TelcoTV, TelcoTV, TelcoTV. We figured if we said it three times fast, something magical might happen, sort of like on Beetlejuice. But alas, it hasn’t. A week after the TelcoTV show, we still are not convinced the basic fundamental answers about TelcoTV have been answered. It’s that same uncomfortable feeling we had with, oh, national 802.11 Wi-Fi network plans a la Cometa.
First, we should say that we absolutely agree with telcos who want to expand their fiber closer to the customer, increase customer bandwidth, and offer triple play services. Yes it will be hard to do, yes it will be expensive, but if nothing else, it gets telcos into the game against multiple system operator (MSO) competition (and in some areas, against the overbuilders, municipalities, developers and utilities who also are getting into fiber).
But – there has to be a but here, of course – we’re still struggling with the leapfrogging and value-added part of the equation. Where’s the pioneering going to take place? Or said another way, Is there money in ‘me-too’?
Early triple play pioneers were telling us years ago that they found that they needed to do one of two things to compete with cable MSOs in video:
1.) Be better for the same price.
or
2.) Be cheaper offering a comparable service.
We’re not seeing that this has changed much. People don’t necessarily love their cable company (or satellite provider). But they’re used to them. They’re comfortable with them. They need a reason to switch.
What this means for carriers is that they can either take the low cost (low revenue/low margin) approach out of the gates – which a few might do, but none would prefer, – or they can offer customers something that is better and different and maintain (or at least lead with) pricing that isn’t discounted to within an inch of its life.
There are two areas where telcos can probably stake a claim – at least in the near term – vs. cable: HDTV and Video on Demand.
Now we realize that MSOs are already offering both of these services in many of their service areas. But bandwidth and architectural constraints often limit these services in some ways. HDTV and Video on Demand are both bandwidth hogs, and although cable has a fat pipe with a lot of potential spectrum to be used, there are significant shared elements within the network.
We’ve recently seen announcements from a bunch of vendors that are aimed at providing telcos with a means of attacking these two video fronts.
Skystream ( and a bunch of partners like Calix, Amino and Myrio, to name a few) launched a system at TelcoTV called “PUSH VOD.” As the name implies, this system trades bandwidth for local storage capacity, and pushes the most popular content – including high definition movies – out to the set top box without requiring full HDTV bandwidth at the time a customer watches a movie. For bandwidth constrained telco networks (like today’s ADSL networks, and arguably even some ADSL2+ networks of the near future), this solution provides HDTV now.
A different approach is offered by UTStarcom’s new mVision TVoIP platform. Like PUSH VOD, mVision is enabled by the price/performance curve of storage, but with a critical distinction: the storage is in the network and not local. The mVision platform distributes multiple terabytes of video storage throughout the network – instead of concentrating it all in a single headend.
Combine this system with a higher bandwidth telco network (FTTH or neighborhood), and the result is a network which is optimized for “on-demand” streaming of just about any kind of content. For example, “network” content can be multicast to a number of users, but the local storage and caching allows any users to access network PVR functionality to pause or rewind – and drop into a unicast mode – without causing an excessive network resource demand that cascades into the metro core. The result is effectively Video on Demand for every channel (depending, of course, upon content owner restrictions).
Both of these platforms provide a vision for telcos looking to offer truly differentiated video services, instead of “me too” 150 channel basic/expanded/premium tier services that can only be price competitive.
The real point here is that telcos don’t have to buy into either of these vendor visions. But they’d better buy into something – because HDTV and Video on Demand remain top MSO priorities, and MSO networks are a moving target, not a stationary one. Spend two years coming out with that “me too” package, and you’ll end up two years behind the competition.
