IP Capsule E-newsletter, February 01, 2007

Thu, 02/01/2007 - 3:54am

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February 01, 2007

Brian SantoIPso Facto...

IPTV: Paying it forward?
There were just under 6 million homes worldwide at the end of 2006 tuning in to an IPTV service. But with IPTV taking hold all over the world (we've got news items from Hong Kong, Brazil, Colombia, Hong Kong and India this week alone - see below) that number should make a precipitous climb to more than 80 million in just five years.

Even if those 80 million are distributed across many countries, that still leaves room for some of the largest markets (Canada, China, India, the U.S., etc.) to attract several million subscribers each.

The percentage of households worldwide actually paying for IPTV services is only about 55 percent now, however, with about 3.3 million paying subs in 2006. The rate of paying customers is expected to stay close to that rate through 2011, with a projected 40.9 million in 2011, according to Strategy Analytics.

The firm suggests that revenue won't scale directly with user numbers, because many IPTV viewers will get video for free as part of a package of bundled broadband services.

One of the key questions is whether telcos will discount or even give away IPTV in their bundles, just as some cable MSOs heavily discount VoIP in theirs today. It might come down to how telcos structure their bundle offers.

"The jury is still out on how much consumers are willing to pay telcos for IPTV," noted David Mercer, VP and principal analyst at Strategy Analytics. "Most telcos will likely offer customers a mix of free, subscription and pay-as-you-go programming models."

Either way, the growth rate has to be cause for optimism for equipment vendors.

TandbergTV to power Colombian IPTV service
EPM Telecommunications UNE has decided upon encoders from Tandberg Television for its new IPTV service in Colombia. The company will use TandbergTV's iPlex Video Headend Platform to provide over 100 real-time channels, along with VOD.

PCCW to use Harmonic MPEG-4 encoders
Hong Kong provider PCCW is deploying Harmonic's new DiviCom Electra 5400 standard definition MPEG-4 AVC (H.264) encoders for its entire IPTV channel lineup. PCCW is using ICTV's ActiveVideo Distribution Network, but has been sourcing much of its other equipment from Harmonic. PCCW previously purchased Harmonic's Electra 5000 MPEG-2 encoders, and its VOD system is from Entone, a company Harmonic acquired in 2006. PCCW claims more than 700,000 IPTV subscribers.

Amino's AmiNET 125 set-top
Amino's AmiNET 125 set-top

Time Broadband to make,
use Amino set-tops in India

Time Broadband Services Pvt. Ltd. (TBSPL), which not only provides IPTV service in India, but also has a manufacturing arm, has agreed to build versions of Amino Communications' AmiNET125 set-top boxes for the Indian market.

The AmiNET125 is Amino's H.264 AVC (MPEG-4 Part 10) box. TBSPL is deploying an IPTV service called My Time. My Time also uses middleware provided by Kasenna and content protection from Verimatrix,

Brasil Telecom downloads Widevine deal
Brasil Telecom has tapped Widevine Technologies to provide downloadable conditional access and digital rights management systems for its IP-based video service. Brasil Telecom will launch the service on set-tops and media gateways, with plans to expand access to PCs and other IP-capable video devices, as well. Brasil Telecom has more than 10.8 million fixed lines installed.

Moto ships over a quarter-million IPTV boxes
Motorola said it shipped 270,000 IPTV set-top boxes in the fourth quarter. Motorola jumped into the IPTV box market with the acquisition of Kreatel a year ago. Motorola is providing IPTV boxes to several service providers worldwide, including AT&T. The numbers involved underscore that IPTV is a serious business, but still in its infancy.

Motorola digital video set-top unit shipments
Q4 (000)
2006 (000)
Overall Total
Digital Video Recorders (HD-Capable)
High-Definition Capable
IPTV Set-Tops

Ikanos, Jungo offer VDSL2/IPTV gateway reference
Ikanos Communications and Jungo have developed a reference platform for a Residential Gateway (RG) that combines Ikanos Fusiv chip and Jungo's OpenRG middleware. The Fusiv processor is backward compatible with ADSL2/2+ and VDSL1, and the pair claim the platform will deliver 100 Mbps symmetrical. OpenRG includes APIs to support data applications, plus IPTV, home networking, VoIP, wireless local area networking, Ethernet switching, IP-PBX and TR-069 remote management support, among other features.

Verizon reports 217,000 FiOS TV subs in Q4
Verizon Communications continues to lose phone customers, but also continues to make up for that with high-speed data services. The company lost 366,000 residential phone lines in the quarter, but reported a net gain of 409,000 broadband connections for a total of about 7 million. That included 165,000 customers for FiOS Internet. Verizon said FiOS Internet was available to 4.8 million homes with 687,000 customers.

Verizon added 89,000 subscribers to FiOS TV, for a year-end total of 217,000. Verizon said 2.4 million homes had access to FiOS TV at the end of the quarter.

Verizon earned just over $1 billion in its fourth quarter, down from $1.66 billion in Q4 2005. The acquisition of MCI helped pump up revenue to $22.6 billion, compared to $17.93 billion in the same period in 2005.

Wired and wireless data drive AT&T's Q4 higher
AT&T's high-speed Internet connections increased in Q4 by 383,000 to 8.5 million, up 1.6 million from the previous year. That just exceeded the 380,000 new high-speed customers netted in Q3. Those numbers combine DSL, U-verse and satellite services.

The total number of video subscribers to both AT&T | DISH Network and U-verse increased by 49,000 to reach 635,000. That compares to an increase of 53,000 in Q3. AT&T did not break out the number of subscribers to its U-verse service, which became commercially available in San Antonio last June, and then to limited areas in 11 more markets in Texas, California, Indiana and Connecticut only at the very end of the recently-completed quarter.

AT&T reported fourth-quarter net income was $1.9 billion, up 17.1 percent from the $1.7 billion reported in Q4 2005. Those results were lower than the $2.2 billion reported in its third quarter of 2006. Consolidated revenues totaled $15.9 billion, up from $12.9 billion in the fourth quarter of 2005.

GIPS expands into video, renames itself
Global IP Sound (GIPS) fully acquired CrystalVoice, purchased video codec technology from Espre Solutions, and has changed its name to Global IP Solutions (GIPS), a reflection of its widening its scope from IP audio to IP multimedia.

The purchase of CrystalVoice gives GIPS technologies that enables mobile access to corporate resources without going through a corporate VPN, and click-to-call without going through the PSTN. Espre's LSVX codec technology, meanwhile, will be integrated into GIPS VoiceEngine and ConferenceEngine products for both clients and servers.

Suddenlink taps VoiceLog for E911 notification services
Suddenlink Communications has contracted with VoiceLog to provide E911 notification and verification of notice. VoiceLog will be responsible for calling each of SuddenLink's new broadband phone subscribers to explain E911 service and the safety rules that accompany all VoIP phones, as required by the FCC.

Nearly 4 million migrate to VoIP in '06
The U.S. market for VoIP advanced dramatically in 2006, adding 3.8 million VoIP households in 2006, according to In-Stat. That number includes both facilities-based services from MSOs and peer-to-peer services from companies such as Skype. The overall acceleration in the market is beginning to push wholesale VoIP revenues. In-Stat calculated wholesale VoIP revenues were $1.1 billion in 2006, and projected growth to $3.8 billion by 2010.

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Continuous Computing products prep the way for IMS
Continuous Computing has introduced three new AdvancedTCA (ATCA) products that can be used to build IP Multimedia Subsystem (IMS) networks. They include the FlexCompute compute blade, the FlexCore base-fabric switch, and a newly optimized FlexChassis. Continuous also introduced its Trillium session initiation protocol (SIP) and Diameter protocol software. Continuous CEO Mike Dagenais said, "Our cost-competitive bladed compute system will help customers monitor session control and security as NGN and IMS deployment evolves, allowing telecom equipment manufacturers to gain market traction faster and at lower costs."

Moto, TI to codevelop 3G, WiMAX products
Motorola and Texas Instruments are expanding their strategic relationship in order to co-design and co-develop 3G, WiMAX and OMAP technologies for mobile devices. Motorola is currently developing 3G handsets that will incorporate customized processors based on TI's OMAP 3 architecture. Handsets using this solution are expected to hit the market as early as 2008. TI is also helping Motorola develop a customized, low-power version of mobile WiMAX technology suitable for mobile devices that Motorola plans to launch also in 2008.

Towerstream, Speakeasy form wired/wireless service partnership
Towerstream and Speakeasy have signed a distribution agreement that marries the former's wireless pre-WiMAX network with the latter's fiber-based network. Both companies focus on the small and medium business (SMB) market. Speakeasy will be able to sell services on Towerstream's wireless networks in New York City, Los Angeles, Chicago, San Francisco, Seattle, and the greater Boston, Providence and Newport, R.I. areas. To seal the deal, Towerstream bought Speakeasy's wireless network in Seattle, one of the first WiMAX testbeds. The purchase price was not disclosed.

Verizon wireline sale opposed as a redlining tactic
The unions representing some Verizon employees are opposing the company's plans to sell 1.6 million local access lines in Vermont, Maine and New Hampshire to FairPoint. They say Verizon is simply trying to avoid the expense of rolling out advanced services in the three still mostly rural states.

FairPoint would assume $1.7 billion in Verizon debt while transferring more than a billion dollars in FairPoint stock to Verizon stockholders. Verizon would maintain control of the company with 60% of the stock and six of nine of the directors, plus gain tax-free status for the "merger."

The structure of the deal will leave tiny FairPoint "saddled with billions of dollars in debt and a very small margin for innovation," said Edwin D. Hill, president of the International Brotherhood of Electrical Workers. FairPoint won't be able to afford to expand DSL coverage, let alone compete with FiOS in more populated areas.

"Verizon is essentially redlining the rural areas of Vermont, Maine and New Hampshire, using accounting tricks to pass them off to a much smaller company that will not commit to delivering broadband to these same communities," Hill said.

USA Today offers a high-level, philosophical viewpoint of the conditional access issue. Based on an interview with FCC Chairman Kevin Martin, and including a reference to the Carterphone decision.

Current Issue

February 2007
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Company: Bitband
Headquarters: Incorporated in U.S., with main facility - an R&D lab - in Israel.
CEO: Ervin Leibovici

Claim to Fame: Bitband provides video content distribution and delivery solutions over IP broadband networks for telcos, enabling IP-based VOD and nPVR. Its products include the Vision family of appliance-servers, its Maestro content distribution and server management technology, and its SecureStream content protection product. The company is successful enough on its own to not be confused with BigBand.

Recent News of Note: Bitband has racked up sales in Europe and Asia (customers include FastWeb in Italy, Canal Digital Sweden, Magnet Networks in Ireland and Agder Energy in Norway), but is still trying to get a firm foothold the U.S. market. Recently signed up Israeli satellite operator "yes", and also cut a deal to interoperate with mPhase technology. The company previously established interoperability with Latens and Minerva.


Broadband Futures Seminar
Austin, Texas
February 6, 2007
More information: Click Here

IPTV World Forum
London, England
March 5-7, 2006
More information: Click Here

The Connected Home
March 5-7, 2006
Olympia London, UK
More information: Click Here

TV Over Net
March 7, 2007
Olympia London, UK
More information: Click Here

China Broadband Triple Play/IPTV Forum 2007
April 18-19, 2007
Hong Kong
More information: Click Here

China DSL Forum 2007
April 18-19, 2007
Hong Kong
More information: Click Here

China VoIP
Conference & Expo 2007

May 23-24, 2007
Hong Kong
More information: Click Here

June 18-21, 2007
Chicago, Ill.
More information: Click Here

Wireless & Mobile
Expo & Conference

July 17-18, 2007
Toronto, Canada
More information: Click Here


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