November 1, 2006
Industry executives have been saying for years that launching IPTV services won't be easy. Swisscom AG (NYSE: SCM) is testimony to that. The European incumbent finally turned on its TV-over-broadband service, Bluewin TV, today after three painful years of stop-start developments and trial disappointments. (See Swisscom Launches IPTV.)
Swisscom was one of the first European operators to announce its intention to deliver TV and video services over its copper access network, but, along with its main IPTV vendor partner, Microsoft Corp. (Nasdaq: MSFT), it has had a rocky ride.
Two of the main problems Swisscom encountered were bandwidth requirements and the lack of suitable set-top boxes. During the past 18 months set-top box vendors have been unveiling new products that support Microsoft Corp. (Nasdaq: MSFT)'s IPTV Edition technology, while Swisscom has been deploying Alcatel (NYSE: ALA; Paris: CGEP:PA)'s ISAM multiservice access product with VDSL2 capabilities. (See Set-Top Boxers Support MSFT, STB Makers Support MSFT, and Swisscom Picks Alcatel for IPTV.)
During 2006, Swisscom has been saying it would "launch IPTV before the end of year," a deadline it has now managed, but not without difficulties. Some industry executives, who requested anonymity, say the carrier undertook a major IPTV service trial involving tens of thousands of its broadband customers that went badly wrong, leading to significant levels of customer churn.
A spokesman for the operator tells Light Reading that Swisscom encountered "a number of different problems. We had problems with a set-top box that we developed with Microsoft, and on the network side, you need enough bandwidth to get two channels to the customer -- there, we learned a lot.
"We have had different trials with high numbers of people. Trials exist so you can find out what the problems are early. I can't confirm any numbers, but I can say we didn't stop any trials. None of these problems were bad enough that people couldn't get any service."
The official launch brings to an end a tumultuous three years that has been watched very closely by other IPTV hopefuls and Microsoft's rivals:
Swisscom fixed-line subsidiary Bluewin first announced its intention to launch IPTV services and provide a triple-play challenge to its main rival, cable operator UPC Cablecom , in November 2003 when it revealed its intention to use Microsoft's IPTV technology. It later named Tandberg Television as another supplier. (See Swisscom Picks Microsoft IPTV and Swisscom Deploys Tandberg.)
In September 2005, Swisscom announced a 600-home trial to evaluate a variety of services. "The tests will last for around four months, after which work will begin on the market launch of Bluewin TV in 2005," the carrier announced. (See Swisscom to Trial IP TV Service.)
But that test started badly when "glitches" restricted the trial to a small number of homes. (See Swiss IPTV Trial Hits 'Glitches'.)
Those early problems led to Alcatel's involvement in the Bluewin TV project as a troubleshooter and integrator. The French vendor was subsequently awarded a broadband access infrastructure contract by Swisscom in April 2005, with a view to launching a commercial IPTV service by the end of 2005. (See Swisscom Picks Alcatel for IPTV.)
Alcatel's involvement also paved the way for its unexpected IPTV partnership with Microsoft. (See Alcatel, Microsoft Tuning IPTV Deal and Alcatel, Microsoft Confirm IPTV Deal.)
But even with Alcatel's help, the project proved too problematic, and in May 2005 Swisscom abandoned plans to launch its IPTV service that year. (See Swisscom IPTV Stall Sends Shivers.)
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The carrier, though, has been patient and has worked through its problems with Microsoft and Alcatel, with Ueli Dietiker, CEO of the operator's fixed-line division, Fixnet, noting at a press conference on Tuesday that Swisscom has, in effect, helped to develop Microsoft's IPTV platform.
Hemang Mehta, Microsoft TV's product management director, in a recent meeting with Light Reading, echoed that view. He said the vendor's early adopter program with carriers such as Swisscom and Telecom Italia (TIM) , had "reaped dividends. We have been able to address and avert many big issues. It has been a process of incremental development."
Mehta, though, initially argued that the Swisscom launch had not been subject to delays, despite overwhelming evidence to the contrary. And having finally agreed that the carrier is, in fact, behind its original schedule, he stated: "From zero to commercial launch in about three years is quite quick."
He said the "primary issues" facing Swisscom had been the "volume availability of set-top boxes," and noted that developments at Swisscom have been complex due to the carrier's specific demands for functions and services, such as DVR capabilities, the ability to deliver and record multiple streams, and the need for the user interface needed to be developed in multiple languages. The Swiss population has three main languages -- French, German, and Italian.
Mehta also noted that Swisscom had to undertake "a major networking challenge to deliver services that aren't just 'me-too' " and that the carrier had to undergo a significant revamp of its network and OSS systems to enable the service, reiterating the vendor's "nothing to do with us" stance when asked about problems or delays. (See Microsoft Says Middleware Not a Problem.)
Swisscom, though, has had to launch the service while its network upgrade is still ongoing, resulting in varying degrees of service. Only 75 percent of Switzerland's households, about 2.3 million, can get the service, and about 300,000 of those homes can't get the full functionality.
That's because some local exchanges have not yet been upgraded to VDSL2, which is needed for the simultaneous transmission of two TV channels, one of which can be recorded. In the areas where only ADSL is available, only one channel can be sent down the broadband connection. Those customers will pay 26 Swiss francs (US$20.90) per month instead of the full rate of CHF29 ($23.30).
All customers, though, have access to more than 100 TV channels, more than 70 radio channels, 500-plus movies from a video-on-demand service, live sports coverage, and up to 30 pay TV channels.
UPC Cablecom , the carrier's main rival that already offers a triple-play package, marked Bluewin TV's introduction with a statement that noted the delayed launch: "Today, Swisscom is launching its television over copper wire, which was announced as early as 2003. Cablecom welcomes competition in the sophisticated TV market, and wishes Swisscom all the best for the launch."
Roughly translated: Let battle commence.
For Microsoft TV, the launch will come as a relief, and provide it with another reference of a European service in production, following the recent launches by Deutsche Telekom AG (NYSE: DT) in Germany, which went live on October 17, and French ISP Club Internet , which launched in the summer. (See Club Internet Unveils IPTV and Microsoft Wins IPTV Deal at DT.)
Its next reference is due to be BT Group plc (NYSE: BT; London: BTA), which says it will launch its BT Vision IPTV service "this Autumn," which, the carrier points out, lasts until December 22. (See BT Unveils IPTV Service.)
— Ray Le Maistre, International News Editor, Light Reading
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