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FT Plans Euro IPTV Assault

Ray Le Maistre
1/26/2006

PARIS -- Orange (NYSE: FTE) is to take advantage of its telco TV experience in its domestic market by launching IPTV services in neighboring European markets in 2006, according to Benjamin Schwarz, the executive leading the services push.

Schwarz, who spoke here this week at TVoDSL 2006, says the French incumbent has been providing its video on demand (VOD) and broadcast TV service, called MaLigneTV, to its French DSL customers for the past two years, and now has more than 200,000 customers. [Ed. note: Malign TV? Ouch. Hope they change the name for the U.K.] (See France Telecom Intros TV Over DSL.)

But it hasn't been alone. FT has faced tough competition from the likes of Iliad (Euronext: ILD)'s ISP Free , Neuf Cegetel Group (Euronext: NEUF), and cable operator Noos , while Telecom Italia (TIM) and T-Online International AG 's Club Internet are preparing to launch video and TV services in France. (See Iliad's Free Strategy Pays Off, Italians Prep Big French DSL Rollout, Neuf: Time Is Right for IPTV, French Say Oui to DSL TV, and Competition Trumps Demand in Euro IPTV.)

Now FT is stepping up a gear. It has just announced a range of new services for the French market. Schwarz told delegates here in Paris that an IPTV service launch in Spain is imminent (first quarter), and that the U.K., Poland, and the Netherlands would follow. The carrier is also planning to roll out IPTV services in Mauritius and Senegal.

Spain "is our prime target," says Schwarz, adding that "it has the most favorable conditions."

Through its Wanadoo SA broadband unit, FT has more than 530,000 broadband customers in Spain, a market where incumbent Telefónica SA (NYSE: TEF) is the only player with any IPTV penetration of note with its Imagenio service. (See Telefónica IPTV Hits 200,000.)

However, alternative operator Jazztel plc , which has 220,000 DSL subscribers, has just launched its IPTV service in Spain, with an introductory offer of just €1 (US$1.22) per month until the end of May 2006 to attract customers, while cable operator ONO has 1.8 million customers. (See Jazztel Trials IPTV.)

Schwarz says the business model for each territory will be different, depending on the existing competitive landscape, and that the Spanish service will launch with "our own pay TV channels from day one." The carrier will be launching and managing the various international services using the same middleware platform it has in France, from French firm Thales Broadcast & Multimedia , which is being acquired by Thomson S.A. (NYSE: TMS; Euronext Paris: 18453).

Further details of FT's international plans are unavailable, such as the exact services or marketing plans, though FT has said previously it is keen to use its Orange brand for fixed as well as mobile services as it aims to become Europe's dominant service provider. (See Eurobites: Big Guns Fire Salvos.)

Schwarz did identify a number of specific difficulties that the carrier has had to address before it can launch its non-domestic IPTV services, such as the potential for unbundling the local loop -- a process FT's Wanadoo is already engaged in in the U.K., where it has more than 800,000 broadband users -- the readiness of support and call center staff, and content partnerships. (See UK Tops Euro Broadband and Unbundling Heats Up in UK.)

FT should be in a better position than most to overcome such operational difficulties and deal with any technical issues, too, says industry analyst Dr. Erik Lenhard of Solon Management Consulting GmbH . He says France Telecom is well placed to expand into other markets because it has already solved many of the problems faced by IPTV service providers.

Of critical importance are the staff that have been involved in the MaLigneTV rollout. "Other service providers don't have that sort of experience, and it's very difficult to hire people with that sort of knowledge," says Lenhard. "France Telecom also has existing relationships with content providers and knows how to deal with the [film and TV] studios. That's a tremendous advantage."

— Ray Le Maistre, International News Editor, Light Reading

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