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Content Tagged with iptv + broadband
Who Wins: Verizon FiOS vs AT&T U-Verse
Verizon recently launched its FiOS TV and fiber-based broadband service in New York City, The New York Times is taking stock of the service, which seems to be doing well. Verizon’s $23 billion investment into FiOS wasn’t viewed kindly, and Wall Street viewed AT&T’s cheaper U-Verse plan as more practical and affordable.
Despite such early shellacking on Wall Street, the company’s decision to go with the more expensive fiber is proving to be smarter, even though it is still not clear if (and when) Verizon is going to start making big money on its bet.
“If I were an auto dealer and I wanted to give people a Maserati for the price of a Volkswagen, I’d have some seriously happy customers,” said Craig Moffett, an analyst with Sanford C. Bernstein. “My problem would be whether I could earn a decent return doing it.”
Moffet estimates that the company is going to lose about $6 billion on FiOS all told. Others feel that 20 percent buy-in from potential customers makes it profitable. Wall Street seems to have warmed up to the Verizon story, impressed perhaps by its recent growth, especially when stacked up against AT&T.
My view is that all U.S. phone companies are in trouble because of major shifts that are going on in the industry. Verizon, with FiOS, at least has an offering that addresses the needs of the future broadband users. Whether they make money on it, who knows.
At the end of second quarter 2008, Verizon had more than 2 million FiOS Internet users and 1.4 million FiOS television users. In comparison, AT&T has 549,000 subscribers for its TV service. Verizon is offering better speeds than AT&T and is very competitive with its local cable rivals such as Time Warner Cable and Cablevision. In comparison, AT&T so far offers regular DSL packages whose speeds are spanked silly by cable offerings.
Anecdotally (and acknowledging the fact that technology blogs are skewed in favor of early adopters), it seems Verizon FiOS subscribers are happier with their Internet connections. I have no gauge of people’s reactions to FiOS TV. In comparison, AT&T U-Verse seems to elicit a response that can be summed up in one word: meh!
What do you guys think? Take our poll and share your thoughts.
For AT&T, U-Verse Is Picking Up Steam
UBS’s John Hodulik, one of the best telecom analysts, has pegged AT&T as his top pick for this earnings seasons and is expecting some good tidings from Ma Bell. What caught my eye in his note this morning was the progress made by AT&T’s IPTV effort, U-Verse. Hodulik says AT&T has added about 135,000 subscribers in the first quarter of 2008, up from 105,000 new subs in the fourth quarter of 2007. (It could have had one more subscriber in Stacey, who is waiting for U-Verse to show up in Austin.)
This means the company could add as many as 975,000 more U-Verse subscribers by the end of 2008. If that is the case, then U-Verse will have done much better than company expected for 2008. At present, U-Verse is available to about 5.5 million homes, but by end of 2008 that number will increase, helping U-Verse penetration.AT&T has forecasted 1 million new U-Verse subscribers for 2008. AT&T had 231,000 U-Verse subscribers at the end of 2007.
AT&T U-Verse: 100,000 and Counting
AT&T’s (T) much vaunted triple-play service has finally passed the 100,000-subscriber mark — not exactly a scorcher, but good enough to meet the low end of expectations set by the phone company for Wall Street. AT&T also said today that subscribers will soon get more HD channels, according to a press release. The company has a lot riding on its U-Verse (IPTV) effort. It’s also a big test for Microsoft (MSFT), the key technology provider whose ability to handle large-scale buildouts has been in doubt.
With 100,000 subscribers signed up so far, some analysts believe that the company is likely to post results from its IPTV division that will surprise to the upside — which could, in turn, boost its share price. UBS Research estimates that with still 25 days to go in the quarter, AT&T could end the latest three-month period with some 130,000 to 140,000 subscribers. The fourth quarter is expected to be equally impressive, putting UBS’ forecast for year-end U-Verse subscriptions to total around 250,000. Even with those numbers, however, AT&T’s U-Verse — which is a FTTN-DSL service — will lag Verizon’s (VZ) fiber-based FiOS TV offering.
If you happen to be a U-Verse subscriber, let us know what you like (or dislike) about the service.
Related: Our previous U-Verse coverage.
Telco dogs need to learn software tricks
Last year, after visiting British Telecom (BT) and meeting with their executives, I left London with one key take away: BT was one telco that completely understood that it was facing uncertain times, and had no choice but to reinvent itself to survive.
The senior BT management understood that while broadband was a start point for its reinvention, it had to boldly go where no telecom had gone before, if they wanted to survive. They had to behave and think like an Internet-based software company.
Ben Verwaayen, BT chief executive, when talking about BT’s transformation remarked :
“This is the second phase of BT’s transformation. The first phase saw BT shift its focus from narrowband to broadband. This next stage will see BT advance from a 20th century hardware-based company to a 21st century software-based services company.”
Though it may sound like a hookey statement by a telco chief, it is actually quite true. According to McKinsey nearly 60% of CIOs are currently considering software-as-a-service model. If you factor in the lag-factor typical of McKinsey reports (aka a year after the fact), the SAAS movement is well under way.
“There are more than 1,000 SaaS vendors in existence today, although 90% have less than $15 million in annual revenue, but are growing 4x faster than licensed software,” notes Colby Synesael, analyst with Merriman Curhan Ford.
The weak link, however, for SaaS, is the reliability of these services over an IP connection. Synesael, makes a good point when he argues that SaaS needs to overcome bandwidth constraints, packet loss, jitter and latency. These are issues that telcos can address with their network capabilities, and they can start to learn the ways of the software world, and work with SaaS vendors.
“In a software driven world, services will be available in real time and around the globe, harnessing the potential of BT’s 21st Century Network,” Verwaayen recently said.
That holds true for any telecom operator. The old AT&T CTO Hossein Eslambolchi used to talk about software-expertise-as-a-way out from telecom commoditization.
I wonder if this is a wiser, albeit less sexy way for telecoms to bolster their business. Instead of spending $6 billion on IPTV projects, AT&T could say buy a Salesforce.com (have some money left over for satellite-based triple play) and ensure a few hundred thousand folks paying $60-odd dollars a month for the CRM as a service. It be a nice way to fight off the cable companies who are now gearing up to go after the small and medium sized businesses.
Channel 4 Ups Web Expenditure, Eyes IPTV Carriage
UK public service broadcaster Channel 4’s annual new media budget is increasing by £1 million ($1.9 million) to £22 million ($43 million) in 2007. In its statement of programme policy (required by regulator Ofcom), C4 said: “While we expect our portfolio of new media services to generate commercial returns to be returned to the core channel, we will also use new media platforms to launch entirely new services with public service broadcasting values and to offer viewers new ways to access Channel 4’s output.”
The additional investment will go to overhaul the websites for Channel 4 News and the Dispatches news show, launching improving user-generated content portals for comedy and documentaries, and to online education content. It will also take the broadcaster’s 4OD on-demand package (currently available on cable TV and computer screens) onto BT’s Vision IPTV service.
Pulver Seeks FCC Promise To Leave Internet Video Unregulated
Jeff Pulver, taking the bully pulpit at his latest VON conference in San Jose this week, is asking the FCC to declare that internet video is not subject to cable and broadcast television regulations. Pulver filed the petition on behalf of Network2, his online video aggregation company. He also wants the FCC to go on record that it does not intend to impose new regulations on internet video. Release.
Pulver’s reasoning: internet differs vastly from traditional media from technological, geographical and social standpoints, therefore, it should not be governed as if it were something else. Pulver: “From a technical standpoint, internet video is simply a piece of code, a software application riding over the Internet Protocol. Internet video is not tied to underlying network infrastructure in the same ways that cable and broadcast-based video content currently is tethered.”
Jeff Chester, executive director of the Center for Digital Democracy, speaking to B&C, counters Pulver’s views: ”Multi-platform access rules will be needed for political speech on mobile and IP platforms. Rules protecting news and public affairs and advertising safeguards will be needed, including protecting children.”
Pulver’s move comes on the heels of Skype’s net neutrality petition. The web telephone service also requested that the FCC to “confirm a consumer’s right to use internet communications software and attach devices to wireless networks,” according to VO News. The petition would ease the way for independent providers to offer IP services over cellular operators’ high-speed data networks.
At the same time, Virtual Digital Cable has a pending complaint with the FCC saying online video distributors should be covered by the program access law that requires satellite-delivered cable programming from companies affiliated with cable operators to be available to multichannel-video-programming distributors.
Related:
-- Tech Firms Push to Use TV Airwaves for Internet
-- Liberty Media Yanks QVC Off Web Streamer VDC
-- VON Round-up: Predictions & Suggestions For Growth, Impending Regulation