IPTV Generating Big Decisions, but No Big Telco Money Yet
LAS VEGAS -- Telcos are only beginning to spend money on IPTV and next-generation networks, but they're starting to decide how, vendors said on the show floor at the TelecomNext convention here. “The big money will be spent over the next few years,” Anne Coulombe, SeaChange dir.-product mktg., said: “This is still nascent, but the big decisions are being made now.”
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Bells have announced IPTV deployments -- mostly small trials, vendors said. Verizon is among the big movers but has rolled out service only in about half a dozen places. AT&T has placed orders for IPTV set-tops with Scientific- Atlanta and Motorola, but those purchases aren’t believed to be large, officials said.
The rollouts aren’t all hype, some vendors said. “This certainly is the hype stage,” said Todd Waters, S-A dir.- business development. But telcos have been “pretty good” at previous rollouts such as high-speed Internet, paging and VoIP, he said: “They are heavily motivated. They have to do something because cable is coming out strong.”
Bells have spent heavily on core infrastructure that will ease the move to next-generation networks, Dana Rasmussen, Siemens senior vp-gen. mgr., next-generation business unit, said: “This is absolutely a real buildout. A lot of money is being spent on it.” Bells have been the biggest spenders, he said, and “the main driver is IPTV.”
Bells are still “kicking the tires” on IMS, Rasmussen said, “but they recognize they have to do it.” He predicted IMS orders will be “coming on fairly quickly,” likely in 6-12 months. Rasmussen told us the new services will launch first in “pockets,” but “once they work out the kinks it will go mass market.”
N. America is behind Europe in IPTV rollout, and Asia is coming up quickly, Coulombe said. SeaChange has deals with NTT, MTS, Telus and others, and there are IPTV deployments in France, England, Italy and Belgium. A big spur, she said, will be games over IPTV, taking advantage of installation of the technology to deliver video.
S-A, a long-time vendor of cable set tops, is “excited” to have a new market among telcos, Waters said, especially since S-A is “selling expertise we already have.” He said there are about 70 IPTV deployments, though most remain small. But software from Microsoft and others is only now becoming available, he said, calling a ramp-up likely. S-A plans to deliver its first full-production IPTV boxes within days, with output hinging on demand. “Whatever the market demands” in production rate, “we can meet,” Waters said.
Cable eventually may need to switch to IPTV to compete, Waters said, but it will have difficulty figuring out how to deal with its installed base of legacy MPEG-2 QAM RF boxes. Cable likely will begin IPTV trials soon, he said, but “it will be a while before the cable guys embrace and roll out something new on a large scale.”
Cable firms are making a “tremendous investment” in DVRs and HDTV, Rasmussen said: “There’s a bit of a horse race for who can deliver more channels quicker.” He also said cable is very interested in IMS.
A market is emerging for selling IPTV equipment to eBay, Google and EarthLink, Rasmussen said. “They share a lot of cable attributes,” Rasmussen said: “They're aggressive and tend not to analyze a thing to death before they pull the trigger. As a vendor, they're a tremendous opportunity, and an increasing focus for us.”
TelecomNext featured dozens of IPTV product vendors. They included firms from outside traditional telco, like S-A and SeaChange, plus monsters like Microsoft and multiple small vendors offering pieces of the IPTV puzzle. Asked if old-school vendors like Siemens see rising competition offsetting increased opportunities, Rasmussen said he isn’t worried. He said the bursting of the telecom bubble a few years ago got many buyers to focus on vendors with a long record of stability. He also predicted new entrants, including Microsoft, will face new challenges of network reliability telco vendors have long experience with: “When you step into the carrier space, it comes with a lot of big issues.” -- Michael Feazel
TelecomNext Notebook…
Debate on whether Bells’ IPTV services should meet buildout requirements in cable franchises heated up in a panel discussion at TelecomNEXT in Las Vegas late Tues. NCTA Gen. Counsel Dan Brenner offered to “put my hand out in friendship” to work with Bells on a resolution, saying he hopes the Bells would “put your hand out in friendship and say there shouldn’t have to be different rules.” The problem is that buildout is “code for the ugly word ‘redlining,'” Verizon executive John Raposa said: Discussions start, “the slur comes and then off we go.” “Buildout is a federal requirement” to ensure service to all, said Elizabeth Beatty of NATOA. Raposa said no federal law requires buildout to fit boundaries set by local franchising authorities. Verizon’s obligation is to serve first the customers in its current service area, he said. ----
IPv6 is “a bad solution to a nonproblem,” Todd Underwood, chief operating and security officer of Renesys, said at a session here. Lack of deployments, despite “massive hype,” means “the market has spoken: This is the wrong technology at the wrong time,” he said. IPv6 was arose from a belief that IPv4 addresses were running out, but the problem was solved by technology and address allocation policies, Underwood said. Now IPv4 addresses won’t run out before 2013, he said. IPv6 was also said to be more secure, but Underwood said that’s “demonstrably untrue.” As a result, he said, the only ones pushing IPv6 are vendors trying to sell replacement gear. ----
Siemens made several equipment announcements, including: (1) An IMS fixed-mobile convergence solution allowing sharing of multimedia applications across mobile, broadband and fixed networks. (2) Next Generation Exchange Plus technology that allows termination of trunk lines into next-generation networks. (3) Introduction of its Surpass carrier Ethernet products, already in Europe, in the U.S. market. ----
Motorola demonstrated its ability to deliver HDTV over a WiMAX-like technology, sending it across the show floor. The signal was sent using Motorola’s 5-year-old Canopy wireless broadband technology, but officials said it mimics WiMAX since it’s also OFDM. Boxes for WiMAX are ready for market as soon as spectrum for WiMAX is selected for the U.S., though they could be deployed by midsummer outside the U.S. ----
Thomson introduced its IP2000 series of MPEG-4 IP set- top boxes. IP2000 uses system-on-a-chip technology, and members of the family will be able to carry either standard definition or high-definition programming, it said.