|Africa and the Middle East 2006
|Broadband and digital TV – new cultural dimensions
|Neil Gaydon and Mike Tometzki
|Chief Executive Officer, New Business Development Manager
|Pace Micro Technology
Neil Gaydon is the Chief Executive Officer of Pace Micro Technology. Prior to this appointment, he served on the company’s board as Executive Director and as Sales & Marketing Director responsible for corporate strategy, global sales, marketing, technology, and product management. Mr. Gaydon has also served as the President of Pace Americas, as Regional Director EMEA, as Head of Product Marketing and, originally, as Head of Worldwide New Business Development. As the Environmental Management System representative on Pace’s board, Mr Gaydon ensures that environmental concerns are addressed at the company’s highest level. Previously, bbefore joining Pace, Neil Gaydon worked for 10 years as a senior executive in the Hi-fi industry Mike Tometzki is Pace Micro Technology’s New Business Development Manager and part of the Pace European team. Mike has over 17 years’ experience within high technology sectors and, before joining Pace’s European team, Mike was the Company’s Head of Product Management. Prior this Mike’s other roles at Pace have included Satellite Divisional Product Manager, ,Engineering Team leader and Senior Hardware Engineer. Before joining Pace, Mike held a variety of research and development roles in industries from defence to semiconductors and aeronautical. His roles have included senior Research engineering and project leads at GEC Research (Engineering Research Centre, Whetstone, UK) where he joined as sponsored student/ graduate.
In Africa and the Middle East, locally generated content distributed via broadband can play a vital role reflecting local culture, interests and needs. The growth of broadband networks, progress in compression technology and speed, and the use of cost effective IP-enabled devices will significantly accelerate growth and commercial opportunities. In addition to content and technology, challenges such as digital rights management, quality of service, regulatory questions, and local loop unbundling to encourage local competition, must still be resolved.
The launch in December last year of the first HDTV station in the region at the Middle East Broadcasting Show, MEBSHOW in Beirut, was a landmark in the history, and a demonstration of the rapid growth, of digital technology in Africa and the Middle East. It demonstrated a commitment to the new and exciting developments digital television can offer, and once again reinforced the prevailing view that successful economic growth is reflected in the scale of activity of high-tech consumer products. This trend provides a unique opportunity for broadband to enrich the customer user experience by complimenting traditional broadcasting fare with the sort of content available for narrowcasting. This will ultimately mean the generation of a greater amount of content that will reflect local interests and meet local needs. Once these two factors are combined, it will undoubtedly result in a tremendous growth of culturally rich material. To state that digital television is strong in Africa and the Middle East is an understatement. There are now around 200 free-to-air satellite channels and 100 pay TV channels – via Showtime, ART and Orbit – in the Middle East alone, and 45 new satellite television channels on Nilesat and Arabsat. Al Jazeera has announced that it will be broadcasting in HDTV and ART will offer coverage of the World Cup in high definition. Current figures show that there are over one million pay television subscribers in the Middle East. While, in comparison, the number of broadband subscribers in Africa and the Middle East is still comparatively small, (Algeria, Egypt, Morocco, South Africa, Bahrain, Jordan, Qatar, Saudi Arabia and United Arab Emirates being the leaders) the number of operators – and the subscription base – is set to rise exponentially over the next five years, bringing with it an unprecedented commercial revolution. Broadband will, therefore, move from being a luxury to a necessity for both businesses and individuals. This presents a tremendous opportunity for the region to leapfrog existing technologies, use more cost effective IP-enabled devices, and provide significant global commercial opportunities through widespread and extensive communication. With such a fast pace, it would be easy for broadcasters to simply provide a service of imported entertainment shows. However, the challenge for both broadcasters and the fledgling IPTV providers must be to develop programmes that reflect the culture richness of the area. Some operators have already begun this process. Fawasel TV, based in Dubai Internet City and launched in April of this year, reflects the commitment to culturally orientated content. They have announced that 4000 hours of documentary content will be on offer and much more will be created locally. There is no doubt that to enrich the consumer experience all operators throughout Africa and the Middle East will essentially follow this pattern. The need for cultural contribution in the digital television sector is considerable. Over the next five years, the so-called quad play of voice, data, video and mobile will become a reality and the major telcos and ISPs will be conveniently placed to take advantage of its growth. By providing locally originated content, the fundamental need to provide real viewing choice will have to be met; the wide variety of new facilities technology can offer will make this much easier to achieve. To fully exploit the potential for broadband, companies are currently working hard to overcome a number of obstacles. The key one will be the physical constraints of building networks that are capable of delivering the speed and bandwidth to meet future requirements. The progress in compression technology (MPEG-4) and speeds (ADSL2+) makes it much easier today to start from scratch with the most advanced, leading edge, technology. Economics dictate that broadband penetration has to reach critical mass to be viable. It will take time, but there is no doubt that one can realistically expect it will take at least five years to achieve this. For video, the target market will be customers, particularly those in multi-dweller units, who cannot get digital television by satellite or cable, but will be able to get IPTV. This alone presents a huge opportunity. As the number of households that own a computer increases, there is a proportionate increase in the opportunity to target these households as a market for bundled package consisting of television, data and the Internet. There will still be a great deal of work to do to ensure a smooth launch for the full range of services including video delivery. The issue of rights ownership has to be amicably negotiated between the owners of the broadband service and the content owners. Digital rights management is naturally of concern – content owners still do not trust that IP-based broadcast solutions, content programming and digital rights management can match existing offerings and systems. Quality of service, QoS, is also extremely important. The regulation of the new technologies is still unclear; there are many questions, such as, ‘Should the new services be regulated as data or cable?’. Local loop unbundling, to encourage local competition, is also a challenge that will require considerable effort to overcome. There is also limited confidence that today’s billing mechanisms can match the ambitions of the operators. There is no doubt that these obstacles within the region will be overcome over the next five years and, as they do, the scale and scope of broadband subscriptions will rise exponentially. As this happens, the sophistication of high-end products will become increasingly important. There will be a paradigm shift in broadband over next five years. Operators, instead of using dumb terminals for data only as an extension of the network, will migrate to products that extend their service delivery capabilities to video, voice and possibly mobile. Therefore, a family of products from basic set-top boxes to personal video recorders (PVRs) and home servers, with increasing functionality to meet consumer demand for features and benefits, is essential. With these services on offer, operators will be in a position to engage in generating local content, and strive to differentiate their offerings from the competition by providing specific, special, rich content to reflect the background of its consumers. In such circumstances, the local culture can be the only winner as ‘a la carte’ programming – narrowcasting in its purest sense – meets the needs of the individual in his or her country. In addition, there will be the need for the seamless introduction of IP connected devices, by means of which content enters and leaves the home over many devices, and from many sources. These devices will of course take many forms such as games, audio devices, portable media devices and the like. Significantly, by 2010 it is estimated that of the 352 million connected IP-enabled home devices sold in that year, 45 million will be cell phones, reinforcing the wisdom of operators going down a quad play route. Increasingly simplified connectivity will aid the successful rollout of broadband services. At the moment, wireless networks are sufficient for voice and data around the home, but a great deal of research and development is devoted to determining how to network video around the home. On the table today are five real options: via existing coaxial cable; wireless/ WiFi – still in the early stages for video and currently lacking robustness – Ethernet; Ethernet-over-Powerline; and over-the-telephone wiring. As the networked home becomes more prevalent over the next five years, technological advances will, without doubt, drive the demand for utilising broadband to an ever greater extent. One final issue, worthy of further development and of monumental importance to the broadband industry, is the potential effect of disruptive business models for triple play delivery. Companies such as Google, Yahoo, Bit Torrent, Vonage, Skype and Akimbo each offer an alternative to traditional IPTV offerings. If these companies achieve the level of success in video that they have elsewhere on the Internet, they are potentially capable of distorting the market considerably. Therefore, the suppliers of the right products for broadband operators will be operators that have comprehensive credentials. A huge wealth of experience with in-house development of leading edge technologies – DVB, MPEG-4, HDTV, etc – is fundamental. In addition, vendors must understand partnership integration throughout the digital delivery chain. Furthermore, a pre-requisite for helping broadband operators achieve their goals will be suppliers who not only understand the need for pure IPTV boxes, but also for “hybrid” home devices offering cable, satellite or digital terrestrial television – DTT. Significantly, there will also be a need to understand and nurture a partnership with the customer, not only for the short term but over many years. In short, the opportunity for the region to drive broadband has never been brighter than it will be over the next five years. Ultimately, however, the operators’ success will depend on the extent to which they can create content which celebrates and reflects their surroundings, rather than merely transmit generic programming available everywhere else. This new period is going to be exciting, with technology and content teaming together to give a unique, unprecedented, user experience in the Africa and Middle East region.