Du it right

Telcos are making their services more compelling to consumers with IPTV and triple play offerings. Farid Faraidooni, chief commercial officer unveils du’s plans for interactive TV and multi-media streaming in an interview with Supriya Srinivas

Touted as the secret weapon to reduce churn, it was no surprise that Farid Faraidooni, chief commercial officer was not lost for words when we asked him to spell out for us the IPTV offering from du and the plans to grow in the sector.

“IPTV,” Faraidooni says, “has been evolving quite rapidly. “Initially, we had a simple platform that was broadcasting a few channels. We are now at a stage where the platform is rich in terms of features and capabilities. We currently broadcast more than 300 channels. Many are free-to-air as part of the basic subscription. Over and above that, we have bouquets from  OSN, Pehla, ART and so on.”

du’s video-on-demand (VOD) service, launched in 2009, is managed in partnership with the London-based On Demand Group (ODG), a major VOD and three-screen video enabler for premier content. The telco also recently concluded a deal through ODG with Al Arabiya Cinema Production & Distribution to provide Arabic movies. Besides that, du has direct partnerships with several content providers such as Bloomberg, Turner and so on but the majority of channels come from major distributors.

“We have more than 2,000 titles ranging from Hollywood, Bollywood and Arabic sources in different genres, within our subscription-based video library that can be activated with a touch of a button. We have enhanced the user-interface with our dynamic electronic programme guide (EPG) that has improved display and browsing options. Moreover, you can record, rewind or pause live programmes,” adds Faraidooni.

These upgrades and enhancements do not come cheap, and telcos with their deep pockets seem ideally placed to make IPTV a reality. According to figures from the Multimedia

Research Group, the number of global IPTV subscribers will grow from 54 million at the end of 2011 to 113 million in 2015, a compound annual growth rate of 20.3%. As for revenues, the global IPTV market is $22.4 billion in 2011 and is expected to grow to $49 billion in 2015, a compound annual growth rate of 21.7%.

Embedded social media

Partnering with both Microsoft and Alcatel and poised to thrust the IPTV offering to the next level, du’s plans for the coming months and year are groundbreaking for this region, says Faraidooni. “While we are introducing the Arabic language to our EPG, we will also be embedding social media platforms such as Facebook and Twitter in our IPTV offering.

The onscreen integration of social media will allowthe viewer an enhanced level of interactivity. In addition, the new upgraded platform will allow third parties to develop applications. We are also introducing ‘Catchup’ TV. The viewer does not have to worry about missing out on programmes. We record them without the viewer asking for it and for a period of time, the programme will be available at the click of the button.”

Three-screen strategy

Going by strategic moves and partnerships that du has forged in recent years, it is evident that the Dubai-based telco is making an effort to think beyond flow, bandwidth, and bits and bytes to strategising like a broadcaster – a prerequisite for success with IPTV for any telecom operator. Du is now poised to embrace the next logical disruption that is multiplatform viewing. With an investment of more than US $8million in the current phase of upgrades, Faraidooni gives us an insight into the upgrades in the pipeline.

“We are already working towards the next upgrade which is the three-screen strategy that will allow a viewer to seamlessly watch programmes of his or her choice on television and any device such as the iPad, the tablet desktop and so on. Moreover, your mobile can operate as a super-remote allowing you to record programmes remotely and other similar operations. We are introducing these improvements in stages so that customers have time to get used to it and the new service becomes part of the viewing experience.”

Some experts believe that telcos have missed out on their window of opportunity with plenty of competing content on free-to-air satellite TV and viewers watching their preferred programmes on the internet. Faraidooni disagrees. He claims that the IPTV juggernaut from a few channels to interactivity and multi-media streaming, while inevitable, also needed to be timed perfectly.

“We are serious about IPTV. If we don’t develop the platform, we lose out on our return on investment. We did not embark on IPTV to broadcast a few channels. You have to bring in the interactivity element – the ‘anytime, anywhere’ TV. It is an expensive platform to build and maintain. At the same time, we believe TV has to be treated with the utmost care. While you are willing to wait for a website to download, you want a perfect TV experience. What gives us cause for optimism is the penetration ratio of our IPTV offering that is higher than comparable markets even in Europe. I believe the convenience factor and the catalogue on offer are the reasons viewers are drawn to our IPTV offering. Even now, cost wise, most of our titles are within the range of US$ 2 to 4. This is inexpensive compared to watching a movie in a cinema hall with your family. With economies of scale, in the future, we expect costs to come down even further.”

Overcoming bandwidth issues

With the proverbial foot in the door, telcos such as du are ideally placed to reap revenues from IPTV. However Faraidooni concedes that they have competition. “We are competing with satellite TV in areas where viewers can install satellite dishes. However, when you consider that we are offering the OSN package at the same price as satellite providers without the hassle of extra equipment and wiring, we do have an edge. We are also competing with the internet. More and more people watch their preferred shows on the internet. It will take time for multiplatform viewing habits to develop among consumers.”

As du moves towards multi-media streaming, the big challenge is bandwidth or the lack of it. If IPTV is to become a viable household solution and if du wants to be successful, over-the-top (OTT) video content that allows for real-time streaming on multiple devices and bandwidth issues will need to be tackled. Whether it will be as good as TV quality is a question to be reckoned with. “There are two ways of looking at it,” says Faraidooni. “The bandwidth capability of the next generation of networks is increasing three to four times in the coming months. For instance, when we first upgraded our network to HSPA+ in March 2011, we took the bandwidth speeds from 14.4Mbps to 42Mbps. As we speak, du is geared to roll out the next level which will take speeds to 100 Mbps. This next upgrade should be a launched in the first quarter of 2012. At Gulfcomms 2011, we showcased the upgrade beyond this that will take speeds to 150Mbps. As you can see, bandwidth is catching up very fast. We are the first in the region to introduce the LTE 1800MHz mobile spectrum. Our partners in this project are Huawei, Nokia Siemens Networks and Cisco.

“The second aspect relates to upgrades taking place at the backend. To ensure that the access to TV through various mobile devices will not affect quality of viewing, the backend is designed more intelligently. We have technology that will recognise that content is being watched on an iphone, so the content gets formatted dynamically to adjust to the screen and bandwidth of the device without the customer realising it.”

Unique market dynamics of the region

IPTV is touted as being transformative for telcos. Global IPTV subscriptions are slated to top 65 million by 2012, a staggering leap from the 13 million households worldwide that currently are receiving broadcast via the internet, says a new report from IMS Research. Underlying the varying levels of development of IPTV globally and the challenges of servicing an emerging market, Faraidooni says: “These figures are largely relevant for North America, Europe and parts of Far-East Asia. While IPTV may not be one of the most profitable products for a telco in an emerging market, it is important for us to offer the service as part of the overall experience for the viewer. Customers may never opt for IPTV in isolation but it makes our bouquet of services more compelling. In this part of the world, viewers are accustomed to free-to- air channels. “The market dynamics are different and these growth figures do not apply here.

People are not used to OTT or cable, so we will have to wait and see how subscription for the service grows.” Telcos such as du have apparently won the most crucial battle, which is gaining the single entry point into homes. While Faraidooni believes that the capability to offer bundled solutions to their subscribers is a plus, there are challenges. “We are currently limited to certain locations. We need to go out and make our services available across the nation.

That is the biggest challenge. Regulation is not stopping us, but the extent of our physical network is. With the Telecommunications Regulatory Authority (TRA) having given telcos the go-ahead to share infrastructure, we will be in a position to offer our broadband services on top of Etisalat’s infrastructure. The initial offer will not cover IPTV but will cover broadband and landline services.”

It seems like another era when telcos were known only as phone companies. Now, they are firmly in the driver’s seat as they engage with the consumer with IPTV in addition to their “triple play” of voice, data, and video. What’s crucial now is for telcos and broadcasters to engage more closely together so that they can exploit the potential of technology and bring a whole new dimension to the viewer’s experience.