Networking

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.”
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.
13 December, 2005
SureWest And HDNet, 1st To Launch US HD Over IPTV Service
California based telecoms company, SureWest Communications, is set to become the first company in the USA to offer HDTV commercially over its Internet Protocol (IP)-based fibre-to-the-premise (FTTP) network.
The company have announced that it will be including high-definition networks HDNet and HDNet Movies in their high-definition television (HDTV) service set to launch this year.
“We are pleased to offer viewers in the Sacramento region the great variety of live and original news, entertainment and sports programming that can only be seen on HDNet and HDNet Movies,” said Peter Drozdoff, SureWest’s vice president of marketing.
“Through our HDTV channel lineup and launch of HDTV over IP, we are showcasing our dedication to providing customers with the highest-quality programming, sharpest picture available and a variety of emerging video products,” he added.
Quick to join the self-promoting, backslapping party, Mark Cuban, co-founder and president of HDNet, was quick to pipe in, “We are happy to be partnering with SureWest to deliver the HDNet networks to their customers in the Sacramento region and to be providing them with great original high-definition programming and exclusive day-and-date premieres of theatrically released movies.”
HDNet and HDNet Movies currently broadcast news, sports, music and entertainment programming in 1080i high-definition format, with a widescreen 16×9 aspect ratio.
On HDNet, SureWest viewers can, err, thrill to original series like “HDNet World Report,” “Face 2 Face with Roy Firestone” and “HDNet Concert Series,” and if that lot doesn’t set you packing your bags for Sacramento, there’ll also be showing Warner’s “Smallville” series and a load of live sports productions include Major League Soccer games.
HDNet Movies is the “exclusive home of day and date movie releases” presenting a wide selection of major studio’s theatrical releases which are broadcast uncut, unedited and in their original aspect ratio.
To view HDNet and HDNet Movies, SureWest customers will need an HDTV set, a SureWest HDTV cable box and a subscription to the SureWest HD service tier.
And quite probably a SureWest HDTV t-shirt too.
SureWest
HD
8 December, 2005
NTL Bids For Virgin Mobile: 1st Mobile Quad Play?
NTL is currently in talks to merge with Virgin Mobile in a deal that would create a potential rival to the now broadband-enabled BSkyB.
Virgin Mobile’s official word?
The Board of Virgin Mobile Holdings plc confirms that it has received an approach from NTL Incorporated that may or may not lead to a formal offer being made for the Company.
Shares of Virgin Mobile immediately climbed to a record high after NTL/Telewest announced its £835m ($1.44 billion) takeover bid.
If the bid is successful, it will create the first media group to serve up mobile and fixed-line telephony, broadband Internet access and pay-TV.
(Ed: It has a similar resonance as the deal between 3 Italia and Canale 7)
We’ve found that getting straight numbers of subscribers for each separate business is difficult. The figures that the Guardian are quoting for the merged Virgin/NTL/Telewest uber-company are impressive too, accounting for 10m customers, 3.3m television customers, over 5m mobile phone users, 2.5m broadband Internet customers and 4.4m fixed-line telephone accounts.
NTL/Telewest do have to do something pretty radical as they feel the pressure from other previously unrelated business getting in on their main business areas.
The new company will go under the Virgin brand, and would become the biggest Virgin-branded business in the world, outstripping the music retail business which launched Branson’s career and the Virgin Atlantic airline business.
In a fiercely competitive market, cable companies on both sides of the Atlantic are looking to outflank their satellite and phone company rivals by adding mobile phone services to their portfolio of voice, Internet and TV services.
NTL is the UK’s number two pay-TV operator after BSkyB’s Sky and is also the second-largest residential telephony provider after BT Group.
Long seen as a juicy takeover candidate, Virgin Mobile is the fifth-largest UK mobile phone carrier. The company operates on rented capacity on T-Mobile’s UK network.
Virgin Mobile current 4 million users (source Virgin Mobile) in the UK, puts them at less than a third of the UK market leader, o2’s, who have 15 million users.
NTL and Telewest have notched up around 5 million subscribers combined, next to BSkyB’s 7.8 million digital television viewers.
If the deal goes through, it won’t be the first time the two companies have worked together – in 1996 they launched the Internet service provider Virgin Net, which had an original owner ship of NTL with 49% and Virgin, 51%. The enterprise was fully taken over by NTL in 2000 but still trades under the powerful Virgin brand name.
Virgin Mobile
NTL
5 December, 2005
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
1 December, 2005
UK Broadband To Peak At 60% Adoption: Datamonitor
Broadband adoption in the UK may soon be reaching its peak, according to a new report from Datamonitor.
The analyst firm says that although consumer adoption of broadband is at its fastest rate yet in Europe, it expects national broadband adoption to peak at around 60 per cent.
Broadband is currently used by at least half of all internet users in the UK, but looks set to follow the US market where broadband take-up has slowed sharply.
By the end of 2005, nearly eight million UK households should be hooked up to a broadband connection with report author Tim Gower predicting “a good eighteen months to two years of strong penetration increases across Western Europe before markets begin to mature.”
Although we’re nearly broadbanded out in Europe, the report sees excellent opportunities for growth in less mature markets.
“The current situation in many markets is best described as one of rapidly increasing penetration, where broadband has effectively entered its growth sweet spot,” observed Gower.
“With some markets potentially experiencing changes in the household penetration of broadband of up to 10 per cent in a calendar year, service providers must be well positioned to take advantage of the forthcoming penetration acceleration, prior to the inevitable slowdown,” he added.
The report found that DSL and ADSL were the most popular broadband technologies, with adoption being driven by cheaper access rates, marketing campaigns and the growing popularity of broadband-reliant applications like iTunes.
Datamonitor
28 November, 2005
MetroNet Bought By PlusNet in £1.7m UK Broadband Deal
MetroNet, UK broadband ISP, has been purchased by PlusNet in an all cash deal for £1.7m.
MetroNet, who came first in the most recent Which? survey of UK ISPs, happens to be the broadband provider to Digital-Lifestyles HQ. We’ve found them very impressive – the speed of the service is good, the customer services is rapid and responsive and their online software is solid.
MetroNet has grown since their start in 2003 to 16,000 subscribers, turning over £2.1m bringing an operating profit of £40,000 in the year ended 31 March 2005. They have net cash of over ~~£200,000~~ (update, final figures) £400,000. Bearing this in mind, we estimate that each subscriber has been valued at ~~£93.75~~ £81.25.
PlusNet have been running for over eight years, and were, out of interest, 7th in the Which? survey that MetroNet topped. They currently have 150k users.
Speaking to PlusNet about the future of MetroNet, we were told that short term nothing will change. But longer term, as the purchase sinks in, MetroNet subscribers will be moved over to PlusNet network and 24-hour support system. They thought that longer term translated to some time next year.
PlusNet offer a number of services that MetroNet currently don’t, including a SIP-based VoIP system called PlusTalk which connects to other open standard systems like SIPGate.
We, and we assume other MetroNet subscribers, hope that the high quality of service that we’ve received from them continues, without interruption, in the transition to PlusNet.
An interesting feature of the broadband market in the UK is that changing to another provider is relatively painless, which makes it all the more important that a consistently good service is delivered to the subscriber.
MetroNet
PlusNet
28 November, 2005
Mydeo Signs Tiscali In Home Video Sharing Deal
Mydeo, the UK consumer video streaming company, has teamed up with UK ISP Tiscali to offer streaming video sharing services to broadband users of the UK Tiscali Website.
Available within the Community, Members and Technology areas of the Tiscali.co.uk site, the co-branded service will let users add home videos to their Websites, blogs or personal Webspace areas, and send streaming video emails.
‘Streaming is perfect for sharing home videos on the web because it allows users to show people their videos without giving the files away. Downloading not only means waiting to watch but, for the publisher, it also means you lose control of your content,’ enthused Cary Marsh, Managing Director and Co-Founder of Mydeo.
‘We know how important this is to our members sharing personal and family videos,’ Marsh added, earnestly.
The accent is definitely ‘family videos’ here. Unlike some of the other services that have sprung up since Mydeo first started, the video on it are definitely on the respectable side. It’s the sort of place you’d be happy to point your family to without them seeing anatomy shots or someone having their head cut off.
Members will be able to stream their cinematic masterpieces on a pay-as-you-go basis, and will only have to shell out when they choose to upload a video. Users can pay in Euros, UK Pounds or US Dollars.
Once on the server, members can blast out their captivating home videos in customised video emails to lucky recipients.
We’ve learnt that the deal with Tiscali is a one-way exclusive, i.e. Tiscali can’t use another video sharing services, but Mydeo can work with other ISPs. It’s our understand that Mydeo are in discussion with other broadband ISPs, who we’re told are showing a lot of interest in carrying the service.
‘We are very pleased to be able to bring such an exciting and innovative service to our users. Streaming video and broadband are a natural fit,’ purred a deeply chuffed Alex Hole, commercial director of Tiscali UK.
“Mydeo is really easy to use and offers lots of help and support for our members who may be putting video on the Web for the first time,” Hole insisted.
With the Mydeo service already integrated into the popular Windows Movie Maker 2 package, the process of uploading videos should be fairly straightforward for Windows XP users.
Mydeo are the only European supplier of streaming services to Microsoft Windows Movie Maker 2.
The company claims that their service lets the “humble home video maker” enjoy the “quality and reliability of a world-leading streaming network, something they would never have been able to purchase as an individual.”
Mydeo
Tiscali
23 November, 2005
Analysis: Cisco Looks to Own Consumer IPTV
For a long time, Cisco was only focused on high-end corporate sales. This started to change with its acquisition spree. Back In June 2003 it acquired Linksysin order to attack the home and small business markets.
Under the Cisco banner, Linksys have madefurther acquisitions, including Kiss Technologies whoproduce DVD and media streaming solutions (at the higher end of the consumermarket).
Now Cisco have acquired Scientific Atlanta (SA), a massive company, who make set-top-boxes (STBs)mainly for cable companies, but more recently in the IPTV space (i.e.they have an Ethernet connection and video out/SCART socket or equivalent).
IPTV the future of TV
It’s now widely agreed that the future of broadband is what’s known as triple-play (the combinationof Internet, voice and video). In the past, cable companies have held avirtual monopoly on this market as CATV (cable TV) was the only technology thatcould deliver the bandwidths needed. However with the advent of new DSL (DigitalSubscriber Lines) technologies such as ADSL2+, they too can be usedto deliver triple-plays.
DSL is much cheaper to install as it uses existing phone cabling, ratherthan CATV which requires digging up the road, installing fibre tothe street and co-axial cable to the home (this may not be true forgreenfield sites, but in countries with existing infrastructure likethe UK it is).
In Europe, IPTV is starting to take off in a big way, broadband pricesare plummeting as operators offer the basic services for very low cost,hoping customers will take premium services.
In the UK, Sky acquired Easynet (a local loop unbundler) and they aregoing to launch an IPTV service next year (possibly more).
Cisco has a lot of clever people working there and as has seen the market grow. Now they want theirpiece of the pie. Hence the SA purchase.
Core networks
It’s not like IPTV is new to Cisco. They’ve have had an IPTV solution for several years, but theirs was aimed atthe enterprise customer (i.e. big businesses).
Cisco’s core business is, and will continue to be, selling high-endnetwork equipment to the telecoms and cable companies, ISPs, etc. All of this high-end network equipment can be IPTV-enabled.
Though Cisco have bought Scientific Atlanta, who manufacture the consumerpiece of the puzzle, by expanding the consumer take-up of IPTV they arealso expanding the core network business. Don’t forget, running IPTV servicesrequires a lot of investment in network infrastructure i.e. moreCisco kit.
Cisco are coming close to becoming a fully horizontally integrated company. After the SA purchase, there’s only a few bits missing. The actual content creation, which we think it is highly unlikely to get into – it’s far too messy, involves troublesome humans and is an unknown to them.
The other is the content encoding/delivery part. Who knows, that maybe another acquisition on Cisco’s horizon?
Cisco
22 November, 2005
Cisco and Scientific Atlanta Converge
Convergence took a step forward Friday past as Cisco announced the takeover of Scientific Atlanta (SA). The price? $6.9 billion cash.
SA shareholders don’t get a big premium (around 4%). The markets had already priced the shares to allow for a takeover talk, of which has been ongoing for some time – Sony being rumoured as one of the prospective suitors. Conversely, Cisco stockholders aren’t too enthused with the takeover, and see the cable business as riskier than the high margin routers that have been Cisco’s cash cows.
The acquisition looks a good fit though, Cisco are keen to push their IPTV proposition, SA’s strength in the US set-top-box market (they have around 40% market share) will allow them to capitalise on the access to the home that video brings. The companies’ combined news release majors on this, John Chambers, president and chief executive officer of Cisco Systems said “Video is emerging as the key strategic application in the service provider triple play bundle of consumer entertainment, communication and online services.”
The release also notes that the coming together of the two companies “creates a world class, end-to-end triple play solution for carrier networks and the digital home”
Formed in 1951, SA has long been a market leader in Cable TV, has a healthy balance sheet and already has one large IPTV customer in the shape of SBC Communications. The critical mass of SA as part of Cisco should help it win more.
Expect both Motorola (SA’s main US competitor) and Microsoft to consider how best to respond to this strategic move by the dominant Internet hardware backbone provider.
Cisco
Scientific Atlanta
21 November, 2005
Mesh Networks Discovered By The Mainstream
Mesh Networks are going to grow enormously by the end of the decade, according to ABI research. This ‘revalation’ is following years technical-types raving on about them.
While predicting “stellar growth rate”, they don’t think it will eat into current providers of current infrastructure, but instead new markets will emerge such as alternative service providers, municipalities and college campus’s. Oh and buy happy co-incidence, ABI have a report that you can buy about the subject, “Wireless Mesh Networking: Technologies and Deployment Strategies for Metropolitan and Campus Networks.”
Indeed, at the launch of the One Laptop Per Child event earlier in the week, Nicholas Negroponte explained that Mesh Networking was intrinsic to the success of the project, as many countries it would be used in do not have communication infrastructures.
Mesh Networks explained
Mesh Networks, have been spoken about, and set up by some, for many years. The idea behind it is simple. Each user of the network expands the reach of the network, by letting information pass through their machine to its eventual destination, be that another user of the network, or an external connection.
Using this a small community of people could share a single network connection. The network is ‘organic’ – everyone who uses it, contributes to it.
There are technical challenges. As each person on the network could disappear at any time, the routing of the information needs to be highly dynamic.
At the start of this week, Cisco announced their first Mesh network products, following their purchase of Airespace for $450 million in December of 2004.
ABI Research
18 November, 2005