While cable operators in North America are gearing up for interactive TV, addressable advertising and the move to all digital, their counterparts abroad are tinkering away on their own respective projects.
To be sure, reclaiming or adding bandwidth is a universal mandate, occasionally necessitated at several points during every cable operator’s lifespan, but competition and consumer appetites can vary from country to country or region to region.
Because the competitive pressures differ from market to market, cable operators elsewhere in the world are sometimes more eager to try and deploy new technologies (some of the first implementations of DOCSIS 3.0, for example, were in Asia).
And where cable dominates video and broadband in North America, phone companies hold the lead in many other regions; MSOs outside of the U.S. naturally must be a little more experimental with business models. Whether for technology or business, there is intelligence to be gleaned from the activities of cable’s international cousins.
JAPAN: A NEED FOR SPEED
Most Japanese data subscribers are steeped in the use of technology and have an almost insatiable craving for faster data speeds. When you layer in intense competition from fiber-to-the-home service providers such as NTT, it’s clear that Japanese cable operators have to be on top of their game to win and keep their customers.
In order to meet the above demands, Jupiter Telecommunications (J:Com) launched a 160 Mbps data service using pre-DOCSIS 3.0 gear from Arris more than a year ago. The channel-bonded 160 Mbps speed was a shot across the bow of the FTTH service providers.
“Japan leads the world in bandwidth at 160 Mbps, and I would say it also leads the world in the demand for bandwidth,” said George Fletcher, Arris’ senior vice president of Asian sales operations. “The fact that one operator was smart enough to launch, with our product, pre-DOCSIS 3.0 set a de facto standard of 160 Mbps. That’s something that most of the other operators felt they had to shoot for – and they have.”
While Comcast and Vidéotron both kicked off the DOCSIS 3.0 party last year in North America, albeit with top downstream speeds of 50 Mbps, there are more than 30 service providers in Japan that are offering 160 Mbps services.
For J:Com, which is operated by Liberty Global, the investment in the faster speeds has not only kept subscribers from wandering into the arms of another operator, but has also helped increase its number of data subscribers. In March, J:Com said it had just over 1.5 million high-speed data customers, which was a 21.1 percent year-over-year net increase.
“In Japan, we have been aggressively deploying DOCSIS 3.0, as well as pricing it competitively,” said Liberty Global senior vice president and CTO Balan Nair. “This has resulted in 28 percent of our new subscribers opting for our 160 Mbps product. The pricing for it is at 6000 yen, or approximately $65.”
The increased competition means that Japanese service providers have different pricing structures for the faster data speeds. While Comcast’s Extreme 50 tier – with download speeds of up to 50 Mbps and upstream speeds of 10 Mbps – costs $139.95 per month, Japanese operators aren’t charging a lot more for their faster tiers compared with the slower ones.
“If you look at companies like J:Com, which is a customer of ours, they’re only charging around $5 more for the highest tier, and that’s because of the competition,” said Floyd Wagoner, Motorola’s director of global product marketing. “With all of the telcos connected via fiber-to-the-home, it’s more about attracting and maintaining your customer base than anything else for the cable operators. They probably look at it more as the ability to retain their customer base versus revenue.”
In March, Japan Cablenet Ltd. (JCN), the country’s second-largest cable operator, started wide-scale deployment of its 160 Mbps high-speed data service across its cable system footprint. Using Arris’ equipment, JCN also laid claim to being the first cable operator to use DOCSIS 3.0’s upstream channel bonding for increased throughput rates.
“Upstream channel bonding is going to be a popular tool, I believe, for cable operators in Japan,” Arris’ Fletcher said. “Upstream channel bonding can have a big role in serving MDUs, and when you consider that probably 70 percent of Japan’s population is vertical, the ability to bond channels upstream is a real advantage for them. It will allow them to use different modulation schemes that will give them enough speed.”
According to Arris’ Junichi Kato, partner account, senior manager of business development, Japanese cable operators are just starting to look at switched digital video as a precursor to that country’s mandated move to digital in 2011. Kato also said that there hasn’t been much interest to date in moving to 1 GHz plants in Japan.
IN KOREA, TRU2WAY IS OLD HAT
While tru2way is marching forward like a tired foot soldier in the United States, the technology has been deployed for some time in Korea.
Jeff Bonin, Alticast’s general manager and vice president, said cable operators in Korea have been toying with tru2way, or OCAP, since 2005 when they moved from analog to digital.
“As they transitioned from analog to digital, they transitioned right into tru2way, right into full DOCSIS and into DSG (DOCSIS set-top gateway) for the back channel, so they have a lot more capability in their environment than we do here in the United States,” Bonin said. “Because of that environment, they launched a lot of interactive services immediately, in addition to just the basic guide and services.”
CJ CableNet’s tru2way platform from Alticast, which provides middleware and builds applications for service providers, includes interactive weather, real estate information, t-commerce, travel info and reservations, movie information and tickets, and karaoke. Bonin said the karaoke service is very popular in Korea, and it’s a service that cable operators can charge an extra monthly premium for.
“They are in the process of rolling out some HD DVR services, some higher-end set-top boxes and transitioning to the latest version of the tru2way specification,” Bonin said of Korean cable operators. “The market there is definitely more technology-savvy than your typical U.S. household. There was a lot of competition from a digital satellite provider there who was providing a lot of interactive applications, so rolling out the tru2way platform was one of the things cable operators needed to do to stay competitive.”
Bonin said the tru2way platform has started to pick up speed in Korea now that satellite providers have started offering HD services and more interactive applications.
“The telcos have also launched their own digital and HD services to compete with cable and satellite, so now there’s a renewed interest in making sure that all of those digital interactive services get launched much more rapidly on all of the platforms,” Bonin said.
LIBERTY GLOBAL BOOSTS DATA SPEEDS
Liberty Global cuts a wide swath through Europe. Through its UPC Broadband division, Liberty Global is active in 10 countries in Europe, offering video, broadband Internet and telephony services to more than 9.4 million customers. UPC Broadband operates cable networks in Western Europe (the Netherlands, Switzerland, Austria, Ireland) and Central and Eastern Europe (Poland, Hungary, Romania, Czech Republic, Slovakia and Slovenia).
And if that’s not enough, Liberty Global also owns a controlling interest in Telenet in Belgium. In most of the countries Liberty Global serves, it’s the largest cable operator in terms of subscribers.
While European data subscribers aren’t clamoring for speeds as fast as the ones already deployed in Japan and Korea, Liberty is pushing the pedal down for accelerated speeds.
“We have also deployed DOCSIS 3.0 in the Netherlands with a 60 Mbps and 120 Mbps product,” Liberty Global’s Nair said. “We are expanding that across Europe this year. While there are no applications that would tax such bandwidths, it does provide a better experience for certain applications, such as video downloads – especially HD.
“The other big effort we have going is to deploy a next-generation application on our set-top box that provides for a seamless experience across VOD, linear, DVR and Web content. All this wrapped around a residential gateway-type configuration, supporting DLNA and appropriate link protections.”
Nair wouldn’t say what the next-generation application was in the works for deployment on the company’s set-top boxes.
Karl Tempest-Mitchell, Advanced Digital Broadcast’s senior vice president of cable business development and sales, said Telenet was the first cable operator in the world to deploy the Globally Executable Multimedia Home Platform (GEM/MHP) standard, which is similar to OCAP, as a middleware platform. Tempest-Mitchell said Telenet deployed ADB’s MHP offering in order to gain an advantage over its competitors, and to “give them access to application developments.”
“They are moving toward the people who are doing VOD services and gaming,” Tempest-Mitchell said of Telenet.
In the United States, cable operators such as Time Warner Cable have worked on getting their electronic program guides up and running in a tru2way environment before embarking on other tru2way applications and technologies.
“I think that’s one of the prime differences between the Europe and the U.S. markets,” said Jim Lomax, ADB’s executive vice president of worldwide sales and marketing.
“The U.S. market seems to be driven by what the operator’s guide is, and that’s the thing that is downloaded first. In Europe, a lot of operators will start with a fairly simple EPG and develop from there. It’s more about the services, content and other applications they’re launching, and then the EPG.”
Lomax said cable operators in Europe, such as BSkyB, are fully engaged in deploying PVRs, particularly HD PVRs, into customers’ homes. Those who aren’t deploying PVRs are looking at “catch-up TV,” which allows customers to view shows that are stored on a cable operator’s network.
While Cablevision has been locked in a battle to let its subscribers store their selected content on its network, catch-up TV stores all of the shows and programs for up to 14 days.
“Catch-up TV is a free service because it’s more for customer retention to reduce churn,” Lomax said, “but they see it as vital to their businesses where they don’t have PVRs yet.”
LATIN AMERICA STILL EMERGING
Latin America is such a diverse area of countries, regulations, technologies and cultures, especially with the Caribbean islands thrown into the mix, but there are a few generalizations that ring true.
Alejandro Couce, Sigma Systems’ director for the Caribbean and Latin American region, said there has been a lot of consolidation in Latin America over the past few years. On that note, Sigma has been working with cable operators to pull together a common OSS/BSS platform as smaller cable operators are bought up by larger ones.
“With all of the mergers and acquisitions, we’re working with companies on breaking down the silos of voice, video and data, because a lot of times that information is dispersed,” Couce said.
Increased data speeds are also top of mind for some cable operators in Latin America. Earlier this year, Motorola announced that Net in Sao Paulo, Brazil, would be deploying its DOCSIS 3.0 cable modem and CMTS. While Net could hit the 160 Mbps speed mark, for now the data service is topping out at 60 Mbps on the downstream.
“In Latin America, the average broadband environment is around 1 megabit,” Motorola’s Wagoner said. “There hasn’t been that Asian-like experience like in Japan, Hong Kong and Korea, where they have those ultra-fast broadband rates. Latin America is 1 megabit for a reason; there’s not an advanced broadband environment down there.
“With our [BSR 6400] TX32 card, the downstream capacity is more affordable, and they position themselves so they can eventually bond channels, but right now there’s no consumer demand for faster speeds given the average broadband environment is 1 megabit.”
John Dahlquist, Aurora Networks’ vice president of marketing, said a lot of the RF plant that was removed during HFC upgrades in the ’90s in North America found a new life in Latin America.
“A lot of the systems in Latin America were built with 450, 550, 750 MHz RF,” he said. “We’re finding that a lot of them are upgrading those networks and going immediately to a fiber-deeper architecture. One of the reasons for going fiber deeper is that your service areas are about 100, 150 homes per node, so you have a lot of bandwidth per subscriber.
“Fiber deeper is really HFC without all of the RF amplifiers, so you not only save on the cost of RF amplifiers, you also cut down on your power bills. You have fewer places to power, and power stability is always an issue down there.”
Dahlquist said another benefit for fiber deeper is that without the RF amplifiers, cable operators don’t need to sweep or balance, which means the number of highly trained technicians can be reduced.
|Cable operators abroad: A look at some of the numbers|
Japan: Jupiter Communications (J:Com) is Japan’s largest MSO. As of March 31, J:Com serves 3.2 million households through 24 consolidated franchises and 48 systems. For the year, J:Com added 466,500 subscriber households, which was a 17 percent increase since March 21, 2008. On the high-speed data side, 28 percent of its subscribers have opted for its DOCSIS 3.0-enabled 160 Mbps service since it was rolled out more than a year ago. J:Com added 261,600 high-speed data customers for a year-over-year increase of 21 percent.
Korea: In 2005, Alticast completed the world’s first OCAP/tru2way platform-based commercial deployment with CJ CableNet, a major Korean MSO that has 1.2 million subscribers. CJ CableNet has seven system operator (SO) affiliates, including Yangcheon Broadcasting, Kyungnam Broadcasting, Masan Broadcasting, Kaya Broadcasting, Jung-Busan Broadcasting, Buk Incheon Broadcasting and Haewoondae Broadcasting.
Europe: Telenet, which is controlled by Liberty Global, is the largest cable operator in Belgium, with operations in Flanders and the cities of Leuven and Brussels, the capital city. Telenet ended last year with more than 4 million subscribers for its digital TV, broadband and fixed telephony services, compared with more than 3 million customers in 2007. Aside from acquisitions, Telenet added 401,000 subscribers across its three service offerings. Telenet attributed the increase in its total subscriber numbers to the introduction of new bundled offerings, which it calls “Shakes,” in September of last year.
Latin America: Net Serviços de Comunicação is the largest cable television operator in Latin America. The company’s Net service had roughly 3.1 million subscribers as of December. Net also operates the broadband Internet service Net Vírtua, with 2.2 million subscribers, and telephone over cable (under the Net Fone via Embratel name), with 1.8 million subscribers.