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Mobile & Wireless
Swisscom Launches IPTV
Technical Problems ‘Solved’ After Year-long Delay
by Iain Morris
Swisscom today announced the launch of its long-awaited
IPTV service Bluewin TV.
The service is being promoted as ‘TV over the telephone line’ in a consumer-conscious effort to prevent any misconceptions
arising from the use of technical terminology.
“We don’t want any confusion between Internet television and
IPTV,” says Carsten Roetz, deputy head of media
relations. “For us, Internet television is just a service you can
use on your PC to watch TV.”
Bluewin TV promises customers much more, says Roetz. The
service gives users access to more than 100 television
channels and 70 radio stations and a host of other value-
added content such as on-demand films. A basic package is
priced at CHF29 (€18) per month, plus a one-off installation
charge of CHF95 (€60), and will be available from November 1st.
Bluewin TV faces a tough market entry owing to the
dominance of cable television in Switzerland. With more than
80 percent of television households subscribing to cable, the
country has one of Europe’s highest levels of cable
penetration.
That said, digital TV over cable – which provides a similar
service to IPTV – is far less widespread in Switzerland, serving
just 4.2 percent of households or approximately 114,000
customers.
Swisscom must be hoping that Bluewin TV will appeal to the
thousands of customers who have not been tempted by the
more comprehensive cable offers. One advantage it claims
over its cable rivals, such as Cablecom, is pricing.
“For the Teleclub Basic package from Bluewin TV the customer pays
CHF29.90 [€19] instead of CHF39.90 [€25] via cable,” said
the company in a statement.
But Roetz claims there are greater benefits. “First, the uplink
channel for exchanging information is better than on the
cable networks,” he says. “Second, we offer real video-on-
demand services, meaning that you can choose the movie
you want to watch now and see it from the beginning – there
are no set starting times as with Cablecom’s service. The third
advantage is exclusivity of content – you will see events that
you won’t find on other networks. And finally it will be possible
to program recording via the mobile phone.”
Using technology supplied by Microsoft, Swisscom’s IPTV
service has been plagued by bad press since it was first
mooted back in 2003. The scalability of the Microsoft
middleware originally proved problematic, with reports that
only 40 customers could be supported per server, and in May
last year Swisscom issued a statement warning of a delay to
market.
“The commercial launch will not be possible in the second half
of 2005 as it has become apparent that the technology
currently available is not yet suitable for serial delivery, in
particular since the set-top box has no internal hard disk and
only one television channel is available,” read the release.
A year on, those technical slip-ups have been ironed out,
says Roetz. “We were working with the 1.0 version from
Microsoft but now we’re working with 1.1, which is much better.
We think we have overcome the technical problems.”
But other constraints remain. Customers without access to
VDSL technology – which presently covers around 65 percent
of the Swiss population – cannot receive two TV streams
simultaneously, which means a user would not be able to
record one channel while watching another.
Swisscom is investing between CHF600 million (€378 million) and
CHF700 (€441 million) in the rollout of VDSL infrastructure, which it
expects will extend to 75 percent of the country’s population
by 2010. In the meantime, customers using the single-
stream ADSL service will be charged only CHF26 (€16) for the
basic service.
Even then not all broadband subscribers will be able to receive
the IPTV service. Swisscom says that the length of the access
line in some areas renders the bandwidth insufficient for
Bluewin TV, restricting effective coverage to around 75 percent
of the total population.
At this morning’s press conference, Swisscom appeared keen
to position Bluewin TV as part of a triple-play offer. “Our IP
network has been designed to handle all IP-based services.
In other words, it is ready for triple play” said Mike Zumsteg,
Bluewin TV project manager.
Essentially, however, users are forced into a triple-play option
whether they like it or not. Users who subscriber to Bluewin TV
will already have to pay CHF9 (€6) per month for ADSL and
CHF25.25 (€16) per month for their basic telephone line,
putting the full cost of IPTV at CHF63.25 (€40) per month.
In future, Swisscom expects Bluewin TV to form an integral
part of its converged-services portfolio. “Our next step will be
to enable the use of all types of screen – TV, PC and mobile
device – for a consummate television experience,” said Ueli
Dietiker, CEO of Swisscom Fixnet AG at today’s press
conference.
The company has already revealed its commitment to IMS as
a means of cost-effectively delivering such services, and at the end of last week
announced plans for a DVB-H trial for broadcast TV over
mobile devices. A commercial DVB-H service would arguably
allow it to more fully exploit the potential of Bluewin TV over
mobile.
IPTV has been one of the telecom industry’s favourite buzz
acronyms over the past few months, but some analysts have
recently called the business case into question.
This month, Ovum published a report that forecast very
modest growth of the global IPTV market to 29.5 million
subscribers in 2010, up from 5 million today. In terms of
revenues, that will represent an increase from nearly €1.18 billion
today to just €7.32 billion in 2010.
Those numbers, says Ovum, reflect the challenges facing
telcos like Swisscom that are currently launching IPTV.
“The content culture is completely alien for telecom
companies,” says Annelise Berendt, a senior analyst with
Ovum. “Consumers don’t associate telecom brands with
entertainment.”
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