A deal announced way back in June 2008 between Microsoft Mediaroom and Russia’s VimpelCom has now been launched. Well it’s sort of been launched, but will finally go to market later this Summer. It is testimony that what was once criticized as being an expensive and hard to work IPTV system, has now found its way into the mainstream, and can drive services which have to serve communities which are not, by western standards, rich.
To be fair Mediaroom always said this, and promised it would drive set top prices down to around $50, and servers, which are abundant in its peculiar implementation of IPTV, would fall dramatically in price and no longer make it an expensive option.
Mediaroom endured a 5 year trial at Reliance in India before emerging into the sunlight at a launch in November 2007, with Microsoft’s CEO Steve Ballmer at the time claiming that the deal was worth $500 million to Microsoft. Given that Indian’s are paying the equivalent of $3 a month for pay TV, Faultline calculated that given the broadband penetration in India, it would take close to 20 years for that figure to be realized and IPTV would need to be dominant. Today the dominant format for pay TV in India is DTH, with about 6 separate services all growing rapidly.
But still Microsoft has persisted with chasing down any lead at all for Mediaroom and all the time it must be getting cheaper as server pricing comes down and there is less implementer work to carry out to get it working.
Back in 2004 it seemed that hardly a week went by without Microsoft announcing a new tier 1 IPTV partner somewhere around the globe, but since the first 14 or so went to work making the system actually function, the announcements have been thin on the ground.
VimpelCom is the first such deal in Russia or the Commonwealth of Independent States and the new service will be called Beeline TV from VimpelCom subsidaiary Corbina. The new service will have VOD, DVR, and fast search to look up shows using keywords.
Beeline TV will be used as part of a triple play service, will use a 160 GB Motorola DVR set top and offer 100 broadcast channels and is mostly working over the fiber in most apartment buildings in Moscow and many other Russian cities
In January this year Microsoft Mediaroom made it into China with new customer, the Guangzhou Digital Media Group, in an installation which featured the first use of its network PVR software, called Anytime.
Guangzhou Digital Media Group is a cable TV operator with 2.5 million cable TV subscribers, which it says it will convert to Mediaroom and IPTV over the next three years.
Given that this was an upgrade for a cable network, this opens up all of China’s 160 million cable TV homes, 75% of which are analog, for upgrade to Mediaroom. However Microsoft has almost been shut out of the pure IPTV market there since China Telecom told its outlying regions last Summer they must buy IPTV systems from either ZTE, UTStarcom or Alcatel-Lucent.
Back at VimpelCom, “I believe that this agreement will further strengthen our long-term partnership with Microsoft, providing our company with a distinctive competitive advantage in one of the most promising high- growth broadband markets in the world,”Alexander Izosimov, CEO of VimpelCom, said.
VimpelCom is really a mobile company that like Vodafone in Europe, is buying up wireline properties to support what it hopes will be a quadruple play. Last year VimpelCom completed the purchase of Russian wireline carrier Corbina Telecom buying the last half (49%) of the business Corbina for about $404 million.
“Corbina Telecom’s fiber-optical network is reaching almost every apartment building in Moscow and many other Russian cities and is known for its speed and reliability, providing its users outstanding Internet service. With the Microsoft Mediaroom solution, Corbina Telecom will also provide its users an outstanding TV service,”commented Dmitry Malov, Vice-President of Corbina Telecom.
Microsoft Mediaroom announced last June that it had passed the 2 million mark and this week told me that this number is now over 3 milliion
The basic Beeline package will cost around 270 Rubles per month, around $8.5 with the advanced package around double that. The company has 800,000 broadband subscribers in Russia, so as we said it is a testimony to Mediaroom pricing that it can support such a small broadband base, and must really be a loss leader in the hope that VimpelCom will slowly broaden its fixed line reach.