 | Issue: | Europe 2006 |
| Article no.: | 13 | |
| Topic: | User-centric triple play: getting personal | |
| Author: | Monika Maurer | |
| Title: | President | |
| Organisation: | Fixed Solutions Division, Alcatel | |
| PDF size: | 92KB |
About author
Monika Maurer is the President of Alcatel’s Fixed Solutions Division, which includes solutions for voice and services, next-generation networks (NGN), triple play and enhanced applications. Before this assignment, Ms Maurer was Chief Operating Officer (COO) of the Fixed Solutions Division. She has also acted as President of Alcatel’s Voice Networks Division, General Manager of Alcatel’s Switching and Routing Division in Germany and Vice President of Alcatel’s S12 Mobile Core Network group. In addition, Ms Maurer has held numerous Research and Development positions within Alcatel. Monika Maurer holds a masters degree in Physics and Chemistry from the University of Stuttgart.
Article abstract
All-IP (Internet Protocol) networks with two-way communications between the television and the network will change everything. They merge voice, video, data and mobility into one service portfolio, provide operators with substantial savings and give them competitive advantages against digital cable operators and satellite operators. Letting consumers view whatever they want whenever it is convenient, providing video recorder functionality to pause and rewind live TV, video on demand and other innovative services, will all help operators gain and retain subscribers.
Full Article
A massive change is coming to television and it’s called Internet Protocol (IP). Combined with significantly increased two-way communications between the television and the network, IP will change everything. Remember when broadcasters switched from black and white to colour? Yes, it’s that big. For the past five years, telephone companies (telcos) have been investing in updating their network infrastructure from existing technologies – like time division multiplex (TDM) and asynchronous transfer mode (ATM) – to one based on IP. Why? Because moving to an ‘all-IP’ network offers capital expenditure (CapEx) savings which grow exponentially in relation to the size of the network and operational expenditure (OpEx) savings realised by replacing outdated and obsolete equipment. Having an all-IP network is ideal for service innovation that merges voice, video, data and mobility into one service portfolio that can be personalised for consumers. For telcos, IP provides the foundation for delivering multiple services over one network, including IPTV, providing them with a long-term competitive advantage against digital cable operators and satellite operators. What is IPTV? When defining IPTV it is important to point out what it is not; it is not TV over the Internet. TV over the public Internet is called streaming video. IPTV services operate over a private IP network and not the public Internet. It is true that these private networks use IP, but not in the same way. In a private IP network specifically designed for IPTV, telcos can ensure quality of service (QoS) for consumers. QoS guarantees are used to ensure that service disruptions are not experienced. For example, high priority is assigned to certain delay-sensitive traffic like voice and video (in that order), while a lower priority is assigned to best-effort services, like high-speed Internet. The IPTV market is gaining momentum. The predictions on just how many people around the world will make the move to IPTV are a matter of discussion: Infonetics Research predicts 53.7 million subscribers by 2009, while Light Reading and Pacific Crest forecast 65 and 75 million, respectively, by 2010. Alcatel expects 72 million IPTV subscribers by 2010. From the horse’s mouth: what users want Consumers don’t care much about network technology. Instead, they’re interested in the introduction of compelling new services, innovative applications and a better overall experience. End-user research studies have been conducted in an effort to better understand what users want. The studies have learned that consumers want a more enriching and personalised service mix that can integrate seamlessly with their communications, information and entertainment needs. When asked about their entertainment experiences, consumers were vocal in stating that they want to control their viewing choices. In other words, shift programming from a ‘push-based’ mechanism where broadcasters determine content and viewing times, known as ‘linear programming’, to a ‘pull-based’ model where consumers decide when, where and what they watch. The research also highlights user frustrations with slow channel change times associated with digital cable or satellite, the challenge of finding favourite shows on the electronic programme guide, or EPG, difficulties in navigating through menus and the inability to schedule the exact time to record their favourite programmes. It is precisely these concerns that form the basis for a service strategy that complies with the mandate of service providers. The good news is that consumers demand a better service proposition and in many cases are willing to pay for certain premium features that enrich their lives. Telcos are putting their money where their mouth is The network transformation required to deliver these services is in full swing. It is estimated that nearly all North American operators, some 80 per cent of operators in Europe and about 30 per cent in Asia are well into IPTV trials or deployments. In October 2004, SBC Communications (the second largest Telco in the United States) announced that it would spend nearly US$4 billion (€3.4 billion) as part of its Project Lightspeed initiative, designed to deliver IPTV and other feature-rich IP-based services. This is one of the most publicised announcements to date, but the move to IPTV is a trend that is being witnessed around the world. The migration to an all-IP platform offers telcos an opportunity to offer innovative new services that help telcos boost their average revenue per user (ARPU) and reduce customer churn rates. Increased ARPU Most telcos around the world are experiencing negative growth rates in their fixed voice business. Demand for high-speed Internet access, although still steady in some countries, is reaching a saturation point in others. Video services, the last piece of the ‘triple play’ puzzle, have the potential to significantly increase communications ARPUs. According to a November 2005 Light Reading Insider report, ‘IPTV: Where the Money Is’, telcos that have deployed IPTV services are experiencing incremental revenue increases. For basic video and video on demand (VoD) services, the increase is US$10 and US$9 per month, respectively. Other services, such as personal video recorders (PVRs) and high definition TV (HDTV) have the combined potential to contribute an additional US$16 per month. Triple play service package Another argument in favour of delivering a triple play service package is that multiple service offerings increase customer loyalty. Video services in particular are viewed as one of the most effective tools for reducing customer churn. The world’s largest IPTV deployment, with nearly 500,000 subscribers, is NOW Broadband TV. NOW Broadband TV has not only boosted revenues for Hong Kong-based PCCW, but has helped to reduce customer churn. According to PCCW, the loss of customer lines has dropped from a peak of 38,000 a month in 2003 to just 1,000 in June 2005. Making the move to ‘second-generation’ video services Despite the initial success of some basic triple play packages, many trailblazing telcos are re-evaluating their long-term business strategies as competitive pressures and intense price battles are rapidly commodifying their service. Their new challenge is to identify ways to build sustainable barriers against churn, even on triple play services, while exploring service innovations that will lure customers away from cable and satellite for reasons other than price. Offering IPTV, and other video services, can be a powerful revenue preservation tool. Nevertheless, simply competing on price puts telcos on a slippery slope and provides no real guarantees in terms of long-term profitability. If telcos don’t deliver more than a ‘me-too’ offer, it is difficult for consumers to distinguish one service from the other. Capturing viewers is dependent on the promise of delivering a better user experience that responds to evolving consumer demands, allows for the delivery of a more personalised service, and takes advantage of the convergence of voice, data, video and mobile services. This approach, which is sometimes referred to as ‘second generation’ triple play, will establish the foundation for building sustainable barriers to churn and will allow for the delivery of higher margin services. Delivering a ‘way better’ experience Based on feedback received in our end-user research, consumers want an improved user experience that includes: – Time-shifted programming where consumers take control of the programming schedule, moving ‘prime time’ to ‘my time’, the ability to view whatever programme they wish at a time of their own choosing; – Instant channel change that allows consumers to ‘zap’ their channels more quickly; – Improved navigation via the EPG, electronic programme guide, that makes it easier to find, watch and record their favourite programmes; – PVR (personal video recorder) functionality such as pausing and rewinding live TV; – VoD (video on demand) capabilities that allow consumers to select and order a film without having to leave the comfort of their living room. Innovative new services With an all-IP network in place, telcos can support high-bandwidth, two-way communications that allows consumers to send, not just receive, data. This is a distinction that is at the heart of service differentiation that allows nearly limitless service offerings and enhancements to how television programming is consumed. Some examples include: – Multiple camera angles: ideal for sporting events like cycling or auto racing, where there are many different things happening simultaneously; – Becoming part of the action: using their remote control, viewers can contribute to of a program’s outcome by casting votes (rather than calling a number or sending an SMS) or participate in a TV quiz show; – Online billing: subscribers can view a bill on the screen that includes all the details of their local and long distance telephone charges, as well as high-speed Internet and television services; – Sharing videos and messages: using their remote control, viewers will be able to send text messages through the TV, connect a video camera and participate in a videoconference. A more personal experience With IPTV, consumers will enjoy greater specialisation and personalisation than ever before, all delivered simply and seamlessly via a range of devices and networks. Some examples of a more personalised IPTV experience include: – Specialty programming: watch programmes tailored to your individual preferences; – Customised schedules: choosing when you want to watch shows and whether or not you want to watch commercials; – Personal content: sharing home movies and photos with a closed community of friends and family. Communications convergence As outlined earlier, an all-IP platform allows telcos to take advantage of the convergence of voice, data, video and mobile services, turning the TV into a ‘communications hub’ that will allow users to: – View caller information on the TV and route calls appropriately (either to a fixed or mobile phone, or directly to voice mail); – Access your EPG from a remote location to select and schedule recordings either through a mobile phone, PDA or a web-based interface; – Retrieve real-time statistics/data once reserved for Internet-based sites, track specific teams/players and stay informed about specific events; – Communicate with other viewers via the television using text, video cameras or voice over IP (VoIP). The importance of services integration When deploying video services, the single most under-appreciated factor is the need for integration skill sets. Telcos have a strong heritage of delivering voice and data services, but video-specific expertise is rare. Telcos must either build up their video skill sets or partner with IPTV experts to accelerate the learning curve. The latter approach is becoming the preferred strategy because time to market can be significantly shortened by leveraging installed assets and partnering with suppliers who have demonstrated experience in implementing video and other broadband entertainment infrastructures. To date, as a services integrator, we have conducted more than 30 IPTV projects around the globe bringing together the network infrastructure, software platforms and integration skill sets required to deliver on the promise of a better user experience. Today’s consumers expect to get the programmes they want, when they want. Broadband technology, IP networking, optics, new multimedia and video applications allow service providers to deliver consumers a unique and superior IPTV experience.
