Bernardin Arnason at the Pivot Group believes smaller Telcos have been waiting for AT&T’s vendor choices and MPEG-4 satellite transport solutions. Now roll-outs should accelerate again

MPEG-4 delays

While MPEG-4 solutions are promising, they simply have not been widely available to date. The issue goes beyond set-top boxes and involves the launch of MPEG-4 based satellite transport platforms. SES Americom, Intelsat/PanAmSat, Auroras and Broadstream all hope to launch MPEG-4 solutions at some point in 2006 (see p10) and these platforms promise to significantly lower the CAPEX cost and time-to-market for IPTV. While less of a concern for larger Telcos like AT&T and Verizon, IPTV CAPEX costs can make or break a deployment for one of the 1,000 or so smaller Telcos across the US. A good percentage of these Telcos are definitely delaying their IPTV plans until viable MPEG-4 satellite transport platforms are available. Combined, the availability of MPEG-4 Customer Premise Equipment and the emergence of viable Telco-focused satellite transport will certainly contribute to the acceleration of North American IPTV deployments. This is less of a factor where hybrid approaches, like DVB-T, are available, although Tier-1 Verizon has a hybrid approach of its own – using QAMmodulated broadcast for live TV and IP for on-demand.

Vendor interest

As is the case with past technology evolutions, IPTV has fuelled a plethora of new vendors and new solutions from existing vendors. One only has to look at the tradeshow circuit as evidence of this. Any telecom themed tradeshow of the past two years has been dominated by IPTV focused announcements and developments. While the growth of IPTV solutions is encouraging, it also causes concern. Many of these new solutions and/or vendors will simply not make it over the long-term and Telcos know it. The telecom community has seen its fair share of technology platforms that, despite early promise and long-term commitment assurances, did not measure up. These factors contribute to a wait-and-see attitude from Telcos who prefer stability and staying power from their vendor partners over ‘bleeding edge’ technology promises. The relatively recent emergence of AT&T as an IPTV bellwether only intensifies this attitude. Many smaller Telcos will now wait to see who AT&T selects as long-term IPTV vendor partners, believing that its massive scale will ensure their selected vendor’s long term viability.

Competitive pressures

IPTV’s destiny in North America has long been established. The competitive landscape will dictate a resumption of wide-scale deployment soon. Competitive pressures from cable companies, with their aggressive VoIP fuelled triple-play roll-outs, will compel Telcos to respond with a full triple-play suite of their own. 2006 is giving all parties time to catch their breath, reassess the landscape, strategise their next move, and lay and wait for the opportune moment to engage. All evidence suggests 2007 will be an active year. MPEG-4 developments should have more clarity. Telco-focused HITS platforms should be available. IPTV mature vendors will have gained experience and selection from lead service providers. It all points to an active and bright future.

Bernie Arnason is a principal with the Pivot Group LLC. Previously, he was head of business development with the US-based trade association, the National Telecommunications Cooperative Association (NCTA) and also was co-founder of the TelcoTV conference. He can be reached at bernie@askpivot.com