SES Americom has surprisingly pulled out of the wholesale IPTV market in the US. The market is certainly crowded with EchoStar recently joining existing incumbents ‘ SES with its IP Prime service, and Falcon IP Complete, but already the market has seen one casualty in Eagle Broadband, which went into Chapter XI bankruptcy late last year.
SES said that it would close the systems down by July 2009 but that it would not have a material effect on its finances and that it would continue to be on track for the year.
The company said that the market has a difficult outlook, because smaller telecos have been slow to adopt IPTV, and even when they do they are not experienced enough to drive up adoption numbers.
‘With a subscriber base of less than ten thousand at the end of November and after more than 2 years of service, the consumer uptake is insufficient to justify continuing operations,’ said Rob Bednarek, President and CEO of SES Americom New Skies.
Just one week ago SES said that it has signed up 65 telcos in 31 states for IP Prime, which brings an IPTV ready stream down from a satellite and takes away the need for a head end. Many of the customers had used the system to add the 50 IP Prime HD channels to their mix. IP Prime has a selection of 200 standard definition channels as well, and some 40 systems were yet to be switched on and were still in integration and testing mode.
Conditional access specialist Verimatrix recently told us it had the lion’s share of the security contract for the SES Americom and for the Falcon IPTV systems, though some IP Prime business went to NDS. Verimatrix at the time told us, ‘This wholesale model has been interesting from the first, but it’s taken an awfully long time to iron out the kinks in the business model,’ and by our count that long time is something like 3 years.
The rival EchoStar system uses a CA system from Ireland’s Latens and you would think that it must be favorite to take over delivery of the IP Prime services.
There are something like 1,000 or so tiny US local telcos which speak for around 10 million homes in the US. The satellite wholesale model is about the only way of reaching a market which is this broken up, but as we can see, progress has been too slow for SES.
The main US business for SES is backhauling video streams for broadcasters, cable programmers and supplying satellite capacity for aeronautical and maritime communications integrators, internet service providers, mobile communications networks, government agencies, educational institutions, carriers and secure global data networks.