Telco video close-ups, Part 2

We in the telecom business have been hearing about video—and, in many cases, doing something about it—for several years now. The RBOCs, for all their fits and starts and hesitations, have been in the game for much longer. Outside of the telecom bubble, though, you know what happens when you mention video-over-DSL. "Regular people" will stare at you blankly for a minute, then attempt a faked recognition of the topic by saying, "Oh, yes. Well, my daughter is a Web designer….” 

In my May 16, 2003 column, Telco video close-ups, Part 1, I focused on three smaller U.S. carriers with differing business models. This time we will go over the pond, to take a look at carriers in Europe, starting in Norway. 

Telenor, a diversified carrier with telephone, broadcast satellite and wireless services, not to mention an international footprint, has been conducting TV-over-VDSL trials in the Norwegian city of Stavanger since 2000. Although the company has not made any specific public announcements concerning rollouts, Telenor has been pleased with its trial results and is expected to launch a large-scale commercial service in that city sometime during the next year.

The company can already serve about 15,000 subscribers with video in Stavanger alone. It also plans to launch the service in several other Norwegian cities. Telenor’s expectation is to offer digital TV with an interactive program guide, for up to three TVs per home; video-on-demand, walled garden, games-on-TV, Web on TV, e-mail on TV and even caller-ID on TV.  These offerings, bundled with phone and broadband Internet services, gives Telenor the triple play.

But wait.  Telenor isn’t the only triple-player in Norway; there’s also iVisjon (pronounced “eye-vision”), a company formed of a partnership between an energy company and a media company. iVisjon is an IP-based TV service that is being deployed over DSL and fiber-to-the-home. The iVisjon service is comprised of TV with an interactive program guide, video-on-demand, walled garden, e-mail on TV and games on TV.   Having no telephone network of its own, iVisjon has to lean more on PC-based services, which include PC Internet access with e-mail and virus control, firewall services and Web hosting.  Because its network is all IP, it also will introduce voice-over-IP services.

Just as U.S.-based telcos have come to recognize through their own TV service experiences, both Norwegian companies understand the importance of the subscriber’s experience. They understand it so well that Telenor has established a production unit for interactive TV programming called Zonavi, which is responsible for creating not only an engaging look and feel for its content, but also a compelling presentation that attracts subscribers to take the interactive services. Similarly, iVisjon’s co-founder, Agder Energi, couldn’t go it alone, so it partnered with Foedrelandsvennen, a media house.  Both service providers then, of course, had to select technology platforms that would support the functionality that they wanted to introduce.

As you would expect, iVisjon considers Telenor to be its primary competitor. The dynamic isn’t unlike, say, an RBOC competing against a public utility, battling it out over the same territory. If these two have any advantage over their respective telco and utility counterparts in the U.S., it might be that they are in a less complicated competitive environment overall. Unlike U.S. telcos, however, they do not have to contend with powerful cable competitors. In Telenor’s case, the satellite TV service is part of the family.

So we have two video service providers and one country, which is not unusual in Europe, where all of Europe’s telecom companies are actively pursuing video ventures, some of which have been announced, many of which have not. Many European carriers sent representatives to the Broadband & Triple Play Services conference in Rome this past July. In Italy, you can’t miss eBiscom’s Fastweb; its advertising is everywhere, from billboards to sports cars. It’s one of the most rapidly growing broadband service providers on the continent, and it too has announced its own TV-over-broadband service. Watch out, Telecom Italia!

Space doesn’t permit me to speak of the breadth of European telcos’ interest in video, although March 15, 2002, column examined the FS-VDSL, many of whose members are major European carriers. Nor have I mentioned the U.K.’s legendary Kingston Communications, which has been providing the KIT TV-over-DSL service commercially in East Yorkshire since December of 1999.

Those “regular people” mentioned at the beginning of this article are often surprised that the technologically advanced United States isn’t the leader in the telco video space. At best, we might be even with the Europeans, but are playing catch-up with Asian countries such as South Korea, Taiwan and Japan.

Steve Hawley is principal consulting analyst of Advanced Media Strategies.  He can be reached via e-mail at steve@tvstrategies.com.

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