PLDT plans to offer Internet-TV service
By Mary Ann Ll. Reyes, The Philippine Star
Leading telecommunications firm Philippine Long Distance Telephone Co. (PLDT) is seriously considering jumping on the triple play bandwagon via IP television, a fast growing service that merges the Internet and television, in order to penetrate the growing video market in the country.
IPTV or Internet protocol television is a system where digital TV service is delivered to subscribing consumers using IP over a broadband connection. This service is often provided in conjunction with video on demand and may also include Internet services such as Web access and voice over Internet protocol (VoIP).
IPTV is expected to grow at a brisk pace in the coming years both in the Asian region and worldwide as broadband is now available to more than 100 million households. Many of the world's telecommunications providers have either gone into or are exploring IPTV as a new revenue opportunity from their existing markets and as a defensive measure against encroachment from more conventional cable TV services. IPTV also serves as an alternative terrestrial, satellite, and cable TV.
PLDT chairman Manuel Pangilinan expects that IPTV will be a fast growing business in the Philippines, owing to the continuous growth of the broadband market and a large base of tv service subscribers.
"Like 3G, IPTV can lead to full digital deployment of products and services. Through IPTV, we will be able to deliver high definition TV for the AB market," he said.
PLDT has been investing heavily on its net generation network (NGN) to be able to deliver more efficiently and cost-effectively not only voice, but also data, and in the near future, video. Bulk of its fixed line investments starting next year will be in NGN.
Triple play, the biggest thing in fixed line telco, involves offering voice, video, and data as an integrated service bundle. The active element of triple play, IPTV, has been giving long-suffering telcos worldwide a new lease on life, as it has helped reduce churn, challenging cable players and helping reclaim voice minutes lost to mobile. A lot of telcos have invested heavily in their networks and are now trying to get a return by offering more video and data, banking on IP TV to boost their broadband subscriber base and generate new streams of revenue.
With PLDT's fixed line debts reaching more manageable levels (down to $1.4 billion by year-end, or half of its $2.8 billion level in 2002), company officials said PLDT's ability to invest in the next generation network (NGN or the IP network that would enable PLDT to deliver not only voice but also data and video to its subscribers), as well as in fixed and wireless broadband initiatives, has been enhanced.
Pangilinan, in an interview, said PLDT is now looking at various possibilities. "We have to reassess what our approach will be on the video business because new technologies are developing that could actually negate the advantage of existing technologies that are placed on the cable TV platform, new technologies that are more versatile, less expensive," he explained.
Compared to cable TV and satellite TV, Pangilinan said IPTV may be a better and cheaper approach to delivering content to the homes.
The PLDT chairman's optimism about IPTV prospects seem to have been largely influenced by the success of Hong Kong incumbent PCCW, which launched its NOW TV service across its DSL lines in September. 2003 and has since become something of a poster child for IPTV. In early 2003, PCCW was losing 27,000 lines a month to its competitors. By March this year, after the launch of NOW and its next generation fiber services, that was down to 6,000. PCCW now has around 450,000 IPTV customers.
"We'd like to see what accounted for the success of PCCW in Hong Kong. They have a video service on their broadband and they were very successful," Pangilinan said.
PCCW funds some of its own content, including a 24-hour news channel, and uses its own broadcast facilities. As for PLDT, following its failed attempts to acquire broadcasting companies ABC 5 and GMA 7, Pangilinan believes that acquiring content should not be a problem even without PLDT having its own content producer like a TV station.
This new wave of TV-related innovation called IP-TV is just starting to reach consumers. Just as the service known as voice over Internet protocol (VoIP) is poised to revolutionize the phone business by offering a low-cost Internet alternative to traditional phone service, IP-TV could bring Internet-style interactivity and flexibility to the TV set.
Over the next decade, the long-hyped notion of "video-on-demand" is expected to become commonplace, allowing consumers to watch what they want, when they want to. They'll be able to control their IP-TV service remotely through a PC or a cell phone. And they'll be able to personalize their content, whether they want to watch a basketball game or home movies.
Reason for skepticism however abounds. Over the years, a number of Internet-TV efforts such as Microsoft's WebTV have come up short. However, IP-TV projects are already under way worldwide, courtesy of big phone companies in Canada, Europe, Asia, and some rural companies in the US.
According to analysts, if IP-TV takes off, it will provide much-needed new opportunities to traditional phone companies that have built their businesses around wire lines. Besides losing customers to cell carriers in recent years, they've been losing out to cable-TV companies that are producing their own phone and Internet services. In many regions worldwide, cable providers have grabbed 30 percent of the traditional phone customers.
IP-TV gives the phone companies a way to stop the bleeding. Over time, IP-TV could put the phone companies back on the offensive. Cable outfits have spent billions of dollars in recent decades to build their high-capacity networks, which can deliver hundreds of channels to each household. But for the most part, everyone gets the same offerings, with few variations
Analysts point out IP-TV can match that basic model, despite the fact that one can actually receive only the program they choose not the other 200-plus channels that the cable system sends to the set-top box. With the right networking gear, it takes just milliseconds for a viewer to call up a program while channel surfing so fast most viewers won't notice the lag.
On top of that, the Net's inherent ability to be interactive could give IP-TV providers an edge. Using Microsoft's software, one company in the US plans to allow customers to set up their personal channels for things like slideshows of digital pictures.
In the US, phone giants like SBC and Verizon plan to deliver their signals using IP TV. While cable companies broadcast all their channels at once to the TV, blocking those that aren't paid for, with IP TV, SBC and Verizon will deliver only programs that viewers request. That essentially makes a limitless amount of content available, just as there's no cap on the number of Web sites
Leading telecommunications firm Philippine Long Distance Telephone Co. (PLDT) is seriously considering jumping on the triple play bandwagon via IP television, a fast growing service that merges the Internet and television, in order to penetrate the growing video market in the country.
IPTV or Internet protocol television is a system where digital TV service is delivered to subscribing consumers using IP over a broadband connection. This service is often provided in conjunction with video on demand and may also include Internet services such as Web access and voice over Internet protocol (VoIP).
IPTV is expected to grow at a brisk pace in the coming years both in the Asian region and worldwide as broadband is now available to more than 100 million households. Many of the world's telecommunications providers have either gone into or are exploring IPTV as a new revenue opportunity from their existing markets and as a defensive measure against encroachment from more conventional cable TV services. IPTV also serves as an alternative terrestrial, satellite, and cable TV.
PLDT chairman Manuel Pangilinan expects that IPTV will be a fast growing business in the Philippines, owing to the continuous growth of the broadband market and a large base of tv service subscribers.
"Like 3G, IPTV can lead to full digital deployment of products and services. Through IPTV, we will be able to deliver high definition TV for the AB market," he said.
PLDT has been investing heavily on its net generation network (NGN) to be able to deliver more efficiently and cost-effectively not only voice, but also data, and in the near future, video. Bulk of its fixed line investments starting next year will be in NGN.
Triple play, the biggest thing in fixed line telco, involves offering voice, video, and data as an integrated service bundle. The active element of triple play, IPTV, has been giving long-suffering telcos worldwide a new lease on life, as it has helped reduce churn, challenging cable players and helping reclaim voice minutes lost to mobile. A lot of telcos have invested heavily in their networks and are now trying to get a return by offering more video and data, banking on IP TV to boost their broadband subscriber base and generate new streams of revenue.
With PLDT's fixed line debts reaching more manageable levels (down to $1.4 billion by year-end, or half of its $2.8 billion level in 2002), company officials said PLDT's ability to invest in the next generation network (NGN or the IP network that would enable PLDT to deliver not only voice but also data and video to its subscribers), as well as in fixed and wireless broadband initiatives, has been enhanced.
Pangilinan, in an interview, said PLDT is now looking at various possibilities. "We have to reassess what our approach will be on the video business because new technologies are developing that could actually negate the advantage of existing technologies that are placed on the cable TV platform, new technologies that are more versatile, less expensive," he explained.
Compared to cable TV and satellite TV, Pangilinan said IPTV may be a better and cheaper approach to delivering content to the homes.
The PLDT chairman's optimism about IPTV prospects seem to have been largely influenced by the success of Hong Kong incumbent PCCW, which launched its NOW TV service across its DSL lines in September. 2003 and has since become something of a poster child for IPTV. In early 2003, PCCW was losing 27,000 lines a month to its competitors. By March this year, after the launch of NOW and its next generation fiber services, that was down to 6,000. PCCW now has around 450,000 IPTV customers.
"We'd like to see what accounted for the success of PCCW in Hong Kong. They have a video service on their broadband and they were very successful," Pangilinan said.
PCCW funds some of its own content, including a 24-hour news channel, and uses its own broadcast facilities. As for PLDT, following its failed attempts to acquire broadcasting companies ABC 5 and GMA 7, Pangilinan believes that acquiring content should not be a problem even without PLDT having its own content producer like a TV station.
This new wave of TV-related innovation called IP-TV is just starting to reach consumers. Just as the service known as voice over Internet protocol (VoIP) is poised to revolutionize the phone business by offering a low-cost Internet alternative to traditional phone service, IP-TV could bring Internet-style interactivity and flexibility to the TV set.
Over the next decade, the long-hyped notion of "video-on-demand" is expected to become commonplace, allowing consumers to watch what they want, when they want to. They'll be able to control their IP-TV service remotely through a PC or a cell phone. And they'll be able to personalize their content, whether they want to watch a basketball game or home movies.
Reason for skepticism however abounds. Over the years, a number of Internet-TV efforts such as Microsoft's WebTV have come up short. However, IP-TV projects are already under way worldwide, courtesy of big phone companies in Canada, Europe, Asia, and some rural companies in the US.
According to analysts, if IP-TV takes off, it will provide much-needed new opportunities to traditional phone companies that have built their businesses around wire lines. Besides losing customers to cell carriers in recent years, they've been losing out to cable-TV companies that are producing their own phone and Internet services. In many regions worldwide, cable providers have grabbed 30 percent of the traditional phone customers.
IP-TV gives the phone companies a way to stop the bleeding. Over time, IP-TV could put the phone companies back on the offensive. Cable outfits have spent billions of dollars in recent decades to build their high-capacity networks, which can deliver hundreds of channels to each household. But for the most part, everyone gets the same offerings, with few variations
Analysts point out IP-TV can match that basic model, despite the fact that one can actually receive only the program they choose not the other 200-plus channels that the cable system sends to the set-top box. With the right networking gear, it takes just milliseconds for a viewer to call up a program while channel surfing so fast most viewers won't notice the lag.
On top of that, the Net's inherent ability to be interactive could give IP-TV providers an edge. Using Microsoft's software, one company in the US plans to allow customers to set up their personal channels for things like slideshows of digital pictures.
In the US, phone giants like SBC and Verizon plan to deliver their signals using IP TV. While cable companies broadcast all their channels at once to the TV, blocking those that aren't paid for, with IP TV, SBC and Verizon will deliver only programs that viewers request. That essentially makes a limitless amount of content available, just as there's no cap on the number of Web sites
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