EchoStar's IPTV Play

ATLANTA -- TelcoTV 2007 -- In a week of discussion on the challenges facing telcos that want to deploy video, the newly announced ViP-TV platform from satellite player EchoStar Satellite LLC could be a game changer.

ViP-TV is a wholesale service that acquires programming from content providers and sends them to a would-be IPTV provider's headend. The service, provided by subsidiary EchoStar FSS Corp., totals 300 channels that can be purchased in various bundles. (See EchoStar Unveils ViP-TV.)

"It allows a provider to get all the programming it wants from one source without needing hundreds of deals from multiple networks," says Heavy Reading analyst Adi Kishore.

This sort of service has been available elsewhere. IP Prime from SES Americom was being shown at TelcoTV in SES's booth and in partner booths around the show floor. Avail Media Inc. was showing off its own content offering as well.

Naturally, SES thinks it's got a leg up on EchoStar. "They're based on a Ku-band satellite while ours is a C-band. C-band is a much bigger antenna that is not affected by the weather, whereas rain can easily disrupt Ku-band," says John Sidline, an IP Prime representative at the SES booth.

Dan Daines, EchoStar's general manager of ViP-TV, acknowledges that the Ku-band is more susceptible to weather but says he doesn't expect that to have any major effect on the service.

Daines points out that EchoStar has a major edge in its relationships with telcos who resell its DISH Network service. EchoStar also delivers local broadcast stations to some telcos. So, the company already has experience and exposure to back up ViP-TV, he says.

EchoStar dismisses fears that ViP-TV could cannibalize its own DISH Network business. "Most potential IPTV customers are not currently in our core satellite business," Daines says. "So I don’t think there would be any significant cannibalization."

Of course, a big chunk of EchoStar's DISH Network exposure to telcos is its relationship with AT&T Inc. (NYSE: T), which resells the service to much of its footprint. AT&T would not be a potential customer of ViP-TV, since it is making its own content deals for its U-verse IPTV service.

But with rumors swirling that AT&T is aggressively pursuing a purchase of either EchoStar or DirecTV Group Inc. (NYSE: DTV), there is uncertainty over what effect a potential Ma Bell ownership could have on ViP-TV.

"I don't know what that would do to the play," says Heavy Reading analyst Alan Breznick. "There's a chance that smaller phone companies would not want to purchase a service if it is owned by AT&T."

Kishore is a bit more positive on the idea: "EchoStar could negotiate better deals due to its larger subscriber base, and AT&T might be able to leverage that, as would subscribers to this service."

Regardless of what effect that could have, there is an excitement here at TelcoTV about getting video to telco customers. Even equipment vendors are getting into the mix. Hitachi Telecom (USA) Inc. is getting ready to announce a partnership with Fidelity Solutions Inc. to deliver a source-to-subscriber video solution.

Fidelity provides not only IPTV but VOIP as well to telcos. "It's a niche offering," a Hitachi spokesman says. "It works, and we're offering it right now, but we don't have any customers just yet to announce."

— Raymond McConville, Reporter, Light Reading

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