FTTH could tip competitive landscape in favor of telcos, says iSuppli analyst
Sep 11, 2007 11:10 AM
IPTV Update: What measures do you anticipate cable MSOs will take to counter triple- and quad-play threats from telcos throughout the next few years?
Steve Rago: That’s the million-dollar question. One, there will be much more switched digital video, allowing many more video-on-demand services than they have today. To do that, they’ll figure out ways of reducing the bandwidth required to handle broadcast to a given group of customers, and, therefore, free up bandwidth so they can do more video on demand. So, there are some new technologies there.
There has been some talk of using the DOCSIS 3.0 standard and providing video on demand over their IP network, if you will. There is some talk of that, but I am a bit skeptical of that succeeding. Their first step will be to free up the given bandwidth occupied by broadcast and provide more video on demand in that bandwidth.
IPTV Update: You note that consumers’ perception of the quality of telco video is a gate telcos must pass before becoming a competitive threat to cable MSOs. What do you see right now as the general consumer perception of telco video?
Steve Rago: It’s actually pretty good. I say that indirectly. I’m hearing that directly from the telcos themselves and the OEMs who are supplying the telcos. The third leg of that stool is the significant take rate certain telcos have experienced when they started offering video.
I think that they have proven that they can provide a good consumer experience. The question in my mind is if they can do it as they start scaling from hundreds of thousands of customers to millions of viewers. Scaling still has to be proven; there may be some room for innovation in the telco world.
IPTV Update: How will increasingly scarce bandwidth for the cable MSOs play into the competitive situation with telcos, particularly with the increasing number of HD channels MSOs are carrying?
Steve Rago: What I understand is happening is that the cable people realize that as they fill up the pipe and send it to 1000 homes or 500 homes, at any given instant, only a fraction of that broadcast actually is being looked at. So, they’ll use switched digital video scheme, populating the pipe with only the programs that are being watched at that time and thus free up a good deal of the pipe for video on demand.
It looks like, on the surface at least, that it is a very doable technology, so I don’t see any problems there. Whether or not they can get to where the potential telcos can with pure IP and switched digital programming, that remains to be seen. I think that is still quite a few years out.
For example, if you’re in the United States and you want to watch the Brazilian soccer game as it is happening, it’s very real that in an IP world with switched digital video you can get real-time access to that video. Obviously, a lot of infrastructure has to happen, but there is nothing to preclude that, and you can scale it infinitely. In the cable world, that becomes very problematic. You can’t scale infinitely. Now, you need to use DOCSIS 3.0 or change the way you distribute video.
IPTV Update: Is there anything else you’d like to add?
Steve Rago: I think the cable people have to take a look at the fact that worldwide, many homes are being serviced for broadband from the telco, and a large percentage of those homes have sufficient bandwidth to provide video.
I think that it’s just a matter of time before telcos could start servicing more customers than cable does. What that means is that the telco people will become very proficient at doing that. They eventually will have the kind of momentum to go head to head with cable and perhaps surpass it.
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