Differentiating with IPTV

Operators are embracing the IPTV business to offer a differentiated service
Consumer viewing habits are changing and the expectations are higher.
Consumer viewing habits are changing and the expectations are higher.

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Consumer television viewing habits are changing rapidly, and viewers expectations have also grown. Many operators have realised the opportunity that TV services represent, and have chosen to invest in IPTV in order to capitalise on changing demands from customers.

IPTV is a key differentiator that operators in the region are using to attract and retain customers by offering a video solution that offers total control of video consumption such as multiscreen service, recording, and viewing on multiple platforms, at home or elsewhere.

Georges Dabaghi head of TV and Media, Ericsson Region Middle East believes that IPTV can provide good customer insight, giving an operator an exact understanding of customer content genre choice, the habits of watching content, price elasticity and seasonal effects, which can be used to improve service.

However, not all operators in the region have made this investment. “IPTV demands that operators invest in their network, to enable end-to-end multicast delivery of linear channels, and to enable Quality of Service,” said Fady Younes, head of Service Providers at Cisco UAE.

“Service Providers in the region need to plan properly on upgrading their network infrastructure to provide IPTV, with the same or better quality of experience, with far greater interactivity,” Younes added.

In order to offer IPTV, operators need to have different enablers to guarantee that the investment will be profitable in the future. Dabaghi considers that operators need a uniform broadband reach across all their territories. “A second component to take into consideration is the complexity of the ecosystem needed for IPTV, comprising compression head-ends for live linear content, the VOD solution offering stored content streaming, encryption, and support of client on receiving devices. A third component is the content itself, and that is precisely what drives consumption and decide profitability for the operator and can make or break the business case for content. Scale is important here and to reach critical mass takes time and requires investments,” he continued.

Mohamed El Ebiary, Video Business Development director, Meta at Alcatel-Lucent, says that the growth of IP video service in the Middle East and Africa is buildig up: “Some operators have been leading this domain specifically because they are in countries that have good broadband access with high penetration rate. New video technology has increased this reach.”

In the Middle East, IPTV is already strong in the UAE (406,000 subscribers), Saudi Arabia (158,000), and Qatar (97,000), which have the three highest absolute number of IPTV subscribers, respectively, in the Middle East, according to Younes.

“By penetration rate, IPTV is highest in the UAE and Qatar, respectively, with the common denominator of the two countries being that they both have strong infrastructure. As network infrastructure grows in a country, so does the need for high quality video services,” he added.

El Ebiary added that the investment in broadband and the introduction of LTE in the Middle East and Africa will lead the interest in video service. “The service providers in the region recognise the need to be part of the video delivery chain. Some are more advanced in their plans than others.”

Samer Geissah, vice president, Consumer Home and Multimedia Services at du, said that the next few years are going to be interesting as more IPTV services will be deployed in the region. “Content rights will see liberalisation and consolidation is expected in OTT services. With the spread of 4K and now higher TV formats, IPTV services are going to be even more exciting for our customers,” he added.

Amjad Esam Shacker, corporate communication general manager at STC, said that the trend is changing as telecom operators are now investing in Fibre to the Home (FTTH) in the region. “The market will most probably witness increased competition down the road.”

“During the year 2014, Pay TV penetration has increased in Saudi to 28% and a similar trend has been observed in the GCC region. We foresee continued positive growth in the industry together with increased competition in the near future which is obviously a plus for customers. We remain committed to providing quality entertainment services to our customers incorporating the latest trends in the market,” Shacker commented.

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