Rural telcos well situated to offer IPTV

Beginning February 1, Bruce Telecom (BT) will offer 180 TV channels - including 22 HD channels - and video-on-demand services over an IPTV network using MPEG-4 compression technology to its customers on the eastern shore of Lake Huron. With a customer base of 15,000 the competitive telco may seem an unlikely candidate to be a leader in IPTV delivery, but rural areas provide an ideal environment for IPTV rollouts. "I really think we're the first people in Canada to officially offer MPEG-4 IPTV," says Hans Nilsson, president and CEO of BT. "We looked at about five years ago when MPEG-2 was around, and the technology wouldn't support it because it took too much bandwidth. So we put it on the backburner for a few years." By waiting for more capable compression technology, BT enabled itself to go to market with a full-scale video offering. The telco can deliver up to 25 Mbps of bandwidth to its customers in the south-western Ontario communities of Kincardine, Tiverton and Port Elgin over copper lines, and up to 100 Mbps over its newly-built fibre-to-the-home network in Southampton. Using Georgia-headquartered Conklin-Intracom's IPTV delivery solution, BT can deliver HDTV signals at 7 Mbps so its customers aren't limited to only one HD receiver per household as some early telco TV subscribers were. BT is also rolling out fibre to all new homes in its serving area, which is currently undergoing a construction boom due to new investments in the Bruce Nuclear Generating Station. Even with a population increase, BT's serving area is relatively small, which would make the IPTV rollout easier. It's one advantage small, independent telcos have over the large ILEC's like Bell Canada, which still hasn't rolled out an IPTV service. But there are more. "I think it's more of a question of the competitive factors that allow them to get into this market as opposed to being concerned about it being able to scale," says Jon Arnold, an IP communications consultant and principal of J. Arnold & Associates. "The more important issue is in hinterland places it's not economic to have cable the way we have here." Indeed, while Kincardine Cable TV provides digital and HDTV to Kincardine and Tiverton, Persona, the cable provider in Port Elgin and Southampton, offers about 50 analog channels. "There really isn't a Shaw or Rogers knocking down their door for TV, it's probably more likely they're getting from satellite," adds Arnold. Nilsson admits Bell ExpressVu has solid penetration in the area, but BT is offering a one-for-one swap of all ExpressVu receivers for new IPTV set-top boxes. And if some customers choose to maintain their satellite service it's not the end of the world; as the ExpressVu agent for its serving area, BT will still accrue some revenue from customers who don't make the swap. "Our packages are good enough that they'll move," adds Nilsson. "It's basically the same channel line-up."On the other side, Arnold says the independent cablecos are much less likely to get into voice services, but he adds, "there might be a sense of urgency to get into the video market because they can lock it up. It's easier for TV to add voice than the opposite." It's a prescient comment; Kincardine Cable TV notes on its website it will be offering home phone in a short amount of time. It's unlikely, however, BT's competitors can contend with its delivery system. Because its TV service is delivered over a broadband network, the in-home setup is completely wireless. Customers plug in one wireless modem that will deliver the signal to up to five TVs in a house. "One of my friends has a hot tub that he uses 12 months of the year and he says he'll take his TV outside now," says Nilsson. And the final advantage small telcos have when introducing IPTV is the close relationship they have with their customers. Nilsson says BT held three town hall meetings to inform customers of the new service. "At one of the town hall meetings," says Nilsson, "I looked down at a woman in the audience and I said ‘if you want your TV moved you don't have to call us anymore, you just say to your husband, ‘unplug those three units and plug them in over there,' and you're all set again.'" BT already has a backlog of more than 2,000 customers for its IPTV.

Rural telcos well situated to offer IPTV

Broadcast | January 9, 2008

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