Nordic Telecoms Bet on TV Move

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Nordic Telecoms Bet on TV Move

• Victoria Reynolds
• Megan Hettig
• Suzanne Hanks

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Summary of the Article

• Nordic television service providers have been
  looking for new sources of revenue as traditional
  fixed line business declines
• Nordic telecom is gearing up for their
  distribution of television over broadband
  internet
• Denmark's TDC AS launched its full fledge
  internet protocol TV service in February.
• Sweden's TeleSonera AB has begun a major
  marketing campaign in its home market.
• Norways Telenor ASA has some IPTV services in
  Sweden and its planning a major launch next year
• Biggest competition is with existing TV services
  (cable)

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What is IPTV?

• Stands for Internet Protocol TV
• IPTV delivers TV programs over broadband internet
  to an ordinary television set via receiver box
• IPTV is typically supplied by a broadband
  operator using a closed network system
• Simply put IPTV is television content that,
  instead of being delivered via traditional
  formats and cabling, is received by the viewer
  through the technologies used for computer
  networks

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What is IPTV continued

• Although IPTV can be purchased separately, it is
  often provided in conjunction with video on
  demand and may be bundled with internet service
  such as web access and VoIP.
• Commercial bundling of IPTV, VoIP and Internet
  service is referred to as a triple play. The
  triple play entices customers to purchase all
  three products at a reduced rate. Both cable
  operators and telco operators are starting to
  offer all three on one wire, which is more cost
  effective..
• Video Explanation of IPTV

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Plans for Future

• In order to get consumers attention on this
  product, Swedens marketing push is to offer free
  IPTV to broadband subscribers.
• Depending on success TDC has in Denmark, the
  company may start selling IPTV service in other
  Nordic countries.
• Telenor is developing an upgraded version that it
  plans to start selling next year across
  Scandinavia.

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Stats of IPTV

• Currently, it is estimated that only 2 of the 4
  million households with a TV in Sweden have the
  IPTV service
• By 2010, research firm IDC estimates 675,000 of
  all Swedish households (about 14) will be
  connected to IPTV.
• Revenue is expected to grow to 130 million in
  2010 against 16 million in 2006.

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Advantages of IPTV

• Its flexibility. Viewers arent tied only to
  broadcasters schedules, they can watch movies
  and other programming when they want in addition
  to regular TV.
• IPTV can reach a wider market than cable, because
  it uses the standard phone network.
• TeliaSoners offering subscribers can order and
  watch movies on demand, surf the internet via the
  TV at home and view photos stored on TeliaSoners
  server.

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Advantages of IPTV continued

• Content remains in the network and only the
  content the customer selects is sent into the
  customers home.
• That frees up bandwidth, and the customers
  choice is less restricted by the size of the
  pipe into the home.

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Challenges for IPTV

• Uncertain if consumers will perceive IPTV as
  comparable with what they already have. Offers
  less channels.
• Ex Swedish cable company Com Hem AB provides
  around 130 channels, while Telenors satellite
  operator Canal Digital has 64. TeliaSoneras IPTV
  services has 32 channels.
• Cable TV also has potention to offer similar
  flexibility to IPTV it will be hard to compete
  with cable.

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Challenges for IPTV continued

• Network capacity also restricts the content
  available. Phone networks arent yet big enough
  to support a large number of channels.
• Because of the internet connection customers
  privacy is more easily compromised than is with
  traditional TV or satellite network.
• IPTVs relatively new untested technology could
  give rise to technical problems.

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ITPV in the US

• In the US, a series of technical glitches forced
  ATT Inc. to delay the roll out of its IPTV
  services because of problems with software,
  mainly provided by Microsoft Corp.
• Full launch was scheduled for late 2005, but took
  until mid 2006 to bring service to just one
  market (San Antonio)
• ATT recently introduced its services to limited
  areas such as Milwaukee and Dallas-Fort Worth.
  They plan to continue expanding.

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IPTV Marketing

• Overall the Advertisements are showing the
  product as the New Thing, hip and fun
• They appear to be targeting young adults
• Canal Digital and Elisa new commercial for IPTV
• Tele2 Vision commercial for IPTV accessories