News Stay informed about the latest enterprise technology news and product updates.

IPTV gives telecoms interactive edge in fight for local markets

IPTV won't completely change the television game anytime soon, but it puts telecoms in a strong competitive position as they seek to broaden their portfolios.

Although telecom IPTV deployments are still uncommon, the technology is sparking fierce competition in some of...

cable's highest-value markets.

AT&T, one of IPTV's highest-profile proponents, is on track to have its U-Verse service in 1 million homes by the end of 2008, while several regional providers have their own offerings rolled out.

"We see [IPTV] attacking local markets and hyper-local competition emerging," said Vince Vittore, Yankee group analyst and author of a recent IPTV report. Because of the cost and complexity of needed infrastructure, he said, IPTV cannot emerge everywhere at the same time, but within profitable, high ARPU markets, cable television's near monopoly is in for a shock of fierce competition.

A strong local strategy and playing to IPTV's strengths -- nearly unlimited channel selection and increased interactivity -- are the keys to waging a successful IPTV campaign, according to the report, "From Gorillas to Guerrillas, IPTV Changes Everything."

"I think every telco at some point has to get into the [IPTV] business to counteract the loss of access line revenue," Vittore said. It's not a matter of if or even when, but rather where and how.

The early markets, he said, are likely to be in urban and suburban areas where customers are willing to pay a premium for greater selection and added features, as well as having their television bundled alongside Internet access and phone service.

These are some of the highest-revenue customers, and competition will be fierce, Vittore said. Although IPTV is not expected to make huge inroads nationally – perhaps 10% of the market by 2011 – it could be a serious headache for local operators that are up against it.

Localization is one key differentiator, particularly in marketing and packaging. This was once cable's strong suit, he said, but it has fallen off in recent years, giving telecoms an opportunity to push local angles – such as hometown celebrity endorsements – while providing local content such as high school sports games that traditional providers may be missing.

"[The strategy] goes from everything being made at the corporate level … to being pushed down to the lower [regional] level," Vittore said.

Added products, such as caller ID or improved interactivity, could also help seal the deal for telecoms and cable operators alike, particularly as these offerings now move past the early adopter stage.

Many of those added products seek to tie in multiple services, particularly as telecoms' triple-play offerings face competitors on all sides.

According to Steve Borelli, vice president of marketing for converged services provider Integra5, many telecom customers are fending off competing triple-player services from cable companies even as they fight voice erosion from mobile operators and video competition from satellite.

"Providers come to Integra5 and say, 'I've invested a lot in my network and I have great services … I don't want to be another low-price provider,' " Borelli said.

Right now, according to Borelli and Vittore, there is a lot of interest in combining call functionality into the television experience: Caller ID on the screen, for example, has been popular with early adopters' customers.

For the future, vendors are working on ways to integrate call forwarding and even call initiation, with an integrated phone book on the screen that customers can tap into if they want to order a pizza or check in on the kids.

"Now, [telecoms'] investments in services really start working together," Borelli said.

IPTV has an early advantage in this area, with data overlays being easier to integrate in an all-IP architecture, but Borelli warned against counting on that advantage lasting long.

Cable operators have been working to better standardize their architecture through initiatives like Tru2Way -- a write-once, deploy-anywhere cable framework -- in order to make their systems more appealing to third-party developers and to spur innovation.

These interactive services are just in time for cable operators. The Yankee report found customers less likely to defect to separate best-of-breed services if their triple-play package is highly integrated.

"Middleware is key," Vittore said. With the right combination, a provider could let NASCAR fans watching a race tap into their favorite driver's dashboard information and even get a live audio feed from the car, all overlaid onto the video broadcast.

"Cable operators can do that," Vittore said. "But it will take more time."

Dig Deeper on Telecom Resources

PRO+

Content

Find more PRO+ content and other member only offers, here.

Start the conversation

Send me notifications when other members comment.

By submitting you agree to receive email from TechTarget and its partners. If you reside outside of the United States, you consent to having your personal data transferred to and processed in the United States. Privacy

Please create a username to comment.

-ADS BY GOOGLE

SearchNetworking

SearchDataCenter

SearchCloudComputing

SearchCloudProvider

Close