Welcome to our first posting in a series of monthly special reports covering the IPTV sector. This month's special report is intended, more than anything else, to be a discussion starter. The discussion we want to start begins with a pretty open-ended question: Which IPTV service providers around the world are most worth watching at the moment? Among the worldwide class, whose star is rising, and who may have to travel a rough road ahead.
Here are five IPTV players we think will be worth watching for a variety of reasons in the second half of this year. Do you agree? Whether or not you do, please post a comment and tells us about any IPTV players you think are worth watching.
SureWest Communications: The Roseville, Calif., telco could be considered the grandfather of the IPTV market in the U.S., but most grandfathers don't move nearly as fast as SureWest. It's pioneering moves into fiber-to-the-home and IPTV made it a model for other IPTV service providers, although larger carriers who once cautiously followed SureWest's progress have been plenty aggressive themselves of late. SureWest's success also may have made it a higher-profile target for cable TV competition.
Why it's worth watching right now: Cable TV competition is on the increase and landline decline continues for SureWest. It grew its IPTV customer base by 180 percent in the first quarter of this year to a total base of more than 55,000, but much of that growth came from the acquisition of Everest Broadband.
SureWest recently launched new service forays to enhance its value as a broadband service provider. These news offerings include HD DVR, VoIP and home monitoring solutions. As it puts the Everest acquisition behind in the distance, we should get a better picture of how strong the demand for SureWest's IPTV service continues to be, and how well new services can compensate for what SureWest is losing in other areas.
France Telecom: The French incumbent telco recently surpassed the threshold of 1 million IPTV customers, and at the end of the first quarter had just over 1.4 million IPTV customers. However, that doesn't even make it the top IPTV provider in its own country, an honor that goes to competitor Iliad, which, as part of its triple play bundle, offers network-based TV services and Internet-based TV to more than 2.7 million customers (buying the bundle doesn't exactly mean they are choosing Iliad for TV over another provider, of course). Another competitor, Neuf Cegetel, has been nipping at France Telecom's heels, and had registered about 750,000 IPTv customers by the end of 2007. Among other news, France Telecom subsidiary Orange wanted to launch IPTV services in the U.K. earlier, but ran into regulatory delays.
Why it's worth watching right now: Picking just one IPTV service provider from France is extremely difficult and surely unfair in the eyes of those who see Iliad and Neuf Cegetel as the more exciting players to watch in this market. But, France Telecom is at the center of the maelstrom. Its success spreading its wings toward new markets--such as the U.K., which it finally will enter later this year--will help bolster the company against tough competition back home. Both Iliad and Neuf Cegetel are at the beginning of fiber-to-the-home investments, which will enhance their competitiveness, but also saddle them with expenses. Quarter-by-quarter, France Telecom's IPTV progress could be truly indicative of how an incumbent telco can expect to perform in a hotly competitive, maturing IPTV market. It's also got this interesting IPTV software coalition in the works, which we'll be looking forward to hearing more about later this year.
Deutsche Telekom: The German incumbent telco isn't as far along with IPTV as many other service providers around the world. It has a total of 154,000 IPTV customers, 38,000 of whom came on board during the first quarter. The company's T-Home Entertain service is available to at least 17 million households and DT is looking to push that number to 20 million by the end of this year. The service is currently available at a discount through June. DT also has taken the interesting step of conducting an IPTV applications contest.
Why it's worth watching right now: Modest customer totals thus far are one reason to keep an eye on Deutsche Telekom. The company reportedly had wanted to have 200,000 IPTV customers by now, and is still aiming for 500,000 by the end of this year. A major marketing push reportedly planned for this summer is another. Will that IPTV application contest turn up any gems?
Verizon Communications: You are correct, sir--Verizon is not an IPTV player, at least not yet. It uses an RF overlay, and owes some of its quickness to market and early success to that technology choice. But, we aren't going to be too picky about technology camps here (at some point, it's all just about TV, right? Though eventually, that descriptor probably won't fit either). In any case, Verizon has jumped out to be the leading telco TV player in the U.S. AT&T, which does use IPTV technology, remains a strong second. Meanwhile, IPTV service providers have not exactly exploited a plethora of interactive features, so Verizon's platform is as competitive as it needs to be.
Why it's worth watching right now: Will it or won't it? That is the IPTV question facing Verizon and Verizon watchers. Switch to a linear IPTV platform and get the interactivity and bandwidth benefits that go along with it, or stick with the RF approach. It has given recent indication that it's in no hurry to switch. Meanwhile, more reasons to watch Verizon closely include its eventual entry into the TV market in New York City, as well as the ongoing competitive battle between Verizon and the biggest cable TV firms.
Bruce Telecom: Surprised? There are a number of large U.S. and international telcos who could easily round out our list of five (see The Next Three). There are also several independent telcos in the U.S., Tier 2 and Tier 3 providers who have made great strides with IPTV, names like Ringgold Telephone, Canby Telcom, Pioneer Telephone Cooperative and Cavalier Telephone and TV, among others, who are worth a mention. However, Bruce Telecom is a small telco in Tiverton, Ontario, with 14,500 access lines that could stand as emblematic for all the small telcos out there currently embarking on the great IPTV adventure.
Why it's worth watching right now: A few months ago, Bruce Telecom became the first telco in Canada to offer MPEG-4 video in a service offering called Bruce TV. More recently, Hans Nilsson, who had been CEO of the company for 10 years and spearheaded the TV strategy and other major strategic moves, announced his retirement from the telco, so its IPTV plans will be executed by new leadership. We'll be watching.
The Next Three
Here are three more you shouldn't ignore:
AT&T: "Billy Dee says it's time to drop cable like a three-foot putt." 'Nuff said.
Chunghwa Telecom: The Taiwanese telco is the latest service provider using Microsoft's Mediaroom platform.
Telefonica: Spain's incumbent telco has been growing every which way lately and its success included the recent Q1 addition of 43,000 IPTV customers.