Future of Bell’s IPTV offering unclear

Bell Canada's announcement last month to deploy fibre to the neighbourhood (FTTN) in new suburban multiple dwelling units has raised questions about the future of the telecom giant's Internet TV service. Touted as the next-generation in TV viewing by former president and CEO Michael Sabia nearly two years ago, Bell's IPTV offering now appears sidelined and its future uncertain.Mark Tauschek, senior research analyst at Info-Tech research Group, doubts the service will be shelved, but acknowledges the service isn't front and centre for top brass or the company's new owners. "I don't think they've completely mothballed it here," he tells Canadian Communications Reports. "But, I don't think they'll have the infrastructure in place to roll it out with any significance any time soon."Reached for comment, Bell spokesperson Mark Langton was non-committal on the company's IPTV strategy. He said the company's new policies stipulate no product announcements will be made until they're ready for launch."We are keeping quiet on products, not just IPTV, but any product that's in development for competitive reasons, but also because we don't want to over-promise too much in advance," says Langton."We are committed to IPTV, but we are not talking about product roll-out schedules. It's a little too early to talk."Bell has detailed a hybrid approach that involves a mix of fibre to the node and fibre to the premise deployments. The company's latest FTTN announcement seems to support that strategy, indicating that more than 2.4 million households will find themselves within one kilometre of the fibre network by the end of this year, while new MDUs in new suburban communities will get direct access to fibre.This appears to mark a step back, according to Tauschek, but seems logical given the company's current privatization process. "First of all, they're making a real effort to be very conservative about capital expenditures , so they don't want to spend several billions of dollars bringing fibre to the home," he explains. So while Bell continues to invest in IPTV technology, it has to be cautious about spending too much money.The other element at play, according to Tauschek, is the cost to switch existing customers from ExpressVu to an IPTV platform: from $500 to $800 per customer.Canadian telcos have traditionally taken a conservative approach to deploying fibre to enable IPTV services, and they are making headway. SaskTel and MTS Allstream are the most well-established telcos offering TV, while Telus Corp. has deployed its IPTV in certain cities in Alberta and British Columbia. In the US, Tauscheck says Verizon is spending US$7 billion in the short term to bring fibre to the home (FTTH).Canadian telcos know they have to get into the TV distribution arena or risk losing the "home" to the cablecos. While FTTH may be inevitable over the longer term, telcos are focusing for now on reaching the neighbourhood, notes Tauscheck. "We have to do this or the cable companies are going to eat our lunch," he says of the telcos' thinking, "because they can do voice, they can do data and they can do TV obviously, and they can do voice at least as good as us."It's debatable whether Bell, or other telcos for that matter, can remain competitive with a strategy that brings fibre to the neighbourhood rather than right to the home. The country's largest telco is in a difficult position because of its privatization, but it continues to invest in technology, and last week inked an agreement with Nortel Networks Corp. to deploy its 40G system, a network investment that will speed its backbone by four times current speeds.

Future of Bell’s IPTV offering unclear

Broadcast | September 8, 2008

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