IP Capsule - August 17, 2007

Thu, 08/16/2007 - 8:00pm
Brian Santo
   August 17 , 2007 
IPso Facto...

BPL? BPL!? BPL?!?!?
Cable operators and phone companies deserve all the competition they can get, but I am havingthe hardest time taking broadband over power line (BPL) seriously, and DirecTV's deal with Current Group isn't doing much to change my mind.

Brian SantoI spent 20 minutes digging around Current Group's web site trying to find out how fast its data service is expected to be, and came up with nothing more than something about how it's 75 times faster than dial-up and 25 times faster than some other unspecified data service. Such meaninglessness is unimpressive. I'm just saying.

It's just hard to get excited about what amounts to a DirecTV contingency plan should AT&T and Verizon start finding their cross-promotional deals with DirecTV superfluous, especially when the BPL network isn't up and running yet.

The Current Group is in the process of helping TXU Electric Delivery prepare its power line network to offer data services. Current Group calculates that DirecTV eventually – "over the next several Power Line Networkyears" – will have access to about 1.8 million customers in Texas served by TXU Electric Delivery.

DBS has been maintaining about a 30 percent share of the pay TV market, so DirecTV has a legitimate shot at only about 540,000 of those TXU customers. And then you've got to figure that a good chunk of those will have DSL, cable modem, or FTTx service, and won't be inclined to switch. Assuming that "75 times faster than dial-up" is competitive, I'd say an optimistic estimate is that DirecTV gets tens of thousands of customers, tops, over the next several years.


...And it's not as if other utilities have been enthusiastically embracing BPL elsewhere either, so there's not much in the way of immediate prospects for growth when it comes to DBS/BPL bundles.

On the other hand, it's not as if DirecTV (or EchoStar) have a lot of other options when it comes to broadband/VoIP partners. There's WildBlue, of course. The WiMAX companies probably won't need DBS partners.

Yeah, from the DBS standpoint, it's looking like BPL. Seriously.

— Brian Santo, IP Capsule Editor & CED Magazine Editor

Verizon combines Verizon Wireless into bundle billing
Verizon is drawing mobile telephony service from Verizon Wireless – a joint venture with Vodaphone – more tightly into its service bundle by adding all services onto one bill for the first time.

Verizon customers can sign up at a Verizon Wireless store for the integrated One Bill statement. Verizon claimed that combining all services on a single bill is not only convenient but that doing so is also (ready for it?) helps the environment by minimizing paper waste. Now that's marketing.

Trinity Convergence puts VoIP software on TI processors
Trinity Convergence said its VeriCall family of voice and video over IP (V2IP) software runs on Texas Instruments' digital media processors based on DaVinci its technology. The combination is intended to make it easier to design IP-based products that require hi-fidelity audio and H.264 video functionality. That can include VoIP phones, voice over WiFi (VoWiFi) phones, video phones, WiFi video phones, dual-mode phones (GSM/VoWiFi), VoWiFi personal media players, VoIP Intercoms, and remote IP video cameras.


Q2 broadband growth slows more than usual
With most of the public companies having reported, the second quarter of 2007 is now officially the least impressive quarter for broadband subscriber growth in three years, since the second quarter of 2004.

The nineteen largest cable and telephone providers in the U.S., representing about 94 percent of the market, attracted a net 1.7 million data customers, according to data compiled by Leichtman Research Group. The top broadband providers, in aggregate, added about 400,000 fewer net subs than in the second quarter of last year.

Broadband Internet Subscribers at end of 2Q 2007 Net Adds in 2Q 2007
Cable Companies    
Comcast 12,380,000 330,000
Time Warner 7,188,000 188,000
Cox* 3,545,000 60,000
Charter 2,583,200 60,300
Cablevision 2,168,000 50,000
Insight 674,900 18,900
Mediacom 613,000 13,000
Cable One 316,357 8,268
RCN 270,000 5,000
Other major
private cable companies**
1,780,000 60,000
Total Top Cable 31,518,457 793,468
Telephone Companies    
AT&T 13,253,000 398,000
Verizon 7,686,000 288,000
Qwest 2,405,000 100,000
Embarq 1,156,000 52,000
Windstream 752,600 37,200
CenturyTel*** 500,000 30,000
Citizens 479,317 15,262
Cincinnati Bell* 211,800 4,200
Total Top Telephone Co.'s 26,443,717 924,662
Total Broadband 57,962,174 1,718,130
Sources: The Companies and Leichtman Research Group, Inc.
* LRG estimate
** Includes LRG estimates for Bright House Networks and Suddenlink
*** CenturyTel includes Madison River acquisition
Totals reflect pro forma results from system sales and acquisitions
Top cable and telephone companies represent approximately 94% of all subscribers
Company subscriber counts may not represent solely residential households

The second quarter is usually slow, so Q2 isn't the time to make definitive statements about slowing broadband growth. But...

The companies tracked now combine for a total of nearly 58 million subscribers, with cable claiming about 31.5 million of that total, and telephone companies representing the balance.

Other key findings for the quarter include:

Charter was the only major broadband provider to record significantly more net broadband additions in the second quarter than a year ago

Each of the top telephone companies had fewer net broadband additions this quarter than in last year's second quarter, nonetheless, they still outdrew cable, this time taking about 54 percent of Q2 '07 new subscribers.

Shipments of DSL ports, CMTSs rise in Q2
That's the U.S. From a global perspective, the broadband/VoIP business has plenty of room for growth and continues to thrive. In the second quarter, global DSL ports crossed the 25-million mark, an increase of 16 percent year-on-year and 10 percent sequentially, and CMTS shipments rose 10 percent year-on-year and 3 percent sequentially, according to Ovum RHK.

"The DSL market grew strongly in 2Q07 on the back of a spurt in Asia-Pacific (shipments crossed the 10-million mark for the first time), particularly in the Chinese market," said Kamalini Ganguly, an analyst of broadband network strategies at Ovum. "In addition, there was continued demand from operators deploying IPTV and next-generation networks in North America and EMEA. Alcatel-Lucent and Huawei remained number one and two in the DSL market, with both vendors recording their highest-ever shipments."

In the CMTS market, Cisco remained the dominant vendor with a 50 percent market share on a rolling four-quarter basis, followed by Arris with 30 percent, Motorola with 15 percent and BigBand with 3 percent.

Covad Wireless announces sort-of T1 service
The Covad Wireless subsidiary of Covad Communications Group now has a 2 Mbps service, aimed at small and medium businesses. Covad Wireless is is pricing its Super-T service to compete with traditional T1 lines, which are defined at 1.544 Mbps. Pricing for the Super-T 2.0 starts at $399 for a three-year contract term and goes up to $429 for a one-year contract.

Company: Irdeto
Headquarters: Hoofddorp, The Netherlands
CEO: Graham Kill

Claim To Fame: Provides conditional access systems; partners with a wide universe of companies in the IPTV area.

Recent News Of Note: The company has had its greatest successes in international markets. Recent customers include Sun TV (India), Chengdu Cable (China), T-Mobile (Hungary), and Red Intercable (Argentina), among others.


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