Deutsche Telekom to launch OTT on its IPTV system

German telco Deutsche Telekom is planning a two-pronged over-the-top content delivery effort. First, it will launch multiscreen services in conjunction with its Entertain IPTV offer by the end of this year; next year, it will offer OTT as a separate service to entice new customers.

DT announced the multiscreen option for Entertain IPTV customers who pay an addition $7 per month for 40 channels made available to PCs, laptops, tablets, smartphones and other IP-connected devices. Now, a Broadcast Engineering story said, the carrier is "thought to be establishing a promotional offer to existing subscribers over the Christmas period."

To accomplish the new OTT goals, DT is working with Microsoft's (Nasdaq: MSFT) PlayReady DRM and Nagravision for set-top boxes. It will stay the course and charge for the additional service, even though that breaks with trends in Europe and the United States to make OTT (or TV Everywhere, as it is sometimes called), free as part of regular TV service bundles.

That pay-to-play stance came about because DT wanted to recoup its investment and figured it would be hard to do if it first gave away the service and then started charging.

The telco's two-pronged approach is also somewhat outside the norm. DT is working hard to gather the content, including classic German and Austrian movies made available via a VOD platform, and then developing a low-cost standalone OTT service that it hopes to upsell to bring consumers into its full Entertain IPTV service.

Interestingly, DT is also going to continue using VDSL technology to deliver this package of IP services, even though the VDSL will be supercharged vectoring technology that can reach speeds up to 100 Mbps. The story suggested Alcatel-Lucent (NYSE: ALU) could be the company that delivers this gear.

There is definitely a market for the service. Approximately 12.4 million DSL customers--about 35 percent of the country's households--can receive the IPTV package. Vectoring will double the VDSL reach, and therefore double the potential subscriber base to 24 million households--more than seven times as many as the closest competitor Vodafone, which can reach 3.3 million residences.

For more:
- Broadcast Engineering had this story

Related articles:
Deutsche Telekom mulls vectored DSL
Infonetics: IPTV, satellite taking away cable customers

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