off net customers as well as new customers, allowing the company to offer broadband, phone and IPTV service to parts of the country not currently served by its cable network. It’s moot, though, whether increased investment by cable companies (or telcos for that matter) in IPTV equipment is money well spent. One estimate by eMarketeer has a very modest total of 41.1mn IPTV subscribers worldwide in 2011 (the year the C&W deal with Virgin Media runs to). Again, while research from Strategy Analytics roughly doubles the total number of IPTV households worldwide to more than 80 million in 2011, that company’s ‘Global IPTV Forecast: Homes, Users and Subscribers’ report suggests that many ‘subscribers’ to IPTV will not be paying directly for TV programming or services, but will use IPTV free-of-charge as part of a package of bundled broadband services. The Strategy Analytics report predicts that the number of households worldwide actually paying specifically for IPTV services will rise from 3.3mn in 2006 to 40.9mn in 2011. Storm in an IPTV cup? John Williamson |
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