Carriers Claim IPTV Wiring Worries
Early players in the telco IPTV game are finding an unwelcome surprise in the cost of wiring homes for service
May 10, 2005
After IPTV networks are built and a subscriber signs up, the carrier can breathe easy, right? Maybe not. U.S. carriers say one of the biggest IPTV challenges they face is making IPTV service available on all the TVs in a household (see NAB2005: Telco Video Bingo).
The IPTV signal typically enters the household via an Ethernet connection to an ADSL modem, which connects to a set-top box, which plugs into the TV (see Scientific-Atlanta Wins $195M SBC Deal). But U.S. households typically have two or three televisions and the various costs of running new CAT-5 cable to those additional sets are substantial.
“It’s what I call the dirty little secret of IPTV,” says Entone Technologies Inc. CEO Steve McCay. “The huge issue today is that it’s one thing to get the signal to one TV, but what if you have four or five TVs in the home?” (See BNS Expands With Entone IPTV .)
To get the IPTV signal from the main TV to sets in the bedrooms costs about $800, according to some accounts of carriers delivering IPTV today. Here’s how it breaks down: two additional set-top boxes at $150 each, new CAT-5 cabling at $50, approximately eight hours of skilled installation at $50 per hour, and a “windshield cost” (gas and depreciation on the service vehicle) of $50.
“We do truck rolls where I was hoping they would do the installation in 2 hours and they are there for 6 hours,” says Bill DeMuth, CTO of SureWest Communications (Nasdaq: SURW), which has offered IPTV service since 2002 (see IPTV Scramble Is On). “This is our biggest problem.”
So who pays for such a big headache? Coaxsys Inc. director of marketing Ted Archer says that IPTV operators all have different ways of dealing with the costs.
Some will offer limited or no inside wiring to go along with an IPTV installation, Archer says. But he maintains that carriers really aren't in a position to demand a big upfront fee from their customers.