The Latin American spin on IPTV
Latin America has become fertile ground for IPTV, even though varying regulatory environments make each country its own potential challenge. In some countries, such as Brazil, the large telecom operators are forbidden from offering video services over their networks.
Still, IPTV is taking off in Latin America, even as it seems to be slowing north of the border, where AT&T remains the primary deployer. Steve Oetegen, of conditional access provider Veramatrix, said his company is looking at double-digit requests for proposals from Latin America, and he expects to see six to eight deployments this year — but noted many of those are hybrid deployments.
Alcatel-Lucent and Microsoft last week announced a Latin American win, signing Codetel (Compania Dominicana de Telefonos) of the Dominican Republic. Codetel is an admittedly smaller player than many of the Tier 1 telecom service providers that are currently using Microsoft Mediaroom to deliver IPTV and possibly a sign of more to come on this front, said Hemang Mehta, product management director for Microsoft Mediaroom.
“The Dominican Republic is a market where broadband penetration is not so high,” Mehta said. “[Average revenues per user] are much lower compared to the U.S. markets. One of the interesting things there is what I would say is central gravity at two different ends: a lower socioeconomic group and also pockets of affluence. One of the challenges is how do we make sure we have a platform that can allow us to not only provide a cost-effective base package, but take into account pockets of affluence where we have to support multiple TVs in the home. You have to plan with respect to capacity available in the network. With the Mediaroom platform, we are in the Tier 1 space with larger operators, but I think that Codetel and other recent announcements show the viability with smaller players.”
The knock against Microsoft has been that its server-intensive solution is too expensive for smaller companies, but Mehta said that thinking is changing for two reasons: First, service providers are seeing Microsoft’s Mediaroom as the all-in-one solution it is designed to be, and second, server prices are coming down.
“Codetel was doing broadband services, had an Internet base and also strong mobile penetration, which was growing substantially,” Mehta said. “They needed to have a TV package to make sure they had a set of converged services. Being a small telecom player, they didn’t have the luxury of saying, ‘We are going to build everything from the ground up.’ [Mediaroom] is a platform, and along with some of our partners like Motorola, they were able to enter the convergence space.”
Motorola is supplying the IPTV customer premises equipment that enables Codetel to offer services such as programming of the digital video recorder with a mobile phone or PC, Mehta said.
The challenge for Latin American providers is to beat their cable competition but also be able to compete with broadcast options. There are about 25 over-the-air channels in the Dominican, Mehta said.
As analyst Steven Hawley noted after the big IPTV Americas show earlier this year, telcos will need to move more quickly if they want to get out ahead or at least keep up with the cable operators.
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