Light Reading
Incumbents like Sweden's Telia are launching broadband TV services, but only when faced by a competitive threat

Competition Trumps Demand in Euro IPTV

Light Reading
News Analysis
Light Reading
1/28/2005
50%
50%

PARIS –- Europe's incumbent operators are being forced into the TV-over-DSL market by increasingly fierce broadband competition, with Sweden's TeliaSonera AB (Nasdaq: TLSN) the latest to launch an IPTV service (see TeliaSonera Offers TV Over DSL).

In much the same way that the growing service capabilities of the MSOs in the U.S. have forced the arm of RBOCs such as SBC Communications Inc. (NYSE: SBC) and Verizon Communications Inc. (NYSE: VZ), so access service competition -- rather than technological advances, revenue goals, or sheer get-up-and-go enthusiasm -- is the main catalyst for the continent's national operators to commit to broadband TV services.

That's one of the few theories that speakers and attendees have agreed upon at this week's TVoverDSL 2005 event in Paris (see Paris Presents Blurred TV Picture). Several presenters have noted that, unless there is a pressing need to invest in new systems and launch a service, Europe's major operators are still very focused on building as large a broadband subscriber base as they can muster.

To wit, TeliaSonera says its new service is available in all of Sweden's main cities as of today, covering the majority of the population, and it will reach 70 percent of Sweden's 9 million inhabitants by the end of this year.

A spokesman says the carrier has been testing the service for a few years, and has had to launch the service now because of the increasing competition in the broadband market.

That competition is coming largely from the national cable company, com hem AB, which was spun off by Telia when it merged with its neighbor, Finland's Sonera (see TeliaSonera Sells Cable TV Biz). But the incumbent also faces pressure from specialist service providers such as Bredbandsbolaget AB (B2), which has grown its broadband base to about 25 percent of the market through an acquisition, and which recently launched its first video service, Broadband Cinema (see Sweden's B2 Acquires Bostream).

Telia's main technology supplier is fellow Swedish firm Ericsson AB (Nasdaq: ERICY), which has provided DSLAMs with multicasting and very high bandwidth per customer capabilities (see TeliaSonera Plans Ethernet Over DSL).

Other than that, the spokesman wouldn't talk about equipment suppliers, but he did note that the software managing the service and the customer interface was developed internally by Telia's Research division. He declined to discuss TeliaSonera's IPTV uptake targets.

The Swedish incumbent isn't the first European player to step up its broadband TV plans because of competitive pressure.

France Telecom SA (NYSE: FTE) has been active in IPTV for more than a year as it seeks to prevent its customer base defecting to rivals like Iliad (Euronext: ILD), owner of triple-play ISP Free; and Neuf Telecom, which recently launched its own TV service (see French Say Oui to DSL TV, Iliad Ramps Up Broadband to the Homer, and Neuf Expands IPTV With Cisco).

Across the border in Spain, Telefònica SA, facing pressure from aggressive ISPs, is investing heavily in further broadband rollout and has been dabbling with TV and video services as part of its Imagenio multimedia service (see Eurobites: Pump Up the Broadband and Telefónica Uses Lucent/Riverstone Combo).

And others are set to follow in their wake during the next year or so:

  • Belgacom (Euronext: BELG), which faces intense competition from cable operators, is gearing up for a triple-play launch in June (see Siemens Gears Up for IPTV and Belgacom to Trial Interactive TV).
  • Swisscom AG (NYSE: SCM), also under threat from Switzerland's cable operators, is in the field trial stage at present, and has encountered some teething troubles during its launch process (see Swiss IPTV Trial Hits 'Glitches').
  • Telecom Italia SpA (NYSE: TI) is putting Microsoft Corp.'s (Nasdaq: MSFT) IPTV solution through its paces, and is experimenting with what people at the Paris event call a "hybrid" broadband TV service (see Microsoft IPTV: Now That's Italian!). A hybrid broadband TV services is where the TV channel comes over the air, and the DSL line provides the uplink for interactive services, such as voting in talent shows, and video on demand. That way, fewer bandwidth-hungry signals pass down the DSL connection.
Other operators, meanwhile, are more cautious. BT Group plc (NYSE: BT; London: BTA), which has faced triple-play competition from the U.K.'s cable companies for years, is testing out multiple systems in its labs, but doesn't see itself delivering the standard, already-available TV channels over its DSL lines any time soon (see BT Puts IPTV to the Test). It has other things to occupy its time. (See BT to Extend M&A Spree, Probe Pokes at BT's Tax History, and BT Faces 21st Century Dilemma.)

And in Norway, Telenor ASA (Nasdaq: TELN) doesn't face any fierce competition on its home turf, though it has still trialed and tested the technology and services.

However, it has no plans to launch a commercial service until at least 2006, or even later, according to the operator's director of broadband development, Hans Henrik Westberg. He told the Paris conference that the business case is still not clear, and that there are still technical problems to be overcome. In the meantime, Telenor will concentrate on maximizing its broadband penetration.

And what of German powerhouse Deutsche Telekom AG (NYSE: DT)? Many view Germany as one of the most closed markets, where the incumbent reigns supreme, facing few true competitive threats.

But that could be about to change. Dr Erik Lenhard from Solon Management Consulting told the conference here that DT would have to start moving on a broadband TV strategy soon, as the country's cable operators, currently in disarray and offering hardly any threat to DT's broadband hegemony, are gearing up for aggressive broadband access and VOIP rollouts that could start hitting the incumbent hard as soon as 2007 (see Euro Giants Buy Back Offspring).

In the longer term, IPTV executives believe all the incumbents will have no choice but to launch TV and video services if they want to hold on to their customers.

"Incumbents that don't move into this market in the next 10 years will lose direct contact with subscribers and become little more than transport pipes," reckons Tomas Duffy, CEO of Swedish optical equipment vendor Net Insight AB (Stockholm: NETI-B).

— Ray Le Maistre, International News Editor, Light Reading

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Documentaries
Optical Is Hot in 2015

1|23|15   |   01:56   |   (2) comments


Optical comms technology underpins the whole communications sector and there are some really hot trends set for 2015.
LRTV Custom TV
Policy Control in the Fast Lane

1|22|15   |   2:57   |   (0) comments


What's making policy control strategic in 2015 and beyond? Amdocs talks with Graham Finnie from Heavy Reading about some of the key factors driving change in the data services landscape. Find out what his policy management research reveals about the road ahead for policy control.
LRTV Documentaries
Highlights From the 2020 Vision Executive Summit

1|21|15   |   4:33   |   (2) comments


In December 2014, Light Reading brought together telecom executives in Reykjavik, Iceland to discuss their vision for high-capacity networks through the end of the decade. The intimate, interactive meeting was set against the backdrop of Iceland's spectacular natural beauty. As one of the event's founding sponsors, Cisco's Doug Webster shared his company's ...
LRTV Huawei Video Resource Center
Huawei Pay-TV Partner Harmonic, Helping Carriers Accelerate 4K Video Deployment with Huawei

1|20|15   |   5:42   |   (1) comment


At IBC, Peter Alexander, Senior Vice President & CMO at Harmonic, speaks about the growing interest in pay-TV service and its branching into multiple devices.
LRTV Huawei Video Resource Center
Sony Marketing Director Olivier Bovis Discusses the Outlook for 4K and Cooperation With Huawei at IBC 2014

1|20|15   |   6:50   |   (0) comments


At IBC, Olivier Bovis, Marketing Director of Sony, speaks about the coming of the 4K era.
LRTV Huawei Video Resource Center
Huawei Pay-TV Partner Envivio, Helping Carriers Accelerate 4K Video Deployment

1|20|15   |   2:57   |   (0) comments


At IBC, Olivier Bovis, Marketing Director of Sony, speaks about the coming of the 4K era.
LRTV Huawei Video Resource Center
Pay-TV's Networked Future

1|20|15   |   6:29   |   (0) comments


At IBC, Jeff Heynen, Principal Analyst at Infonetics, speaks about the future of the pay-TV industry and its transition.
LRTV Huawei Video Resource Center
Jeff Heynen: Distributed Access Will Help MSOs Compete in the Future

1|20|15   |   2:26   |   (0) comments


At IBC, Jeff Heynen, Principal Analyst at Infonetics, speaks about moving to distributed access and the future trend of cable business.
LRTV Interviews
Cisco Talks Transformation

1|20|15   |   13:02   |   (0) comments


In December 2014, Steve Saunders sat down with Cisco VP of Products & Solutions Marketing Doug Webster at Light Reading's 2020 Vision executive summit in Reykjavik, Iceland. They spoke about Cisco's approach to network virtualization as well as how service providers can begin to monetize high-capacity networks through the end of the decade.
LRTV Interviews
Bob Wilson, Arsenal Legend: The Light Reading Interview

1|16|15   |   35:36   |   (3) comments


Arsenal goalkeeping legend Bob Wilson was Light Reading's guest interviewee at the 2020 Vision Executive Summit in December. See what the former soccer star and sports broadcaster had to say when he took to the stage in Iceland.
LRTV Custom TV
What MEF Third Network Initiative Means for SDN & NFV

1|14|15   |   6:13   |   (0) comments


Vitesse Semiconductor CTO Martin Nuss discusses the importance of the MEF Third Network initiative and why it's good news for SDN/NFV industry initiatives.
LRTV Huawei Video Resource Center
Frank Miller: Distributed Solutions are the Best Build for the Future - Part II

1|9|15   |   2:46   |   (0) comments


At SCTE, Frank Miller, Global CTO of MSO at Huawei, speaks about Cable 2.0 and its innovative future.
Upcoming Live Events
February 5, 2015, Washington, DC
February 19, 2015, The Fairmont San Jose, San Jose, CA
March 17, 2015, The Cable Center, Denver, CO
April 14, 2015, The Westin Times Square, New York City, NY
May 12, 2015, Grand Hyatt, Denver, CO
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 9-10, 2015, Chicago, IL
September 9-10, 2015, The Westin Galleria Dallas, Dallas, TX
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
November 11-12, 2015, The Westin Peachtree Plaza, Atlanta, GA
December 1, 2015, The Westin Times Square, New York City
December 2-3, 2015, The Westin Times Square, New York City
Infographics
Hot Topics
Cuomo Unveils Broadband Aid Program
Alan Breznick, Cable/Video Practice Leader, 1/19/2015
BlackBerry Wants Net Neutrality Protection -- That's Just Sad
Mitch Wagner, West Coast Bureau Chief, Light Reading, 1/22/2015
FiOS Picks Up Pace Again
Alan Breznick, Cable/Video Practice Leader, 1/22/2015
Verizon Ready for Google MVNO Challenge
Dan Jones, Mobile Editor, 1/22/2015
Indiana Carrier Takes Fiber to the Farm
Jason Meyers, Senior Editor, Gigabit Cities/IoT, 1/22/2015
Like Us on Facebook
Twitter Feed
Webinar Archive