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10 May 2018

Deutsche Telekom offers subscribers best of IPTV and DTH

Deutsche Telekom has seemingly moved against the tide by offering existing IPTV customers of its Entertain service the option of satellite as well. To make this switch in strategy Deutsche Telekom has shut down its previous DTH-only service delivered via the Astra satellite platform HD+ and launched a new Astra version pitched at existing broadband subscribers, whether or not they already have the IPTV version of the pay TV service.

Until now Deutsche Telekom has majored on the IPTV version which now has over 3 million subscribers, chasing the country’s number one Sky Deutschland which is on over 5 million for its satellite package. Deutsche Telekom’s satellite version has been offered to subscribers whose broadband connection was considered inadequate for the full TV package. That was launched in September 2011 transmitting all TV channels via Astra, relying on a broadband connection only for interactive and on-demand features for which a data rate of 2-3 Mbps was sufficient.

The new service however cuts both ways by offering satellite access to IPTV customers but also seeking to exploit the higher bandwidth now widely available over broadband to provide a true hybrid service that combines the best of both. So now 16 Mbps is the minimum threshold for the service with the IPTV bouquet including HD versions of the commercial channels. Users can switch between IPTV and satellite manually if they wish but the Telco is encouraging them to allow the set top to select the best option for them automatically. For example the box will switch to satellite reception if a channel is only available in HD quality through Astra, or equally the other way around. Then if satellite reception was affected adversely by weather conditions as occasionally happens, the box would change to IPTV.

The whole package includes over 300 channels, as well as interactive functions like time shift, restart and 7-day replay, along with on-demand offers like exclusive series. There is also Telekom Sport, streaming services including Netflix and broadcasters’ own catch-up services from the likes of ARD, ZDF, RTL and ProSiebenSat.1.

Meanwhile many other major Telcos are phasing out satellite as their broadband networks get up to speed for TV and expand their footprints sufficiently. It is true Telefonica has been launching DTH services in some Latin American countries such as Costa Rica where broadband coverage is patchy but it has been reducing satellite distribution in its domestic Spanish market. It announced in December 2017 that its Movistar pay TV service was leaving the Hispasat platform in January 2018, reducing satellite reception options in the country.

Then in the UK BT has never embraced satellite in the first place, combining DTT with broadband for its hybrid TV service. Ironically it will be DTH operator Sky rather than BT that comes out with the country’s first comprehensive broadband-only TV package when it launches its full dish-free package based on a new version of the Sky Q box later in 2018.

However Deutsche Telekom’s move does gel with its strategy first unfurled in 2015 of becoming a major content aggregator focusing on quality of experience as well as diversity of programming. CEO Timothy Hoettges had indicated that future TV platforms would be aligned with this strategy of making as much content as possible available via a single service. Borrowing from China’s mantra of one country two systems with reference primarily to Hong Kong, this could be summed up as one service, two platforms.

Deutsche Telekom has become more aggressive in content acquisition, although it has failed to puncture Sky’s dominance of top league football. It has invested in many second line sports for Germans including basketball and ice-hockey, but most significantly has struck partnerships with German production house UFA for access to a range of German films and then on the international front reached a deal with Fox Networks. This provides access to the Fox European VoD service, FOX+ and several seasons of hit shows such as The Walking Dead, Prison Break and 24.

The combination of DTH and broadband provides flexibility and resilience for delivering this range of programming. It may be debatable how long the Telco will persevere with this as fiber roll out to the home continues, but such moves may not after all be counter to the tide as terrestrial communications and satellite converge.

After all Orange has just reached a deal with Eutelsat to deliver satellite broadband across Europe in a bid to expand its reach, primarily in the east of the continent in areas where terrestrial broadband coverage is patchy. As well as providing high-speed internet to residential customers beyond the reach of terrestrial networks, there are also plans to offer in-flight connectivity services where satellite is the alternative to air-to-ground communications with the attraction of providing a one stop shop to carriers in many cases. That is a market currently taking off.