Today, although a swathe of UK tech companies and start ups have targeted the IPTV market, it is one of the least sophisticated pay IPTV markets in the world, and certainly in Europe, where IPTV really started.
So far the diminutive, but very excellent Homechoice, now owned by Tiscali, is the only real multicast IPTV service, with Inuk launching something similar, but mostly to the student population through university networks and British Telecom deciding that the advanced state of satellite, cable and DTT TV offerings, meant that its fledgling IPTV offering BT Vision is just VoD, on the back of existing DVB-T terrestrial services, with no multicast delivery in sight.
That’s a very low bar to shoot for, and both Orange and Telefonica’s O2, two of the largest cellcos in the UK, after Vodafone, are both expected to come out with services in 2008. This week the national newspapers, the UK Guardian and the Independent, have each claimed to have discovered that O2 will launch in the new year and that France Telecom’s Orange has just delayed to the same time frame. Orange has been openly trialing its service with 350 customers in London and Leeds and the O2 trials will begin in a few months.
In actual fact we have been pointing out that France Telecom owns the Orange re-branded Wannadoo, and that O2 has purchased the BE broadband operation in the UK, and both are ripe for full service IPTV operations, whether multicast oriented or just a VoD hybrid with Freeview.
Wannadoo is significantly better installed than BE, but that should present no problem, both have unbundled operations and both should be able to mount multicasts on DSLAMs which they own themselves. The brands are more or less equal strength, and the software used by Orange’s MaLigne TV in France is one of the most long lived in the world, while the Imagenio software from Telefonica has already been transplanted in the Czech Republic, a port that took just three months, and to Brazil.
What both will find, and what is probably staying their hand, is that profitability will be a long haul in the UK, with the massive TV brand of BSkyB, the market leader by a long way, and the DVB-T baed Freeview, now so popular with 60 plus channels, that many households are not looking for anything more.
The payback has to be seen in terms of the gradual inhibition in cellular churn rates, based on bundling three or four services together, and the customers’ proven dislike of changing all of their options ‘ mobile, fixed voice, broadband and TV, at the same time.
Orange has already been offering ‘free’ broadband with new mobile contracts above £30 a month, primarily driving up the number of handsets on contract.
Virgin has already delayed its launch into IPTV, in partnership with Cable and Wireless, which was only to reach people outside of the homes which its cable passes, and the only other broadband operation in the UK which must also be considering going down this route is Carphone Warehouse, now one of the leading ISPs in the UK, on the back of another ‘free’ broadband offer.
O2 in the Czech republic said this week that it had now signed up 70,000 IPTV subscribers here since its service launch in September 2006. In October O2 announced low priced, fast broadband for the UK, and said it would have 1 million customers by the end of 2008.