The Opportunity for White-labeled IPTV & OTT TV for MNOs, MSOs and ISPs. Date: 19 January 2014
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1 The Opportunity for White-labeled IPTV & OTT TV for MNOs, MSOs and ISPs Date: 19 January
2 Leader in Technology and Competition 7M population, multi-lingual, mainly Chinese speaking 3.8 million Telephone Lines 102% HH penetration 4 Pay-TV Operators, 5 Fixed Operators, 5 Mobile Operators Highly developed broadband market with more than 1.6m accounts about >85% household penetration Mobile penetration over >200% with 5 (4) LTE Networks Over 76% Pay-TV household penetration World s Highest IPTV Penetration Rate > 50% of Households The laboratory to understand future TMT evolution * 2008: Hong Kong = 53.0; UK = 48.5; Japan = 44.5; USA = Sources: OFTA, MPA, Informa
3 About HKT and PCCW Merged with Cable & Wireless HKT in August 2000 to form PCCW PCCW is a Hong Kong-based company which holds interests in telecommunications, media, IT solutions, property development, investment, and other businesses. In Nov 2011, HKT the parent entity of PCCW Global, was spun off from PCCW Group and separately listed as a Trust on the main board of The Stock Exchange of Hong Kong Limited. HKT has more than 14,900 employees worldwide Both PCCW (0008) and the HKT Trust (6823) are publicly listed on the HKSE China Unicom 2nd largest shareholder Since IPO spin-off, HKT unit price has risen by more than 60% According to HSBC HKT has provided the highest dividend yield in % terms when comparing to any Asia-based telco On 20 December 2013, HKT announced the intended acquisition of CSL 2
4 PCCW s Quadruple Play Strategy has made us Market Leader in Fixed, Broadband and Pay-TV in HK Number 1 Broadband Fastest Growing Mobile Biggest Broadband Provider with over 60% market share driven by quality, VAS and service bundling with PayTV/Fixed-line/Mobile Unrivaled coverage with over 95% Broadband Mobile Acquisition of SUNDAY in 2005 with aggressive growth in new subscribers Data revenues surging, highest mobile data usage and strongest TV/music content homes passed Number 1 Fixed-line Number 1 Pay TV Biggest Fixed Line Operator with stable market share over 68% Success story of reversing fixed-line loss since 2H 2005 Fixed-line IPTV Took leadership of Pay TV market (>50%) in less than 4 years since launch with strong customer & ARPU growth through our IPTV system & content strategy World Leading IPTV Operator 3 3
5 .The Keystone of a wider Telco - Media Transformation Strategy for Content, Applications and Transactions 2.6M Fixed Lines (Biz & Res) 1.56M Broadband Lines Over 48% + of PayTV Subscribers Sweet Spot 1.65M Mobile Subscribers 4 4
6 Ubiquitous Broadband Strategy Enabling PCCW s quad play of media and other services on multiple devices, which roam seamlessly over broadband, mobile, and WiFi Access NGN IP Core education Content, Content Applications & Transactional Transactional Services Services Broadband City wide coverage 5 Fiber Direct Netvigator everywhere Home wireless 3G/ 42Mbps HSPA+ 4G LTE Valuable content and transaction revenue growth via multiple access technologies for a number of customer situations, devices and 5 experiences, fixed, wireless and mobile
7 Global Ethernet and IP Network Total Global Capacity More than 2,000 Gbps with 81 PoPs across 30 countries and 50 cities 6
8 Data Product Roadmap Mobile Roaming Solutions over IPX Unified Communications Solutions Media Solutions Cloud Solutions Optimizer, Network Security HPBX HDVC CDN IPX Platform Cloud Fiber Network IP Backbone Satellite Network 7
9 IP Video trends Multiscreen services have seen amazing growth over the past year in Europe and Asia. Motivated by consumer consumption trends and competitive forces, pay-tv providers are positioning themselves to be players. in video services on any screen Internet video traffic will surpass 50% total bandwidth in 2016 (source: Park Associates) Mobile devices are on important part of the TV experience 67% use tablets, smartphones or laptops in their everyday TV viewing TV anytime and anywhere is finally a mass market service 60% of consumers watch video on-demand on a weekly basis. (source: TV and Video, An Ericsson Consumer Insight Summary Report, August 2012) OTT video viewing will reach 380 million users by 2015 (source: Informa Telecoms & Media) 8
10 IP Video trends OTT TV will be worth over US$37 billion in 2017 (source: Informa Telecoms & Media) TV Everywhere in 2012 London Olympics: Comcast had more than 219 million unique viewers in US tuned in across all screens BBC had more than 12 million requests for video on mobile across the whole of the Games 9
11 IPTV vs OTT TV Both IPTV & OTT TV are IP video IPTV OTT TV Advantage of IPTV: over Telco s managed network, quality is assured Over open Internet, use technologies like adaptive bit rate & CDN to ensure good user experience Reach Telco s subscribers only (connected to Telco s managed network) Advantage of OTT TV: reach much bigger user base as long as the users can access Internet User devices are mainly STB + TV User devices can be smartphone, tablet, PC, STB + TV, smart TV, game console IPTV & OTT TV are complementary to each other for Telco 10
12 Overview of OTT TV solution Storage Encoding, transcoding Adaptive Bit Rate (ABR) Digital Right Management (DRM) Content Management System (CMS) Recommendation Engine Billing Store front Value Added Services (VAS) CDN central IP Video Platform Content Delivery Network (CDN) Network connectivity CDN (local) CDN (local) CDN (overseas) Multi-screens Set Top Box (STB) Client software/ Apps Web plug-in 11
13 Key enabling technologies Content delivery network (CDN) CDN uses multiple servers in many geographic locations so as to improve the delivery of web pages and streaming content Global content requests will be routed to the closest servers i.e. to bring online content closer to the users CDN can offer better quality of service over public Internet, and to reduce the bandwidth costs Techniques usually used by CDN include caching (storing the popular content closer to the users) and traffic switching (directing traffic to the best available servers, over the best route) Cloud-based CDN Deploy cloud technology to achieve more effective cost / performance Data for CDN services are stored in multiple cloud storages Cloud storages from virtualized pools of storage Contents are partially cached to CDN edge when accessedhttp-based adaptive streaming technologies Content is divided into chunks e.g. 5 to 10 sec Consists of media files & manifest files which identify alternative streams and their URLs Switching logic is on player, the player will monitor the buffer status or CPU utilization and request the appropriate streams Benefits Adaptive bit rate Firewall friendly Can leverage HTTP caching mechanism No streaming server is required, 12
14 New technologies are emerging MPEG DASH (Dynamic Adaptive Streaming over HTTP) A new ISO standard of adaptive streaming technology It is codec independent, can work H.264, WebM etc It supports features like seeking, fast forward and rewind, and advertisement insertion Key benefit: a single standard that enables producers to encode once and then distribute to a universe of players HEVC / H.265 A new codec technology, jointly developed by ISO/IEC Moving Picture Expert Group and ITU-T Video Coding Expert Group Goal is to achieve 50% better compression efficiency as compared to H.264 To support solution up to 8192 x K video 4K Ultra HD monitor: 3840 x 2160 (aspect ratio of 16:9) DCI (Digital Cinema Initiatives) version: 4096 x 2160 (aspect ratio of 17:9) About 4 times of resolution of 1080p And, many more new technologies are emerging rapidly 13
15 Virtual CDN? Cloud-based CDN Adopt cloud technology to achieve higher cost effectiveness & flexibility Data for CDN are stored using multiple cloud storages Contents are partially cached to CDN edge when accessed Global controller & balancer Content origin Regional controller Regional controller Regional controller Regional controller Regional controller 14
16 White labeled IPTV & OTT TV services Why White Labeled service? Quick time to market Low risk: pay as your grow Scalable Global reach Future proof: evolves with industry & supports new features & add-ons CDN central IP Video Platform PCCW Global s White Labeled end to end IPTV & OTT TV services 24x7 monitoring & support Managed Network CDN (local) CDN (local) CDN (overseas) Internet Multi-screens 15
17 PCCW s experience in IPTV & OTT TV business PCCW provides quadruple experience: Fixed, Broadband, Mobile & IPTV business One of the largest customer bases in IPTV service in Asia with more than one million subscribers World s highest IPTV penetration rate > 50% of households PCCW has been operating IPTV services for more than 10 years and has launched OTT TV services PCCW has also launched many interactive and transaction services on the IPTV & OTT platform Quiz & Polling Video on Demand Online shopping Cinema ticketing Interactive Advertising 16
18 Partnership 17
19 Thank you! 18
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