Enriching TV experience

Growing demand for IPTV offers telcos potentially lucrative revenue streams.

Tags: Booz & CompanyEmirates Integrated Telecommunications Company IPTVMotorola Incorporation
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Enriching TV experience Farid Faraidooni: On-demand TV is changing consumer behaviour.
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By  Nithyasree Trivikram Published  December 21, 2010

Telecom operators that have advanced fixed infrastructure networks, such as fibre-to-the-home, are increasingly making use of the increased capacity to offer their customers value added services, and IPTV appears to be one of the main draws for customers.

Hadi Raad, principal of Booz & Company says that when it comes to television viewing, the traditional passive services are no longer enough for customers, who want greater control over what they watch. One of the reasons behind this trend is the acceleration of broadband deployments, especially in the Middle East region. “The critical mass of broadband users is building up, which has created an environment wherein operators need to proactively offer interactive services to customers. And one of these interactive services that run over broadband is IPTV,” he says.

Supporting Raad’s statement, Dr. Alper Turken, sales director, Middle East and Turkey, home business, Motorola Mobility, says that IPTV is reinventing the true TV viewing experience. “Viewers today are looking to access a broad mix of services such as free-to-air, subscription-based, and access to video content via other means such as on-demand and media broadcast through the internet,” he says.

While IPTV is already in the market on a commercial scale, with many operators in the region including Du, Etisalat and STC already launching it, Turken says that in general, it remains in the early stages of development. “Operators are seeing growth in the IPTV area and we will continue to see some extensions in the development of services such as the ‘Internet era of TV’. By bringing the content from the internet into the IPTV offerings, we are bringing the social TV dimension to it,” says Turken.

From an operator’s perspective, Du’s CCO, Farid Faraidooni, says that IPTV is either being deployed or examined by the majority of telecom operators in the MENA region. “People continue watching linear TV, but the introduction of on-demand offerings, possible over IPTV, is changing customer behaviour. Linear is slowly giving way to the emergence of on-demand content consumption,” he says. “By offering the latest IPTV services, we have revolutionised the TV viewing experience in the UAE with features including pausing, rewinding and recording live TV, and HDTV, and as the first in the region, we also began offering customers real Video on Demand (VoD) services almost a year ago,” he adds.

Convergence is key

Converged services are increasingly in demand among consumers who want the convenience of viewing programmes across multiple screens such as TV, mobile, laptop and tablet that can seamlessly integrate with each other.

Turken says that operators in the Middle East have reached a stage where they are looking to transform their services to a ‘converged experience’, with more end-user interaction, giving rise to the concept of the ‘social TV’. “There is a demand in the UAE market for social TV - to see social networking as a part of the TV viewing experience,” he says.

Raad says that one of the key strengths of telco operators is that they can deliver services across different platforms while fully controlling customer identity. The progressive growth of IPTV, especially in the region, is also fuelled by 3D and high definition (HD) television sets entering into this market.

“The Middle East will be the most advanced in IPTV in the next 5-10 years,” says Raad. He thinks that the Middle East has money to invest, and infrastructure implementations are continuing, with fibre being laid all over in the region. “Kuwait will be the first country to be completely on fibre. When that happens, the floodgates will be opened for IPTV in this region,” Raad says.

A Motorola Mobility 2010 Media Engagement Barometer states that viewers in the UAE are embracing social media as a way of enhancing the television viewing experience. It says that the UAE leads the pack in terms of mobile TV and video.

Mario Pino, director of business development and strategy, digital media services unit, Etisalat, says: “We are trying to provide multi-screen experience – across mobile, TV and laptops. Content on a screen is going to be important based on convergence across everything else. It’s not just about entertainment content on the screen, but it’s going to be the convergence of everything, wherein you can see the home as a digital home as well.”

TE Data’s managing director, Ahmed Ossama, says that content providers used to be very conservative when it came to bringing content online in this market. But in the past few years, the sector has seen a change, he says. “Operators are now probably realising that while mobile content is expensive, viewing of internet content on TV is proving to be more economical, and hence it is a good business model to tap this market potential.”

Broadband development

Though broadband is spreading rapidly in this region, Raad says that on average, the penetration level is still low as compared to global standards. But the pace at which the broadband penetration is increasing is quite phenomenal, standing at 20% on a yearly basis, in certain countries. “With the current 12-14 million broadband households in this region, the figure is expected to reach around 22 million by 2014, which will pave the way for IPTV growth here,” he says.

“What we are seeing is the community is much more progressive than the Western world for new and advanced services like video over mobile, integration of social networking into viewing experience. I think we are seeing a clear demand for recommendation based solutions, and it is necessary to bring in patterns on behaviour, usage and consumption into a unified experience that will be managed by the service providers,” Raad adds.

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