BT – Page 7 – Digital-Lifestyles

Pressure Builds – No Christmas Cheer For BT

BT has been hit by two further blows, bringing into stark relief the height of the mountain it must climb to achieve its TV ambitions. Secondarily, drawing into sharp focus the changing landscape for domestic phone calling, as the competition begins to consolidate.

The bad news for the BT TV proposition, is that BSkyb has got its 8th millionth customer. These customers are, by and large, the sort of customer BT badly needs for its triple play TV offering to be a success. They’re high-delivering ARPU (Average Revenue Per User) viewers that will delight the beleaguered BT finances.

Sky’s achievement of the 8 million target is also likely to be a blow to the ambitious NTL. Expect little let up from Sky as it battles to reach the 10 million mark by 2010 and continues to push its Sky+ and multi-room offerings.

Separately, a consolidating Carphone Warehouse has been on the acquisition trail and agreed the purchase of Tele2’s UK and Ireland operations, and separately, Onetel.

The deal with Tele2, the Swedish telecoms company, at a price of £8.5 million plus the £2 million cost of a planned restructure, will add around 188,000 customers in the UK and a further 36,000 in Ireland to Carphone Warehouse.

The deal appears to makes sense for Carphone Warehouse, and they expect the transaction to add to their earnings in the current financial year. They intend to migrate the purchased companies customers onto its own network, under the TalkTalk brand.

The purchase of Onetel from Centrica for £132 million includes £37.1 million, while will be delivered if Centrica deliver a targeted number of customers in the next three years via its British Gas operations. The Carphone Warehouse will also pay Centrica an additional £22.2 million if higher sign-up targets are met.

Onetel’s residential customer portfolio is made up of 1.1 million Carrier Pre-Select (CPS), 250,000 indirect access, 60,000 broadband, 40,000 mobile. There are also 50,000 CPS business customers. Carphone Warehouse are upbeat about this purchase too, saying the acquisition will “increase current year pre-tax profits by approximately £4m, and next year’s pre-tax profits by approximately £20m.”

Here at Digital Lifestyles, we expect competition to be even fiercer in 2006 as both BSkyb and the Telcos battle to capture high spending subscribers.

BT’s IPTV Content Deals: Too Little Too Late?

BT’s IPTV Content Deals: Too Little Too Late? In the week that BT and Sky both saw their triple play offerings potentially trumped by a possible NTL/Virgin ‘quadruple play’, BT chose to release details of its upcoming content deals with BBC Worldwide, Paramount and Warner Music Group.

Ian Livingston, chief executive of BT Retail, talked up the deals, “Whether you are a music fan, love films or hooked on drama you will get the best in entertainment when you want it. BT is defining next generation TV.”

BT’s IPTV Content Deals: Too Little Too Late? Against a backdrop of whispered rumours of delays with Microsoft’s IPTV Edition, the BT service is slated for launch next year.

BT’s TV service will piggyback on-demand programming, delivered by a high speed Internet connection to a Philips terrestrial Freeview receiver, and the PVR component of the box will hold 80 hours of downloaded programming.

The service will not be a monthly subscription like that of NTL and Sky, instead it will follow a ‘pay-as-you-go’ model, where individual downloads and viewing can be charged.

An agreement with BBC Worldwide that covers on-demand rights for BBC programming and charges for viewing, will provoke controversy as the BBC is paid for by a universal levy on TV viewers in the UK.

Problems won’t be confined to BBC programmes if ITV programming is carried, advertisers are bound to be unhappy that time-shifting viewers will skip the paid for messages.

You might be able to tell that we’re not that excited about this deal. At least BT seems to recognise that viewers watch content rather than technology … or well negotiated deals.

With so many digital TV homes in the UK subscribed to Sky or cable, we’re just not sure if BT will be able to muscle into the Digital TV space.

A major question mark hanging over them is whether the content promised so far is enough to encourage current subscribers to switch or, even more difficult, if they can get the so called “digital refuseniks” to join BT’s TV.

BT Cashes In To Goverment Money

BT have been enjoying government payouts to maintain their networks.

Interesting news for all those that thought it was many years since BT was an ailing monopoly to be propped up by a Labour government.

It was revealed in an answer to a parliamentary question (text below), that around £7 million has been paid to BT in England and Wales, and a contract for work in Scotland, that is not yet complete, should benefit the Telco goliath to the tune of a further £16.5 million. BT has also received undisclosed sums from the East Midlands Development Agency to extend broadband availability in the region.

Now this might come as a surprise to those who’ve got the impression that BT was doing this along with its investment in the so-called 21C network, as some sort of “Noblesse Oblige”.

Looking back over our archives for January of this year, it put a smile on our faces to see BT, when defending itself against smears of improper financial assistance related to the UK property rating system, responded to criticism leveled by those terrible bureaucrats in Brussels with…

“BT is surprised that the European Commission is to investigate the UK government over the property rates that BT has been paying. In BT’s view, any allegation of state aid would be groundless as BT has received no benefit from the UK government. BT is confident that the UK government will demonstrate the fairness of the UK ratings system.”

Expect smaller UK operators to cry foul – with some justification – as they see the dominant player’s position reinforced by government money, and BT’s competitive edge further strengthened in areas that include upgrading their network for TV delivery.

(Ed: Looking at this information, it feels wrong that BT are being given public money to maintain their network, one which they are directly gaining income from. This benefit isn’t passed back to the general public who are funding it, but instead to BT’s shareholders.

—-Fully text of the questions and answer.
Stephen Crabb (Preseli Pembrokeshire, Con)

To ask the Secretary of State for Trade and Industry what the total amount of financial subsidies and grants received by BT has been since 1997 for the purpose of extending broadband availability in the UK.

Alun Michael (Minister of State (State (Industry and the Regions)), Department of Trade and Industry)
Since 1997 BT has received the following financial sums to enable exchanges to extend broadband availability in the UK:East of England Development Agency paid BT approximately £500,000, to enable most of their remaining exchanges in BED A areas. This was awarded through the Broadband Aggregation programme.

Following a competitive tender South West Regional Development Agency awarded BT approximately £3900,000 to enable some exchanges in the Cornwall area.

Following a competitive tender, BT in Wales was awarded £3.6 million of European Structural Funding to upgrade over 40 BT telephone exchanges from UXD5, making ISDB2 services available to 99 per cent. of BT lines. The investment was also used to enable Digital Subscriber Lines, ahead of the commercial roll-out programme for the UK, in BT exchanges in market towns across Wales. It is estimated that the total project value was around £6 million.

Following a full EU Procurement Process to extend broadband availability in the North East region, BT was paid £1,830,345. This sum is subject to a downward adjustment, in accordance with a reverse contribution scheme, which operates to repay money to the Agency if broadband take up in the region exceeds a prescribed level.

£364k was awarded to Vale Royal Local Authority acting on behalf of the Cheshire Digital Development Agency who, following a competitive tender through the North West Regional Aggregation Body, awarded BT a contract to enable of a series of remote rural exchanges in Cheshire.

In Cumbria, Your Communications was awarded a large infrastructure project (Project Access) contract for approximately £17 million following a negotiated, state aid approved OJEU competitive tender. Your Communications sub contracted part of the contract with a value of around £1 million to BT for the early enablement of all the exchanges in Cumbria and specifically for the enablement of 14 exchanges in the remotest areas of the sub region.

In Scotland £16.5 million was awarded to BT following competitive tender. The roll-out has not yet been completed so not all the money has been paid as yet. The European Commission was notified under State Aid rules.East Midlands Development Agency has worked with BT on a number of sub- regional strategic partnerships, to extend broadband availability. As part of the contractual arrangements confidentiality agreements were signed by the sub- regional partnerships to protect information as commercial in confidence. Accordingly, this information is not be available for disclosure.
Hansard reference

BT Results Analysis: Stuck Between Rock And Hard Place

Telco Analysts Study The Runes On BT Results Poor old BT. Now that it’s reached a settlement with OfCom that allows it to keep retail and wholesale arms under one, some would say, severely stretched umbrella, commentators emerge from cover and say it might be better if it’d spit into two (or more) parts. The cost of Openreach has been put at £70m so far and in terms of efficiency in the UK telecoms market this could well be an ongoing sore.

BT has announced an IPTV offer for the retail market that some say offers too little too late. Early adopters of Digital TV are, in the main, already committed to Sky, who will look to rapidly integrate an Easynet download capability in an attempt to beat off the challenges from BT and a combined resurgent UK cable monolith formed by Telewest and NTL. The remnants of the consumer markets’ move to digital TV that BT will attract, are likely to be those less inclined to convert to a pay TV proposition, and they’re likely to be operating with tighter disposable incomes than those who have already left analogue TV behind.

Sky’s upcoming purchase of Easynet adds considerably to the pressure on BT.

Major Telcos in Europe have, by and large, a coherent mobile strategy and BT’s deal with Vodaphone is viewed as little more than a stop gap.

Where does this leave BT?
Interestingly enough, Telefonica’s bid valuation of O2 put the value of the former Cellnet constituent of BT above that of the remainder of the UK’s juggernaut Telco- perhaps BT Group could be of interest to another global suitor?

At present there’s a danger that not only will wholesale be delivering utility-style performance but that retail may be moving into a period of decline and could it be that the future of BT is again up for a re-evaluation by it’s major stakeholders?

Networked Home “too confusing” for consumers

Networked Home “too confusing” for consumers The futuristic vision of a connected home with content moving seamlessly from our TV to our PC and on to our mobile device is still a long way off, according to key speakers at The Connected Home conference in London today.

While David Sales (pictured right) from BT Entertainment waxed lyrical about broadband; Microsoft’s Elena Branet praised IPTV; and Mary Francia of Philips presented the Streamium product range; they conviently avoided the the area of interoperability.

Networked Home “too confusing” for consumers It took Dimitri Van Kets (pictured left), from Belgian telco, Belgacom, to voice what many were thinking by announcing that the networked home was “little more than a mass of standards” and “too confusing” for the average consumer. Unless the service providers get together and educate customers, he said, true home connectivity was never going to happen.

Sky Interactive’s Paul Dale, speaking from the audience, said he’d been annoyed when a perfectly legal DVD of Thomas The Tank Engine wouldn’t play on his Windows Media Player. Luckily he’d been able to hack into it – but clearly this wasn’t the preferred way forward!

Networked Home “too confusing” for consumers Paul Szucs of Sony said that service providers should “try not to lose the plot with content protection”, adding that “consumers simply want their devices to work together and share content.”

The mood was best summed up by Peter King of Strategy Analytics: “We’re not going to move any further without a massive consumer awareness programme funded by all players in the chain.”

Even Microsoft’s Branet admitted there was a need to “focus on educating consumers”.

But until the key players stop operating in silos, this isn’t going to happen.

Microsoft
Streamium

BT Starts Trials Of 8mbps Broadband

BT Starts Trials Of 8mbps Broadband BT is planning to turbo-boost broadband connectivity by quadrupling basic connectivity speeds to 8mbps nationwide and giving the service a snappy name, “ADSL Broadband Max”.

Compared to some of the competition, BT’s current 2mbps basic broadband connectivity speed (quadrupled from 500kbps to 2mbps earlier this year) makes a glacier look light footed, so the upgrade is desperately needed to keep customers from straying elsewhere.

BT Starts Trials Of 8mbps Broadband The 8mbps service will see BT reaching the theoretical top ADSL speeds it announced when the broadband service first launched in 2000.

BT has said it will begin trials of its ADSL Broadband Max service next month in London, Cornwall, South Wales, Scotland and Northern Ireland, with the trials gradually expanding into a national 8mbps roll out starting in spring 2006.

Cameron Rejali, managing director for products and strategy at BT Wholesale, was on-message, “BT is committed to ensuring everyone benefits from the broadband revolution, whether they live in valleys, villages or city centres”.

BT Starts Trials Of 8mbps Broadband With the industry rapidly consolidating, BT is coming under increasing pressure from newly merged uber-telecos like Telewest/NTL and Sky/Easynet, with the former already offering speeds of more than 8mbps for no extra charge on existing broadband subscriptions.

BT Starts Trials Of 8mbps Broadband Elsewhere, BT has started trialling optical fibre broadband services in Wales, connecting business to ultra-high-bandwidth services using strands of blown fibre run along using existing telegraph poles.

This technology saves BT having to mess about digging optical fibre trenches to properties and reduces costs of delivering optical services in “the last mile”.

Sky/Easynet Purchase: Analysis

Possible Impact Of Sky Buying EasyNet As we reported last week, Easynet has been bought by Sky – as long as they get shareholder approval, but since Sky have offered a premium on Easynet’s shares, this should be a done deal.

This is the first broadcaster (in the UK) to take control of the telecom’s infrastructure required to deliver a triple-play of voice, Internet and video, though it’s likely Sky will use the broadband piece to complement its satellite delivery channel. This does give them the much need backchannel that has been elusive so far (requiring dial-up to access SkyActive and other services).

This could be a major blow for THUS who provide telecoms services for Sky as well as hosting various services (THUS developed parts of the WapTV service with Sky). Sky accounts for around £30m of THUS’s revenue (about 10% of their total) which could potentially go to Easynet which would make a huge dent in THUS’s revenue figures, though a lot of it is very low margin.However it might put THUS in a poor financial situation when viewed by the city.

Possible Impact Of Sky Buying EasyNet Even though Sky are buying into LLU, Easynet only cover around 250 exchanges and currently all the voice goes to BT (Easynet use the shared metallic path LLU option), while Sky are likely to want to take the phone service as well (they already have a SkyTalk package using CPS provided by THUS). Sky will need to invest to make this a reality as well as increasing Easynet’s coverage. They have said they want to go into around 1000 exchanges, so that’s a build out of around 750 – which won’t be cheap (probably another £100m’ish at least).

For Sky that may be enough as it will cover all major city centres and that’s a big plus for Sky who estimate they can’t reach 20% of their potential audience due to issues with coverage (i.e. no satellite line of site due to buildings in the way, or no way to mount a dish, multi-tennant buildings etc). LLU will give them the means to reaching these people.

It still begs the issue of what’s going to happen when BT roll-out their 21CN and attack all 5,600 local exchanges and also offer a triple-play, but at least Sky will have a lead on them and already have the content ready to roll. BT are likely to be the winners longer term, but at least Sky may have a fighting chance in urban areas.

Sky Buys Easynet If all the LLU players aggregated infrastructure and competed on services, they could build a 21CN of their own now. LLU competition is going to be fiercely competitive with Wanadoo, AOL, Sky and even Be offering a triple-play – all competing for the same customers. – as well as BT (who will have nationwide coverage) and not ignoring NTL/Telewest who are also going into LLU.

The LLU operators have got maybe a 2 year window before BT get their act together, if they don’t do something co-operative now, in 2 years a lot of them will just be passing memories.

Easynet
Sky

Wi-Fly; ISS Falling; i-Tunes 6 – Teenage Tech News Review

Internet Balloon Wi-Fly
BBC news is reporting that BT is testing wireless broadband. What was that I heard? Been done already? Ah well, this is a new twist on a relatively old concept: These guys are using a balloon flying at 24km of altitude to send and receive wireless internet signals. This could mean a new way of accessing data: Although there are currently a number of ways of accessing the Internet on a laptop while on the move, these involve either overpriced GPRS connections over mobile networks, or few and far between Wi-Fi access points, which are not necessarily free either.

What this technology might enable, if it takes off (sorry, bad pun), is to enable laptop users to be finally able to use an affordable data service on the move that doesn’t suck speed-wise and doesn’t cost an arm and a leg to use.

Guess what else? The team doing the initial research on the project are from my local university, literally five minutes down the road!

ISS International Space Station Is it a bird, is it a plane…
…No, it’s the ISS falling from the sky. ITAR-TASS reports that the latest ship to dock with the ISS has failed to boost it’s altitude, as it’s rockets failed after burning for only 3 minutes.

The ISS floats at around 350km above the earth, and at this point in space, there is still a significant amount of drag caused by the earth’s atmosphere. What this means when it’s at home, is that the atmosphere causes friction on the ISS, which means that the space station is constantly losing altitude. What prevents the ISS from falling from the sky are occasional boosts from visiting spacecraft. There is a graph of the ISS’ height and it is clearly visible that it is currently at the lowest that it has ever been at. If the space station’s height deteriorates lower than 300km, it is easily possible that it will fall out of the sky and land on earth, or burn up in the atmosphere.

Although the ISS is kinda cool, I do still have my doubts as to it’s usefulness: What the hell is it actually good for? This is the view of a lot of people in the scientific community, and a lot of people think that it might as well be de-orbitted and the money spent on it every year spent on a better cause. Imagine if the $6.7 Billion that NASA is spending annually on the ISS and the shuttle program went to better causes. Imagine what impact that money would make.

Besides, I want a space elevator, dammit!

iTunes 6 Screenshot Oooh Aaargh, ‘cos we’re pirates!
A few days ago, Digital-Lifestyles covered the new video enabled iPod and accompanying iTunes 6 software. iTunes 6 allows you to download selected TV shows and other content for a fee from the iTunes music store. What if you want to add other recording and stuff to your iPod? Hack-a-day has an article on how to automatically download TV shows via Bittorrent.

They also have an article up on how to use the Tivo To Go software which accompanies the Tivo to transfer Tivo recordings to your iPod.

These hints should help all you cheap skates out there to enjoy a nice, free, iPod video viewing experience. Of course, it also means that it will be possible to watch shows on the iPod not yet available for purchase from the iTunes music store.

Enjoy!

PIPEX Purchases Freedom 2 Surf

PIPEX Purchases Freedom 2 Surf There still seems to be plenty of cash slopping around the broadband sector, as PIPEX has just waved its weighty wad in the direction of Freedom to Surf (F2S) and bought the company for £10m.

F2S is a major UK ADSL provider, boasting 40,000 broadband customers at the end of September 2005.

When added with PIPEX’s existing customers, the combined user base will make the company the 5th largest broadband DSL provider in the country

PIPEX Purchases Freedom 2 Surf It’s uncertain whether existing Freedom2Surf customers already using LLU via the EasyNet LLUStream range will stay where they are or be shunted on to a PIPEX LLU product.

PIPEX had previously announced that it was currently unbundling 60 exchanges, and the acquisition of F2S will greatly increase customer density around exchanges already allocated for unbundling, thus improving return on their investment.

The 40,000 extra customers also makes the possibility of unbundling a further 40 exchanges more feasible.

PIPEX Purchases Freedom 2 Surf Peter Dubens, Chairman of PIPEX, said: “In the light of our recent decision to unbundle an initial 60 exchanges, we are very pleased to add F2S to the PIPEX group, which will further increase the density of customers around each exchange, thus improving the return on capital and enabling us to offer higher speeds to a greater number of our customers. F2S’s customers will be able to benefit from our extensive network and the broad range of services we provide.”

Elsewhere, Wanadoo UK revealed yesterday that it has already unbundled 150 BT exchanges in five UK cities (Leeds, London, Bristol, Manchester and Birmingham) and has plans for another 500 exchanges over the next 12 months.

PIPEX

NTL Announces $6 Billion Telewest Buy Out

NTL Announces $6 Billion Telewest Buy Out Britain’s biggest cable operator, NTL, has agreed to shell out an eye-watering $6 billion (~£3.42bn, ~€5bn) for Telewest Global.

This new uber cable company should provide more effective competition with BT and create a powerful rival for pay-TV leader Rupert Murdoch’s BSkyB, which currently has more television customers in the U.K. than the two cable providers combined.

At the end of March this year, BSkyB had 7.70 million television subscribers compared with NTL’s 3.19 million and Telewest’s 1.82 million.

NTL Announces $6 Billion Telewest Buy Out According to a statement – which ends three years of speculation about the merger – Simon Duffy, NTL’s chief executive, will lead the combined company.

“While the combined entity could potentially pose a longer-term competitive threat to BSkyB, the merger of the two companies could give BSkyB a short-term competitive boost in that it may distract the cable companies from external growth as they merge their networks,” said UBS AG analyst Aryeh Bourkoff.

Both sides are currently keeping Mum about the mixture of cash or shares involved, although a large cash component is believed to be involved.

The Daily Telegraph is reporting that executives at Telewest are set to rake in obscene amounts of filthy lucre for their stock options and other options if the NTL deal goes ahead.

NTL Announces $6 Billion Telewest Buy Out Chairman Cob Stenham can expect his bank balance to increase to the tune of $20m (~£11.4m, ~€16.77m) while chief executive Barry Ellison will no doubt cackle wildly with joy as $17m (~£9.7m, ~€14.25m) rolls into his coffers.

And there’s more, with finance director Neil Smith scooping $3.5m, CEO Eric Tveter getting $9m (~£5.13m, ~€7.54m) and seven non-executive Telewest directors holding 230,000 shares receiving a total of $36.4m (~£20.75m, ~€30.5m) in total from selling their stakes as part of the takeover.

Good work if you can get it, eh?

Telewest
NTL