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Telecom Sector on the Edge: Driving the Future of IPTV

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Presentation on theme: "Telecom Sector on the Edge: Driving the Future of IPTV"— Presentation transcript:

1 Telecom Sector on the Edge: Driving the Future of IPTV
The Future of Voice January 2007 ITU Headquarters Geneva, Switzerland Jaroslaw K. Ponder Policy Analyst ITU Strategy and Policy Unit The views expressed in this presentation are those of the author and do not necessarily reflect the opinions of the ITU or its Membership.

2 Starting points Migration to the IP-environ-ment
Convergence of three worlds Evolving regulatory environment Socio-economic development Investment Innovation Catch-up Ongoing regulatory r. Competitivness international telecommunication union

3 Telecom and Broadcasting
Monopoly Competition Narrowband Broadband Traditional networks NGNs Telco Sector Telecoms Telecoms/IT Convergence Wireline Wireless Convergence Voice Data / Video Triple Play National Global Video Services Ubiquitous, personalized and interactive service Pasive Interactivity General Personalised international telecommunication union

4 Three Times VoIP Video over IP Voice over IP Velocity on IP IPTV (QoS)
VoD Interactive MS Web TV Mobile TV VoIP / PSTN IP Telephony VoB VPN Internet Internet Mobile and Wireless 2G, 3G, 4G WiFi WiMAX (d,e) Satelite Fixed Infrastructure xDSL FTTx Cable TV Velocity on IP international telecommunication union

5 Broadband Access, 2005 international telecommunication union Source: ITU (2006), World Information Society Report 2006,

6 Telecom Sector in Transition
Broadband/Mobility Now Service A Service B Service C Net. A Net. B Net. C Future Services A, B, C IP Platform (QoS) Access Networks Video NGN Simulation Emulation Multimedia Generalized mobility Convergence Integrity Multi-layer orientation Open character Voice SoD VoIP QoS USO Reg. Int. Fixed: PSTN Mobile: 2G Data Next Generation Services QoS, Mobility, Interactivity, Personalization, N-play Interactivity IP-environment Interconnection / Emerging markets / Universal services / Competition Numbering / Quality of Services / Emergency Access / Consumer Protection international telecommunication union

7 Broadcasting/ Satelite
Converging Markets Broadcasting/ Satelite Fixed Telec. Cable-TV Mobile Telec. Wire less Infr. less s. prov. Voice Internet Television/ Radio Services on Demand (VoD…) Note: historically, the main service provided over the access platform international telecommunication union

8 NGN Considerations… NGN will lead to re-monopolization in the telecommunication sector? Less Bottlenecks / New bottlenecks Dynamic efficiencies Competition? NGN as an effect of competition NGN enhances level of competition New interconnection regime? international telecommunication union

9 NGN Considerations… NGN will enable structural separation?
Networks / Services / Applications Voice loses meaning? Tech: IP protocol Business: Voice plus Content Present regulatory framework remains relevant? Evolution is unavoidable Convergence (T+B+C) international telecommunication union

10 New challenge for telecom sector
Driving the Future of IPTV Chairman Report from Executive Round Table Market, Regulatory Trends and Policy Options in Europe Market, Regulatory Trends and Policy Options in Asia / Pacific IPTV Global Technical Workshop 12-13 October 2006 / international telecommunication union

11 IPTV: Implications Infrastructure requirements
Margin Infrastructure requirements 6-16 MBit/s for HDTV / Narrow Band TV Bandwidth / Generalized mobility ADSL2+/VDSL/FTTx/3G/4G/WiFi/WiMAX Standardization process (Arch., STB) Compression Methods Business Model Value Creation Chain / True margin redistribution Triple-play Distribution platforms /Interaction Broadcasting /One way communication Regulatory reform Revenues Users international telecommunication union

12 IPTV: Market Trends Beijing RIC Information Consulting (2005): Global
2006: the global revenue of IPTV service  $8 billion with over 8 million subscribers. Users: 2004: 2.19 million  2008: million 21st Century Communications World Forum : 2006: 2-3 Million U. Gartner (2006): Europe 2006: 3.3 million users 2010: more than 16 Million Users Additional revenues generated will grow from 336 Million to 3 Billion IPTV Users in Europe Source: Gartner (2006) international telecommunication union

13 Case Study on Hong Kong: PCCW
Strong Demand for Residential Installed 608 Pay channel customers Pay Channel Customers & ARPU Commercial +38% y-o-y 26 549 Installed pay channel services 22 Steadily rising ARPU as new content introduced (’000) Reached 654, at end of August Pay channel customers as % of total installed 441 444 Mini Packs launched 17 26 (HK$/ month) 391 73% 71% 61% 53% 39% 20% 118 114 110 105 70 57 0% 100% H2 H1 30 60 90 120 361 22 10 269 271 17 418 A small territory of about 1000 km2 7 million people 2.3 million households GDP in 2005 is US$ billion Broadcasting sector contributes 0.4% to GDP Telecom sector contributes 3.3% to GDP Fixed services Fully liberalised since 2003 No pre-set limit on number of licences 5 active operators 3.8 million telephone lines 1.7 million broadband subscribers 24% broadband population penetration More than 76% of households have a choice of more than two broadband networks Broadcasting 2 free-to-air (UHF band) broadcasters 4 programming channels Virtually universal coverage Digital terrestrial services in 2007 with plan to shut down analogue services in 2012 4 pay-TV operators Coaxial cable, satellite, fixed line (including IPTV) Over 1.4 million subscribers Nearly 300 programming channels Out of the 4 pay TV operators, 3 provide IPTV services Services launched in end 2003 700,000 subscribers 30% household penetration Nearly 200 Programming channels 192 369 147 10 254 182 106 29 H2 H1 H2 H1 H2 H1 2003 2004 2005 2006 2003 2004 2005 2006 international telecommunication union Source: ITU-T IPTV Global Workshop, KT Case Study, Mr Berriman

14 Case Study on Hong Kong: PCCW
Broadband Lines Growing penetration rate of among consumer NETVIGATOR (’000) +16% y-o-y 998 Wholesale 68% 953 59% 53% Business 48% 857 Consumer 796 28% 753 703 629 H2’03 H1’04 H2’04 H1’05 Maintained low churn rate of consumer NETVIGATOR since launch Dropped by half Before launch 2003 2004 2005 2006 Jun-05 international telecommunication union Source: ITU-T IPTV Global Workshop, KT Case Study, Mr Berriman

15 IPTV: Drivers and Obstacles
Telecom competition Inter-modal comp. Pricing and sell strategies Broadband deployment Content providers New ubiquitous distribution platform Convergence Bundling strategies User Switching behavior Obstacles Regulatory environment Standardization process Margin redistribution New form of service Interactivity User Cost of the STB / Hardware providers / Operators Willingness to migrate Willingness to pay for: TV Services / Video on Demand / Next generation services Consumer protection international telecommunication union

16 IPTV: Regulatory considerations
Application and service New markets Fosters competition New architecture and bottlenecks New cost models Market analysis Cross-subsidies Boundaries between infrastructure and the content Cross-ownerships Policy/Regulatory Goals Socio-economic goals Investment Innovation Regulatory Focus Static and dynamic efficiences Monopolistic bottlenecks Market failures Ex-post r. v. ex-ante r. international telecommunication union

17 IPTV regulatory requirements
Infrastructure From legacy infrastructure to investment Inter-modal competition Local loop unbundling Interconnection Universal service Net neutrality Symmetric regulation Quality of services Consumer protection Definition of IPTV in legal systems IP Hybrid-service / Information service / Broadcast service / Linear versus non-linear services international telecommunication union

18 Meaningful concepts Neutrality Universality Interoperability
Technological neutrality Net-neutrality Universality Universal service New platforms… Interoperability Standardization Asymmetric regulation Ex-ante versus Ex-post approaches Unbundling and access pricing international telecommunication union

19 Conclusions All-IP environment accelerates convergence process of telecom and broadcasting industry Required strict distinction of transport and content regulation Imposing old regulatory schemes to the new technologies may weaken growth dynamics Regulatory forbearance will impact growth dynamics of the IPTV market Institutional issues New dimension of regulatory reform Competition issues All-IP environment fosters competition international telecommunication union

20 Thank you for your attention!
International Telecommunication Union Jaroslaw K. Ponder Policy Analyst ITU Strategy and Policy Unit international telecommunication union

21 Useful Links Full version of presentation: ITU work on NGN and IPTV:
ITU work on NGN and IPTV: Strategy and Policy Unit: Shaping Tomorrow’s Networks international telecommunication union

22 NGN and the ITU Regulatory considerations New Initiatives Programme
What rules for IP-enabled NGNs? The Regulatory Environment for Future Mobile Multimedia Services The Future of Voice ITU Study Groups Question 6-2/1: Regulatory impact of NGNs on interconnection Question 12-2/1: Tariff policies, tariff models and methods of determining the costs of services on national telecommunication networks including NGNs Question 19-1/2: Strategy for migration from existing networks to NGNs for developing countries WTDC 2007 in Doha Trends in Telecommunication Reform 2007 Global Symposium for Regulators 2007 international telecommunication union

23 NGN and the ITU: IPTV IPTV Focus Group
Created in 2006 to deal with the standardization issues related to IPTV and link between IPTV and NGN Meetings and first outcomes July 2006, Geneva, Switzerland October 2006, Busan, Korea ITU Global IPTV Technical Workshop Regulation / Market / Technologies October 2006, Seoul, Korea international telecommunication union

24 ITU New Initiatives Programme
Focus ICT innovations New market developments Emerging regulatory challenges Three main outcomes : Research programmes International expert workshops Publications international telecommunication union

25 New Initiatives Programme
The Future of Voice Research Programme Background Materials Page Three Background Papers Three Regional Studies Asia Africa South Eastern Europe Latin America Workshop: January 2007 New Initiatives Programme international telecommunication union


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