IPTV may have a scalability issue

A company that supplies technology to the IPTV industry held a press event the other day, and spent quite a lot of time dissing Microsoft TV. Their main accusation was that Microsoft’s IPTV software solution wasn’t scalable, and they predicted that none of the so-called Tier 1 telcos that had adopted the Gates technology would have more than 20,000 subs by next year (i.e. 2007).

Actually, their criticism wasn’t confined to Microsoft. “Scalability of IPTV has been the biggest bugbear of IPTV,” said the company’s CEO, admitting that his main problem hadn’t been gaining market share for his particular product, but that the market had ended up being much smaller than predicted.

It’s interesting that, in the weeks that followed, two Belgian telcos, Belgacom and Telenet, announced the results of their respective digital TV deployments, and with vastly different results. Belgacom’s much-hyped launch last July had garnered just 33,000 subs by year-end 2005, while rival Flemish cable company Telenet, launching several months later, and to a smaller constituency, had notched up well over 100,000 (the precise results are due to be revealed today (Tuesday 28^th Feb)).

So what’s the difference? One can surely not dismiss the possibility that Telenet’s content offering was simply more attractive to potential subscribers. But (a) Belgacom managed to out-bid it last year for exclusive access to Belgian premier league football matches and (b) Belgacom carries exactly the same services from Flemish pubcaster VRT that Telenet does. So, at least on the face of it, Belgacom’s content should match Telenet’s in attractiveness.

There is a significant technical difference between the two services, however. Belgacom’s was a proprietary IPTV offering (not Microsoft’s, as it happens, but Siemens’) over an ADSL network. Whereas Telenet’s was an old-fashioned DVB-style deployment over a digital cable network, using an only slightly less mature middleware solution, the Java-based MHP.

Given the relative circumstances of the two competitors, it’s rather tempting to suppose that the difference is in fact due to Belgacom encountering problems trying to scale up its IPTV network. Maybe that's a cue for all of us to start scaling down our IPTV forecasts.

Comments

[Fernando Elizalde]

It's hard to say Telenet is more successful than Belgacom. There's a fundamental difference among the two companies and services: Belgacom started offering TV services from scratch, Telenet had a very large customer base (smaller than Belgacom if you compared just number of subscribers but Belgacom had no TV subscribers when it launched).

For Telenet customers digital TV (and its application VOD)was an upgrade on an already susbcribed service.