China Telecom. Road to IPTV success in Shanghai. Winners
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1 Winners China Telecom Road to IPTV success in Shanghai As of March 2011, China Telecom Shanghai had four million broadband subscribers, and a third of these had opted for the IPTV service. The operator s triple-play, any-screen service lineup already exceeds the offerings of the Internet content providers, and it appears that the best is yet to come. By Steven Hawley Editor: Ranajit S. Dam ranajit.dam@huawei.com 39
2 C hina Telecom Shanghai (Shanghai Telecom) is a subsidiary company of the China Telecom Group. China Telecom is the largest fixedline telecommunications and broadband service operator in the world. It has operated a 3G mobile service since 2008, and become the largest CDMA mobile network operator in the world. In Shanghai, the operator is currently building a high-performance Metro Optical Network (MONet), which includes its metropolitan area network (MAN), its core network, and optical Fiber-to-the-Building (FTTB) and Fiber-tothe-Home (FTTH) access. By the end of 2010, MONet s optical access network had already covered more than 1.5 million users. Shanghai Telecom s goal is to cover 3 million users by the end of Shanghai has the highest number of broadband Internet access and IPTV subscribers of all the cities in China, and the most IPTV subscribers of any city in the world. About one third of Shanghai Telecom s four million broadband subscribers take IPTV service, which reached 1.32 million subscribers as of March of Shanghai Telecom bundles IPTV, broadband Internet access and telephone services together into an offering called My E-Home. Shanghai Telecom s video services today The video operation center of Shanghai Telecom has two broad purposes. First, it provides a platform for content convergence, including content from leading commercial content suppliers, from TV stations, video content that is produced in-house, and content from consumers and to deliver this range of content and services to multiple screens over IP: to TVs, PCs, mobile devices, and other multimedia terminals. Second, it is a platform for service integration, including traditional TV, Internet video, mobile phone video, value-added consumer multimedia applications. The IPTV service is comprised of more than 100 channels of live standard-definition TV, and eleven HD channels, which are delivered to a standardized in-home set-top box. The HD channels went into service in March of A TV replay service allows subscribers to play any program up to 72 hours after it is broadcast, with trick play features that allow users to pause, fast-forward or rewind up to 60 minutes, at any time. Shanghai Telecom also has a large library of video-on-demand (VOD) with more than 13,000 hours of video, and audio content. Timeshifted TV and TV Replay are basic features of the 40
3 Winners The challenges led Shanghai Telecom to the decision to replace its initial IPTV delivery system. It also placed a high priority on VAS business models, QoS and QoE, and the balance between the level of investment and the end results. service, and are enjoyed by all subscribers. In addition to these traditional live TV and content-on-demand features, Shanghai Telecom also delivers more than 35 different value-added informational services to the TV. These services include a news center, financial information, educational content, health, weather, shopping and a TV magazine. In addition, there are nearly 30 different entertainment items, including karaoke and a range of TV-based casual games, including chess. Shanghai Telecom has defined four different types of TV terminal devices, including basic standard-definition set-tops, an HD set-top, and two different home media center devices that serve as gateways that consumers can use to access personal digital media content on the TV and on other screens. In addition to the TV, these screens include mobile devices, PCs and a fourth screen called the MPad. Shanghai Telecom s mobile video offering includes more than 35 channels of live TV programming, 16 channels of video replay content, and more than 70,000 on-demand video items. Content is also made available for download to the device. Content providers include Shanghai Media Group (SMG), CCTV, CNLive, CNR, WASU, CRI and Xinhua. Technical and business challenges Shanghai Telecom s IPTV service started strong in 2005, reaching 300,000 subscribers in the first two years. However, by 2007, the rate of subscriber growth began to fall short of expectations. Also, there were technical and business challenges in four different areas. The first problem area was the user experience. Network issues were causing IPTV channel change time to be as high as 2 seconds, which was not acceptable to consumers. Another area was customer premises equipment (CPE). During the early years, there was only one type of set-top box, which was expensive and was not meeting Shanghai Telecom s cost goals. The third problem area was the integration of the overall platform, which was difficult because each vendor had its own approach. Each of China Telecom s regional units would work with vendors of their own choice: different regions and telcos used different vendors. The fourth area was content delivery, because there was insufficient access network bandwidth even for standard-definition TV, let alone HD; or any ability to provide other multimedia content to consumers. These early challenges led Shanghai Telecom to the decision to replace its initial IPTV delivery system. In addition, Shanghai Telecom placed a high priority on having viable business models for value-added services, on improvements to quality of service (QoS) and quality of experience (QoE), to ensure that there is a balance between the level 41
4 of investment and the end results. IPTV 2.0 initiative To address the overall platform issues, in June of 2007, Shanghai Telecom partnered with Huawei and other technology vendors, to define Shanghai Telecom s IPTV 2.0 initiative, and announced in March of Shanghai Telecom set forth four key goals for the IPTV 2.0 specification: to provide a unified and standardized interface between IPTV set-top boxes and the IPTV platform; to provide a unified authentication system; to unify the service provider interface to services; to provide a unified approach to IPTV multicast delivery. The IPTV 2.0 specification was designed to create an open multi-vendor platform, upon which Shanghai Telecom could build its IPTV deployment, and then introduce additional valueadded services over short time. The resulting system uses a standardized architecture and open interfaces to address all four of the identified challenge areas. To address the quality of experience, Shanghai Telecom has worked closely with Huawei to achieve fast channel change and low-cost application-layer retransmission. Also, the bandwidth now available for standard-definition TV over copper has been increased from a level of 1.8Mbps in 2006 to 3.2Mbps today. This gives Shanghai Telecom an advantage over other broadband service providers, because the majority of broadband competitors have access speeds below 2Mbps. To address the content issues, Shanghai Telecom and Huawei have worked closely with major content suppliers. For example, officials of Shanghai Media Group (SMG), a provider of a wide range of programming that is carried by China Telecom s IPTV service, indicate that Huawei has been very helpful in facilitating faster access, through FTTB and FTTH access. In Shanghai, Guangdong province and elsewhere, access speeds are above 20Mbps, which makes it easy for BesTV to offer HD programming and a high-resolution user interface in those regions. Currently, Shanghai Telecom can use set-top boxes from six different suppliers. In Shanghai, the IPTV 2.0 specification allowed the service provider to use any generic set-top box that complied with the standard. Before the IPTV 2.0 specification was put in place, Shanghai Telecom could use only set-top boxes from certain vendors. The IPTV 2.0 standard has also helped to reduce the cost of settop boxes significantly. The IPTV 2.0 platform has also enabled Shanghai Telecom to deploy multi-screen TV, which is a service concept that allows the same household to consume video services on different screens. This has become not only a competitive differentiator for Shanghai Telecom but is also a competitive imperative because of the changing demographics in Shanghai. Now, Shanghai Telecom has gone far beyond offering basic TV and EPG services, via a basic set- 42
5 Winners The IPTV 2.0 initiative quickly yielded signifi cant results. From December 2007 to December 2008, 08, the number of IPTV subscribers increased from 227,000 to 745,000, a growth of more than 500,000 subscribers in just its fi rst year. top box. Cloud-based delivery is being put in place to serve a range of interactive value-added services to intelligent multimedia consumer devices that include not just TVs and PCs, but also, mobile devices and a specialized in-home multimedia terminal called the MPad. The IPTV 2.0 initiative quickly yielded significant results. During the 12 month period from December 2007 through December 2008, the number of IPTV subscribers increased from 227,000 to 745,000, a growth of more than 500,000 subscribers in just its first year. Emerging trends and future demands To help overcome potential challenges relating to multi-screen delivery, one of Shanghai Telecom s focus areas will be to increase the efficiency of content delivery over CDN. Huawei offers advanced cloud-based solutions, which will help improve the efficiency of Shanghai Telecom IPTV services that are based on storage. This will enable Shanghai Telecom to put more of the intelligence in the network cloud, and deliver the right format of video to each type of consumer device. Shanghai Telecom s standard-based service delivery and management platform is open, and is designed for convergence. Its unified content management system ensures that the right content is delivered to the right device, with high quality (QoS, QoE). The CDN has open interfaces for commercial and individual providers that contribute commercial or personal content. There are also standardized portal interfaces for the web, for WAP, for client portals and for TV EPGs. Going beyond multi-screen services, Shanghai Telecom sees some additional trends in several key areas: Anywhere-anytime delivery: including the demand for video by mobile users on an intermittent basis; Increased interactivity: including the efficient delivery of live TV and VOD content, while the demand for web browsing, online games and education, and social interaction is on the increase; A continuing quest for high quality: including increased demand and availability for HD content, 3D video, high fidelity audio and console games; Personalization: including user-generated content and the use of search, ratings by subscribers, blogging, commenting, and group collaboration. New service features include interactive overlays on top of video, multi-screen services, media sharing, and interactive media. Shanghai Telecom is also beginning to talk with social media companies in China to add social features to its TV offering. A 3D IPTV demonstration has been 43
6 Huawei s primary contribution to our IPTV is the IPTV 2.0 Standard system commercially used in Shanghai. We have had a very good partnership in the design and deployment ent of these systems. under development in Shanghai Telecom s labs, and is ready for demonstration. Huawei as a strategic partner Because of its active participation in these areas, Huawei soon earned a leadership role in the Shanghai Telecom IPTV 2.0 initiative. This success led Shanghai Telecom to ask Huawei to deploy in the main districts of Shanghai, including Pudong, Nanhui and Baoshan. Although Huawei was late to join the project, the improvements came quickly. Beginning in 2008, Huawei was given a strategic role for several key areas at Shanghai Telecom, on an ongoing basis, and has been given exclusive responsibility for Shanghai Telecom s unified video platform, with a focus on ease-of-integration and value-added applications. In addition, Huawei has exclusive responsibility for Shanghai Telecom s triple-play strategy and triple-play interactive services. Huawei had an exclusive partnership with Shanghai Telecom at the Shanghai Expo 2010 event, to offer a high-definition Blu-ray quality business video experience. Shanghai Telecom has a very good relationship with Huawei, both as a manufacturer and a service provider not only for IPTV but also in many other telecom equipment areas, said Dr. Xiao Qing, Senior Technical Director of Shanghai Telecom. Shanghai Telecom has adopted many Huawei devices, but for IPTV, we think that Huawei s primary contribution is the IPTV 2.0 Standard system commercially used in Shanghai. We have had a very good partnership in the design and deployment of these systems. Huawei has given us very good advice on new services based on IPTV. Huawei also gave us the first ideas for the HD settop box we use today. Not only does it support traditional IPTV services, but it also provides local video play-back, as well as game console functionality. Now, this kind of STB has become a standard of China Telecom, she said. Because of its role in Shanghai Telecom s IPTV 2.0 initiatives, Huawei has helped this service provider implement a true anytime-anywhere multimedia communications service platform, with a competitive, high-quality TV offering and a wide range of value-added features that are ready to deliver in a device-appropriate manner to any screen. Although consumers may not think of the telephone company in the same sentence as Apple itunes, companies like Apple don t offer live TV, broadband Internet access, nor can they offer traditional fixed-line or mobile telephone services. In the end analysis, Shanghai Telecom s tripleplay, any-screen service lineup already exceeds the offerings of the Internet content providers, and it appears that the best is yet to come. 44
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