Melita uses merger to sneak debut OTT launch under the radar

Maltese operator Melita quietly rolled out its debut OTT video service this week; news that was completely overshadowed by the announcement that it is merging with Vodafone Malta to form a dominant fixed line force in the country – an island home to around 430,000 people.

With the merger taking center stage, Melita didn’t even bother pushing out a press release covering the launch of its new NexTV multiscreen service, possibly to draw attention away from its month-long delay. Faultline Online Reporter took the opportunity to speak to Melita’s CEO, Harold Rösch, to pick his brain on Melita’s late entrance to the European OTT party.

Rösch told us that Melita’s OTT strategy is partly an attempt to stifle the illegal providers of pirated online content – an issue which has apparently grown to the extent of an estimated 30% of households in Malta using an illegal service such as a Kodi box, according to Rösch.

NexTV is a free TV Everywhere multiscreen service which comes as part of a pay TV and broadband package, with speeds up to 100 Mbps, costing €32.99 ($36.90) a month. It offers live and catch-up services on up to 4 devices simultaneously, available on iOS and Android devices, web browsers, and via the NexTV Decoder.

Rösch claims that the decision not to launch NexTV as a standalone OTT service for the entire country was a move in line with the current position of the market in Malta, where apparently there is little consumer demand for standalone services.

Like many operators around the globe, bundling multiscreen TV services with pay TV and broadband is a common business tactic for reducing fixed line churn, but we would argue this is giving out a contradictory message to one claiming to combat piracy, which a cheaper, standalone service would do.

However, Rösch noted that Melita is keeping the option open to launch NexTV as a standalone service in the future, but perhaps Melita will wait for incumbent telco GO to make the first move, as it too currently only offers OTT video to paying subscribers.

When comparing NexTV with Melita’s main rival, Rösch commented that GO’s service, GO TV Anywhere, lacks the full OTT functionality of Melita’s NexTV as it has no catch-up, whereas Melita has a 7-day catch up service and nPVR.

Melita launched its IPTV project in 2011, hosted and managed by Zattoo, with SeaChange International owned On Demand Group for aggregating movie content for VoD, plus Netgem hybrid set tops and Verimatrix VCAS security.

The new NexTV OTT system has done away with these well-known players, with the exception of Verimatrix, in favor of a relatively unknown name in OTT, Belgium-based Androme, which is providing the back-end functionality with integrated recommendation software. Verimatrix dominates in Malta, as it also has the security contract at GO for the telco’s OTT and IPTV services.

The Androme Nebula TV back-end system provides the UI, CMS, and core TV functionality for live streaming, nPVR, catch-up and supports PlayReady DRM. It handles search, recommendations and advertising insertion, plus tools for analytics, device and user management, and managed software updates.

Melita has also decided to use ADB as the set top supplier for its NexTV Decoder, rather than the hybrid set tops from French firm Netgem used in the IPTV service.

We first heard about Melita’s new TV project at the Cable Congress show in Brussels back in March this year, where Rösch was speaking. The launch of NexTV was initially due at the start of May, but hit some hiccups relating to the EPG and VoD, which Rösch noted resulted in more trial runs than expected. Although no direct finger was pointed at any technical faults from Androme for causing the delay.

Androme’s CEO, Raf Van Ham, declined to comment on his company’s latest deployment when contacted separately by Faultline Online Reporter. Rösch also conceded that the merger negotiations had a part to play in the delayed launch.

Moving on to last week’s news that Melita is merging with Vodafone, Rösch said the deal is set to create a combined entity with 300,000 total accesses across pay TV, broadband and mobile. Melita currently has 100,000 mobile subscribers and 80,000 subscribers to pay TV and broadband – owning around 50% of the fixed line market in Malta.

Melita’s subscriber base has remained stable at 180,000 since we last reported on its numbers back in 2010, but it has most likely offset traditional pay TV losses with broadband and mobile gains.

Vodafone Malta says its 4G network reaches 99% of the population of Malta, while Melita claims its cable network also covers 99%. This sets the merged company up well to launch a mobile-first OTT video service before GO, as both Melita and Vodafone have rolled out a host of WiFi hotspots across Malta, for which Vodafone uses Finnish WiFi provider Uros for its Goodspeed internet service, and Melita says it has a web of over 50,000 WiFi hotspots.

The merger is pending approval from the Malta Competition and Consumer Affairs Authority and is expected to complete sometime in the second half of this year, with shareholders intending to appoint Rösch as CEO of the merged group. The newly formed company will operate under the Vodafone brand