TelcoTV Preview: Growing wholesale IPTV market speeds service deployment

“The value proposition of an Avail Media and its competitors is probably strengthened because particularly the smaller telcos are really looking for a solution that they would have trouble building on their own,” Arnason said. “That is the value proposition of an Avail; they are going to bring you a solution that is basically baked for you already.”

From Avail’s perspective, SES Americom’s IP Prime solution poses the biggest competitive threat on the telco side, Romm said. Avail differentiates itself by focusing on the quality of service for a telco, whereas Romm characterizes IP Prime’s focus as selling more satellite capacity. Avail also prides itself on MPEG-4 delivery and the breadth of conditional access, middleware and set-top box manufacturers the company can work with. The hope is that this flexibility will trump any high-definition war its competitors might wage.

“[IP Prime] believes this is a competition for putting more channels up on the satellite continuously to provide a greater amount of channels, but there is a finite number of HD channels, so we are not sure exactly where that game comes in,” Romm said. “Moreover, in a good amount of the telco marketplace and certainly in the smaller rural locations, the throughput to the home is limited. Even if you keep putting more channels on, the fact of the matter is the service provider is interested in a set number of channels that make them competitive in their marketplace.”

The flexibility of Avail’s service was the reason Gary Godfrey, general manager of Northeast Missouri Rural Telephone Company (NMRTC) in Green City, Mo., chose Avail. When Godfrey decided to launch TV services in June, the plan was to share a headend with nearby telco Fidelity Telephone. But this strategy didn’t account for the transport or content rights, which Godfrey realized he’d have to secure from industry aggregators. He ended up choosing Avail because he was familiar with Verimatrix encryption and Minerva middleware, and Avail could interoperate with both. SES, while looking into it, wasn’t ready to work with either vendor at that time, Godfrey said.

If Godfrey and Romm had their wish, they would like to see the takeup of turnkey IPTV solutions go even faster. The slow uptake is, on one hand, an issue of cost and market dynamics for telephone operators that haven’t historically had the resources to turn up multiple homes per day, most of which are transitioning from cable or satellite. On the other hand, it is also an issue of the time it takes to get contracts in place, something many telcos don’t anticipate.