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IPTV Impact on Public Networks™

Dittberner Associates
January 1, 2006
200 Pages - SKU: BCEQ1285555

Abstract Table of Contents Related Reports

This report evaluates the new service opportunities and revenue sources available to telcos to justify deploying IPTV. Dittberner appraises technology offerings and the competitive environment currently driving the market, network requirements, standards issues as well as insights into possible service offerings and their impact on manufacturers, telecom service providers, and content providers.

The trends analysis portion of the study is an in-depth description of strategies adopted by pioneering telecom service providers as well as the foreseeable impact on network architectural issues, equipment pricing, and ultimately subscriber growth.

Some political issues must still be addressed since many governments’ policies governing communication systems and broadcasts systems are expressly aimed at keeping the two businesses separate. Almost all governments are encouraging a switchover to digital TV and have scheduled dates when over-the-air analog TV broadcasts will cease. IPTV offers a convenient avenue for governments to ease the transition to a digital TV network.

Dittberner believes that IPTV will be a successful, but not an easy deployment. With IPTV, broadband networks will combine the best characteristics of corporate computer networks and the public telephone system. The IPTV network will be made up of metropolitan intranets interconnected to form a public computer network. This new network will offer a new consumer experience and also new revenue opportunities as the Internet community of developers exploits the network’s capabilities. While IPTV by itself will not transform the networking industry, the changes ushered in by its introduction will have a major impact on the current business models of telecom service providers.

I. THE NEED FOR IPTV — INTRODUCTION

A. DELIVERING TV OVER IP

1. Definition of IPTV

2. IPTV Services

3. The Effect of the All-IP Network Trend

4. The Effect of Digital TV Switchover

5. Benefits of the Internet Protocol

6. Drawbacks of the Internet Protocol

B. EMERGING TV NETWORK ARCHITECTURE

1. Today’s Approach — Switching at the TV

a) Benefits

b) Limitations

2. New Approach — Switching in the Network

a) Benefits

b) Limitations

3. Local TV System Description

a) Regional Head Ends and Super Head Ends

b) Distribution Network

c) Metro Network

d) Access Nodes

e) Access Network

4. Services Possible with a Local IPTV Network

5. Comparison of IPTV Services Providers’ Offerings

6. Comparison to Traditional Broadcast TV

a) Advantages

b) Disadvantages

7. Obstacles to Successful Deployment

a) Access Upgrade Needed

b) Aggregation and Core Upgrades Needed

c) Lack of Large NGN Network Deployments

d) Lack of Large IPTV Network Deployments

e) Large Network OSS/BSS Services Experience

f) End-to-end Quality Assurance

g) Home Networks

h) Content Acquisition and Management

i) Stiff Competition

C. TRENDS DRIVING IPTV EMERGENCE

1. Erosion of Telephone Revenue

2. Competition for Internet Access Revenue

3. Triple-Play Services

4. New Source of Revenue

a) Advertising Revenue

b) VoD Revenue

5. New Services Potential

a) Community and Residential Services

b) Enterprise Services

c) Small Business Services

6. Growing Role of IP in All Types of TV Networks

D. DITTBERNER PERSPECTIVE ON THE NEED FOR IPTV

1. Delivering TV over IP

2. Emerging TV Architecture

3. Trends Driving IPTV Emergence

II. EMERGING IPTV STANDARDS

A. IMS — AN NGN ARCHITECTURE

B. TR-059 — AN ACCESS ARCHITECTURE

C. PROTOCOLS TO TRANSPORT IPTV DATA PACKETS

1. Internet Protocol

2. User Datagram Protocol

3. Real-Time Protocol

D. PROTOCOLS TO MANAGE FLOW OF IPTV DATA

1. Real-Time Control Protocol

2. Real-Time Streaming Protocol

3. Resource Reservation Protocol

4. Internet Group Management Protocol

E. IPTV NETWORK COMPONENTS

1. Set-Top-Box

2. Head End

a) Integrated Receiver Decoder (IRD)

b) Integrated Receiver Transcoder (IRT)

c) Real-Time Encoder (RTE)

d) Server Farms

e) Core Mux

f) Network Adaptor

3. IGMP Network Element

a) IGMP Snoopers

b) IGMP Router

F. PROVIDING QOS IN IPTV NETWORKS

1. CoS

2. VLANs

3. MPLS

4. VPLS and HVPLS

G. IPTV CHANNEL CODECS

1. Compression

2. MPEG-2

3. MPEG-4 Part 10/H.264/AVC

4. Windows Media 9/ VC-1

5. Codec Choice

H. DITTBERNER PERSPECTIVE ON IPTV STANDARDS

III. IPTV NETWORK DESIGN

A. ACCESS NETWORK DESIGN REQUIREMENTS

1. Data Rates for Common IPTV Services

2. Required Access Data Rate

B. METRO NETWORK DESIGN REQUIREMENTS

1. Traffic Patterns

a) Multicast Network Operation

b) Unicast Network Operation

c) Modeling Unicast Bandwidth Demands

C. QUALITY MANAGEMENT

1. QoS

a) QoS Requirements for Video

b) Traffic Management in Legacy IP Networks

c) QoS Methods

d) The Importance of VLANs in Maintaining QoS

2. The Importance of Network Resiliency

3. Monitoring QoS

D. DITTBERNER PERSPECTIVE ON IPTV NETWORK DESIGN

1. Access Network

2. QoS Management

3. IPTV Traffic Patterns

IV. TECHNOLOGY CHOICES

A. DISTRIBUTION OF BROADCAST TV

1. Hybrid-Fiber Coax System

2. RF Overlay

3. Switched Digital Video

B. PREMISE NETWORKS

1. Issues

2. Home Network Solutions

a) Phoneline

b) Coax Cable Network

c) Powerline Network

d) Wireless Network

C. ACCESS NETWORKS

1. DSL

a) Media Access Controller (MAC)

b) Bonding

c) Technical Issues

2. FTTN

3. FTTC

4. FTTH

5. FTTH Access Protocols

6. Hybrid Fiber Coax Access Network

7. Satellite

8. Fixed Wireless Access

a) MMDS

b) LMDS

c) Broadband Radio Services (BRS)

d) WiMAX FWA

9. Mobile TV

D. DITTBERNER PERSPECTIVE ON TECHNOLOGY CHOICES

1. Broadcast Technology

2. Home Network Technology

3. Access Network Technology

V. IMPACT OF IPTV ON NETWORK EVOLUTION

A. NETWORK IMPACT OF IPTV BANDWIDTH DEMANDS

1. Multicast Traffic

2. Effect of HDTV Transition

B. POTENTIAL IPTV NETWORK EVOLUTIONS

1. Reconfigurable Optical Add/Drop Mux (ROADM)

2. Collocated Server Farms

C. THE NEED TO SEPARATE INTERNET ACCESS AND IPTV

D. LONG-HAUL NETWORK IMPACT

E. IMPACT ON ACCESS NETWORK INFRASTRUCTURE COSTS

1. Effect of TV Distribution on Network Cost

2. Impact on OSS

F. DITTBERNER PERSPECTIVE ON IPTV NETWORK EVOLUTION

1. More Rapid Adoption of FTTH

2. Optical Solutions

3. New Local Exchange Network

VI. MARKET CONDITIONS

A. ADDRESSABLE MARKET — BROADBAND INFRASTRUCTURE

B. CONSUMER PREFERENCE: CABLE, DISH OR IPTV

1. Content Preference

2. Price Preference

3. Practical, New Services

C. IPTV MARKET CONSIDERATIONS

1. Subscriber Profile

2. Competition for Delivery of TV Services

3. State of the Current Infrastructure

4. Government Policy

D. DITTBERNER’S IPTV MARKET PERSPECTIVE

VII. IPTV BUSINESS ISSUES

A. THE IMPORTANCE OF PROVIDING CONTENT

1. Service Provider as Content Supplier

a) Strengths

b) Weaknesses

2. Common Carrier Renting Network Access

a) Strengths

b) Weaknesses

3. IPTV’s Importance to DSL Business Case

B. INCREASING SIGNIFICANCE OF CONTENT CREATORS

C. CONTENT ACQUISITION

D. CONTENT MANAGEMENT

E. NEW SERVICES

1. Gaming

2. Private Channels

3. Walled Gardens and Web Portals

4. Small Business Services

F. ANCILLARY BENEFITS

G. DITTBERNER PERSPECTIVE ON IPTV BUSINESS ISSUES

VIII. IPTV MARKET FORECAST

A. IMPACT OF IPTV ON THE NETWORK

1. Model Network Architecture

2. Model Town Size

3. Bandwidth Needed for IPTV vs Internet Access

4. Equipment Cost Increase to Offer IPTV

B. IPTV SUBSCRIBER GROWTH FORECAST

1. General Assumptions

2. Global Segmentation

3. Regional Forecasts

4. IPTV Take-Up Rages Assumptions

5. Global IPTV Subscriber Forecast

a) Overall Results

b) Regional IPTV Market View 2009 and 2013

6. Asia & Pacific Country Analysis

a) Regional Summary

b) China

c) Japan

d) South Korea

7. Central/South America

8. Europe

a) Summary Results

b) Eastern Europe

c) Central Europe

d) Western Europe

9. North America

10. Africa

C. IPTV NETWORK EQUIPMENT MARKET FORECAST

1. Global Market Growth Forecast

a) Overall Results

b) Effect of Broadcast TV and VoD on Market Size

c) Regional Market Share 2009 and 2013

2. Regional Market Forecasts

a) Asia & Pacific

b) Central/South America

c) Europe

d) North America

e) Africa

D. IPTV EQUIPMENT MARKET FORECAST

1. Set-Top Market Forecast

a) Set-top Cost Model

b) Global and Regional STB Market Forecast

2. IPTV Head-End Market Forecast

a) Subscribers per Head End Assumption

b) Head End Cost Assumption

c) Head End Eqipment Market Forecast

3. IPTV Middleware Market Forecast

4. TOTAL IPTV Equipment and Software Market Forecast

E. IPTV — IMPACT ON SERVICE PROVIDERS

1. Increased Costs for IPTV

2. Increased Revenue from IPTV

3. IPTV Content Fees

4. IPTV Payback Period

F. DITTBERNER PERSPECTIVE ON THE IPTV MARKET

1. Cost Impact

2. Subscriber Growth

3. Impact on the Network Equipment Market

4. Service Provider Opportunity

IX. TELECOM OPERATORS PLANS AND EXPERIENCES

A. VERIZON

1. Profile

2. IPTV Strategy

3. Network Plans

4. Systems and Suppliers

5. Services and Pricing

6. Implementation Issues

7. Current Status

B. SBC/AT&T

1. Profile

2. IPTV Strategy

3. Network Plans

4. Systems and Suppliers

5. Services and Pricing

6. Implementation Issues

7. Current Status/Future Plans

C. BELGACOM

1. Profile

2. IPTV Strategy

3. Network Plans

4. Systems and Suppliers

5. Services and Pricing

6. Implementation Issues

7. Current Status/Future Plans

D. PCCW

1. Profile

2. IPTV Strategy

3. Network Plans

4. Systems and Suppliers

5. Services and Pricing

6. Implementation Issues

7. Current Status/Future Plans

E. BRITISH TELECOM

1. Profile

2. IPTV Strategy

3. Network Plans

4. Systems and Suppliers

5. Services and Pricing

6. Implementation Issues

7. Current Status/Future Plans

F. FASTWEB

1. Profile

2. IPTV Strategy

3. Network Plans

4. Systems and Suppliers

5. Services and Pricing

6. Implementation Issues

7. Current Status/Future Plans

G. FRANCE TELECOM

1. Profile

2. IPTV Strategy

3. Network Plans

4. Systems and Suppliers

5. Services and Pricing

6. Implementation Issues

7. Current Status/Future Plans

H. SWISSCOM

1. Profile

2. Network Plans

3. Systems and Suppliers

4. Implementation Issues

5. Current Status/Future Plans

I. SASKTEL

1. Profile

2. IPTV Strategy

3. Network Plans

4. Systems and Suppliers

5. Services and Pricing

6. Implementation Issues

7. Current Status/Future Plans

X. MAJOR VENDORS OF IPTV NETWORKS

A. INTRODUCTION

1. Service Provider Equipment

2. TV and Home Network Equipment & Software

3. Network Build/Integration

B. GENERAL — EVALUATION CRITERIA USED

1. Network Equipment Ratings

2. TV and Home Network Equipment & Software

3. Network Build/Integration

C. EVALUATION CRITERIA — TV AND HOME NETWORK

1. TV and Home Network Product Categories

a) Head End

b) Set-Top-Box

c) Set-Top-Box Browser

d) Middleware

e) Conditional Access/Digital Rights Management

f) OSS/BSS

g) VoD Streaming Servers

h) VoD/PVR Software

i) Home Gateway

j) Home Networking

2. Criteria to Evaluate Vendors in Each Category

a) Vendor or Partner

b) Executive Acceptance in World Markets

c) Aggressive Management Team

d) Aggressive External Marketing Agreement

e) Established Effective Distribution Channels

f) Financially Sound

g) Ability to Afford Expansion

h) Substantial Installed Base of the Product/Software

i) Success in Selling to Major North American Carriers

j) Recognized Leaders in its Product Category

D. EVALUATION CRITERIA - NETWORK BUILD/INTEGRATION

1. Strength In Home Market

2. Global Reach

3. Experience as Prime Network Contractor

4. Network Design and Construction Capability

5. Systems Integration Capability

6. Can Provide Full EF&I Services

7. Strong OSS/BSS Implementation Capabilities

E. SUMMARY RATINGS

F. MAJOR VENDORS’ SWOT ANALYSIS

1. Alcatel

a) Profile

b) Strengths

c) Weaknesses

d) Opportunities

e) Threats

f) Suggestions

2. Cisco Systems

a) Profile

b) Strengths

c) Weaknesses

d) Opportunities

e) Threats

f) Suggestions

3. Ericsson

a) Profile

b) Strengths

c) Weaknesses

d) Opportunities

e) Threats

f) Suggestions

4. Huawei Technologies

a) Profile

b) Strengths

c) Weaknesses

d) Opportunities

e) Threats

f) Suggestions

5. Lucent Technologies

a) Profile

b) Strengths

c) Weaknesses

d) Opportunities

e) Threats

f) Suggestions

6. Nortel Networks

a) Profile

b) Strengths

c) Weaknesses

d) Opportunities

e) Threats

f) Suggestions

7. Siemens

a) Profile

b) Strengths

c) Weaknesses

d) Opportunities

e) Threats

f) Suggestions

G. CONCLUSIONS

1. Active Leaders

a) Alcatel

b) Siemens

2. Involved Players

a) Cisco Systems

b) Huawei

c) Lucent

3. Market Followers

XI. MIDDLEWARE FOR IPTV

A. MICROSOFT

1. Profile

2. Assessment

B. MYRIO

1. Profile

2. Assessment

C. ORCA INTERACTIVE

1. Profile

2. Assessment

D. DITTBERNER PERSPECTIVE

XII. CONCLUSIONS

TABLE OF FIGURES

Figure 1: TV Signal Distribution to Residence

Figure 2: Generic IPTV Network

Figure 3: Ethernet Frame Indicating CoS and VLAN ID

Figure 4: MPLS Network: Physical, Operational, and Logical Views

Figure 5: HVPLS Operation

Figure 6: Unicast Delivery of VoD or PVR Services

Figure 7: Double Ring IPTV Network

Figure 8: Importance of VLANs for QoS Management

Figure 9: IPTV Network Showing Redundancy

Figure 10: Typical Hybrid Fiber-Coax Network

Figure 11: Streaming Hub Diagram

Figure 12: Typical RF Overlay Network

Figure 13: Switched Video Network

Figure 14: Typical Point-to-Multipoint FTTH Network

Figure 15: IPTV Metro Network Design

Figure 16: Proposed HIPTV Network (IPTV for HDTV)

Figure 17: IPTV Network Using ROADM to Distribute VoD Traffic

Figure 18: Network Traffic Patterns During the Day and the Evening

Figure 19: IPTV Network with Collocated VoD Server Farms

Figure 20: IPTV Network Model for Cost Analysis

Figure 21: Global Broadband Access Regional Shares

Figure 22: Double Ring IPTV MAN

Figure 23: Global IPTV Market 2009

Figure 24: Global IPTV Market 2013

Figure 25: Comparison of 3 Forecasts of China’s IPTV Market Growth, 2005-2009

Figure 26: Market Size Variations with Broadcast TV and VoD ($000’s)

Figure 27: IPTV Regional Equipment Market in 2009 ($000’s)

Figure 28: IPTV Regional Equipment Market in 2013 ($000’s)

Figure 29: Global STB Market 2009 ($000’s)

Figure 30: Global STB Market 2013 ($000’s)

Figure 31: Verizon FTTH Network

Figure 32: Verizon Metro Network

Figure 33: SBC’s U-Verse IPTV Network

Figure 34: FastWeb FTTH Network

Figure 35: FastWeb ADSL Network

Figure 36: France Telecom IPTV Network

Figure 37: SaskTel IPTV Network

Figure 38: IPTV Vendors’ Rankings

LIST OF TABLES

Table 1: Comparison of Service Providers IPTV Offerings

Table 2: Data Rates after Compression for Various Codecs

Table 3: Data Rates for Common IPTV Services

Table 4: VoD Peak Bandwidth Requirements

Table 5: DSL Standard Rates

Table 6: Comparison of FTTH Access Protocols

Table 7: Mobile TV Format Comparison

Table 8: Multicast Data Rates Needed in China and U.S

Table 9: Comparison of VDSL to IPTV Deployment Costs

Table 10: Countries with Top Number of Broadband Access Subscribers

Table 11: Average Monthly Incremental Revenue per Triple Play Subscriber

Table 12: Typical MAN Network Size

Table 13: TV Services Assumptions

Table 14: Bandwidth Required for IPTV Services

Table 15: Cost Increase per Link to Offer IPTV

Table 16: Cost Increase per Subscriber to Offer IPTV

Table 17: Cost Increase, per Subscriber 2006-2013

Table 18: Percent of Regional Population Included in Selected Countries

Table 19: IPTV Take-up rate Assumptions

Table 20: Global IPTV Subscriber Forecast (000’s)

Table 21: Asia & Pacific Region Subscriber Forecast (000’s)

Table 22: China Subscriber Forecasts (000’s)

Table 23: Japan Subscriber Forecast (000’s)

Table 24: South Korea Subscriber Forecast (000’s)

Table 25: Central/South America Subscriber Forecast (000’s)

Table 26: Europe Subscriber Forecast (000’s)

Table 27: Eastern Europe Subscriber Forecast (000’s)

Table 28: Poland Subscriber Forecast (000’s)

Table 29: Western Europe Subscriber Forecast (000’s)

Table 30: North America Subscriber Forecast (000’s)

Table 31: Africa Subscriber Forecast (000’s)

Table 32: Global Increase in Network Equipment Market 2006-2013 ($000’s)

Table 33: Asia & Pacific Forecasted Equipment Market ($000’s)

Table 34: Central/South America Forecasted Equipment Market ($000’s)

Table 35: Europe Forecasted Equipment Market ($000’s)

Table 36: North America Forecasted Equipment Market ($000’s)

Table 37: Africa Forecasted Equipment Market ($000’s)

Table 38: Set-top -box Cost Model

Table 39: Countries Using Either SDTV STB or HDTV+DVR STB

Table 40: Global and Regional STB Market Forecast

Table 41: Subscribers per Head End 2006-2013

Table 42: Head End Cost Assumptions ($000s)

Table 43: Head End Equipment Market Forecast

Table 44: Middleware Revenue Assumptions

Table 45: Global and Regional Middleware Market 2006-2013

Table 46: Total Global market for IPTV Equipment and Software ($000’s)

Table 47: Per Subscriber IPTV Costs

Table 48: Per Subscriber IPTV Revenue

Table 49: Service Provider Revenue Forecast ($000’s)

Table 50: IPTV Service Provider Payback Period

Table 51: Comparison of VDSL vs FTTx Payback Periods

Table 52: IPTV Major Equipment Vendors’ Ratings

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