Joint ITU - AICTO Workshop on
“Interoperability of IPTV in the Arab region”
(Dubai, UAE, 20 – 21 September 2011 )
IPTV development as a vehicle for
Broadband adoption : Role of
Governments
Dr Slim Saïdi,
COO, QSat Communications™
Managing Partner, The Expert Associates®
What’s the Buzz?
Reaction ranges between two extremes:
Cable is already
doomed
Telcos can’t do video
Insufficient infrastructure
Telcos will attract
bundled subscribers
Pay TV market is too
competitive
Cable architecture is
inferior
Service won’t be
differentiated
Dubai, UAE, 20-21 September 2011
Future is IP and telcos
are there first
2
Where are the Customers ?
No cable TV operator provides
IPTV an opportunity and vice
versa
But the S and T TV is very
popular, almost every household
receives TV program through
satellite and terrestrial antenna.
Target customer can be divided
into two types: subscribers
with/without Broadband.
Without broadband
DTH TV
subscribers
Mid to lower income households
Little current possibility to
acquire BB service
With broadband
Mid or high income households
More possibility to acquire IPTV
service
Television Today and Tomorrow
Today
Tomorrow
Mostly Analog
All Digital
Broadcast Transmission
Two Way Networks
Same Media for All
Media is Targeted, Personal
Delayed & Inferred Viewing Stats
Real-Time Viewing Statistics
On-Demand is Add-On
On-Demand is Integral
Proprietary Encryption
Open Encryption
Business Models Limited by CAS
Flexible Business Models
Dubai, UAE, 20-21 September 2011
4
Connected TV
Connected Services
Common network architecture
Common back office interfaces and operations
Connected Devices
Access to personal content from multiple devices in
the home
Select and schedule content
Connected Content and Applications
Deliver the same media and applications across
devices
Cross-promote services in broadband bundle
Integrated Experiences Reduce Churn
Dubai, UAE, 20-21 September 2011
5
What does it mean to you?
Wide
Distribution
Robust
Protection
High
Quality
Dubai, UAE, 20-21 September 2011
Re-use of existing content assets
Multiple on-demand options
New business models
Content protection with open
standards
Flexible rights management
Connected TV experiences
Windows Media high quality video
Independent of number of services
Scale from mobile to SD to HD
6
Why IPTV? Broadband Market Drivers
Cable
Telcos
Financial: ROI on network
upgrades
Severe erosion of core
telephony business:
Regulatory: ‘All digital’
mandates
Need to grow ARPU
VOD as differentiator
Increase ad revenues
Decline of lines and
minutes
Losses to cable, wireless,
VOIP
HDTV consuming new
spectrum
Analog legacy
Subscription TV
VOD
“Triple-Play” bundling
Strategic shifts
Planned expansion
of broadband footprint
Satellite Competition
Retail STB
Eliminate proprietary CA
Increasing bandwidth
ADSL2+, VDSL, fiber
Dubai, UAE, 20-21 September 2011
7
IPTV Market Drivers: TELCOS
Severe erosion of core telephony
business:
Decline of lines and minutes
Losses to cable, wireless, VOIP
Must grow Average Revenue Per
User (ARPU)
Pay-TV and VOD
Need differentiated offering
“Triple-Play” bundling savings
Expanding broadband footprint
Worldwide DSL
Increasing bandwidth
Major Telcos embracing IPTV,
with consumer deployments
underway
Momentum building in the last 6m
Operators engaging vendors today
Source: Ovum
Research
Dubai, UAE, 20-21 September
2011
8
Global view in IPTV
Most of the Top operators have launched IPTV
60,000
3.0%
50,000
2.5%
40,000
2.0%
30,000
1.5%
20,000
1.0%
10,000
0.5%
0
0.0%
2006
2007
IPTV Subs(Thousands)
2008
2009
2010
IPTV Revenue(US$, Million)
2011
2012
Household Penetration
Source: Gartner, Forecast IPTV Subscribers and Service Revenue, Worldwide, 2006-2012
2001
2002
2003
Dubai, UAE, 20-21 September 2011
2004
2005
2006
…. 2010
IPTV Market Drivers: CABLE
Financial: ROI on network upgrades
VOD as differentiator
Increase ad revenues
Voice
HSD
VOD/SVOD,
4
HD Digital,
6
Regulatory: ‘All digital’ mandates
HDTV consuming new spectrum
Analog legacy
Satellite Competition
Aggressive pricing
DVR
SD Digital, 12
Strategic shifts
Retail STB
Embracing IP for VOD (backbone)
Free, 8
Eliminate proprietary CA
Unify on IP network
Where?
North America
Analog, 80
Dubai, UAE, 20-21 September 2011
10
The Value of IPTV
Strategic Value:
Leveraging Infrastructure &
Customer Relationship
High
2
4
IPTV
Value added by
infrastructure
Video on Demand
Data-sensitive ASPs
Online training
Online games
Home video conf
Home networking
Low
1
Instant messaging
$35
Premium Channels
$12
$8
Interactive Services
Billing relationships with
3
utilities…
Low
High
Value added by incumbents’ client
relationships/brands
Sources: McKinsey analysis, 2002-2005
Dubai, UAE, 20-21 September 2011
Digital TV
Programming
PPV/VOD
IP music/radio
E-commerce
Estimated Monthly
Revenue from IPTV
Services
11
TOTAL
$10
$65
Source: In-Stat/MDR 3/03
Broadband: New Opportunities
Networks:
Broadband IP
Switched
Broadcast
Devices:
IPTV
Voice
Services:
Dubai, UAE, 20-21 September 2011
Data
Triple Play
12
Video
Key Drivers for IPTV success
Pertinent
Government
Policies
Broadband
Development and
generalized
access
Key
drivers
Developed
Attractive
Content
Dubai, UAE, 20-21 September 2011
Improved
Business
Model
Paradigms
Global Entertainment Media
Expenditure Scenario
Annual Consumer Spend
$Bn
CAGR %
10%
$314Bn
Mobile Content &
Broadcasting
45%
Broadband/Internet Access
12%
Online Content
45%
5%
Packaged Content
(Video, Music Games)
-3%
Box Office
10%
Subscription TV & Radio*
Source: U&S Digital Distribution Of Entertainment Service
Dubai, UAE, 20-21 September 2011
$497Bn
14
* Basic & Premium, excludes
receiver licenses & advertising
Fixed Operators are Facing
Revenue Loss Threats
1. Decline in traditional voice
revenue
2. Increased BW doesn’t bring
increased revenue
BW
a) Mobile substitution
b) VoIP substitution
2Mbps
Cost
30 USD
18 USD
256Kbps
2002
ARPU
2009
China Telecom
3. Being pipelined in internet
services by service
provider
4. Competition in internet
access
a) Other FBB operator
b) Cable operator
c) Mobile broadband
Fixed operators are facing the challenges not only in the value added
service but also in the basic broadband access services
Dubai, UAE, 20-21 September 2011
Home network increased rapidly in
worldwide
Subscribers of home network worldwide
160
Subscribers of home
network (M)
Increase rate
140
33%
120
21%
80
17%
145
36
35%
30%
28%
1000
85
20%
64
15%
42
Unit: million
915.8
Data
800
25%
51
60
40
113
26%
100
33%
Dev of equipment node of home-network
Entertainment
720.8
Multimedia
600
590.7
NAS
485.6
357.7
400
10%
193
268.3
200
5%
20
0
0%
2003
2004
2005
2006
2007
2008
2009
0
2005
2006
2007
2008
2009
2010
2011
The number of home network has reached 145 million families in 2009, the access speed
is further enhanced, and moving to FTTH fast. When the home node (storage,
processing, media, etc.) increase, the needs to M2M and network sharing will appear.
in 2011, the global number of nodes in the home network is expected to reach 920
million, of which 13% share of NAS, Media node of 23%, entertainment node of 48%.
Dubai, UAE, 20-21 September 2011
IPTV maintains ARPU and improves use
of broadband bandwidth
ARPU Broadband Maintenances
Upgrade the utilization of broadband
Price rate vs. Penetration of Broadband
HD Users Scale vs. Penetration
E
*Source： Gartner Analysis,, Business Insight Analysis
Dubai, UAE, 20-21 September 2011
Forces Shaping IPTV Future
Broadband IP
Networks
Market
Opportunity
Moore’s
Law
Market
Dynamics
Regulation
Better Video
Compression
Content,
Ad Models
18
Government Roles
Stimulator
Facilitator
Arbitrator
Investor
Content Provider