System.NullReferenceException: Object reference not set to an instance of an object. at DotNetNuke.Framework.DefaultPage.OnLoad(EventArgs e) in e:\websites\\public_html\Default.aspx.cs:line 791 FTTH network positions Verizon to climb to No. 1 IPTV provider, says MRG | TvTechnology

FTTH network positions Verizon to climb to No. 1 IPTV provider, says MRG

December 11, 2007

Multimedia Research Group’s (MRG) latest biannual global IPTV forecast revised upward its projection of the number of IPTV subscribers worldwide from 63.6 million in 2011 to 72.6 million because of growing optimism about success in China, India and Korea.

Closer to home, MRG has identified faster growth for Verizon and AT&T than previously forecasted and predicts Verizon will become the world’s largest IPTV service provider in 2011.

IPTV Update caught up with MRG president and founder Gary Schultz to discuss its latest forecast and some of the factors that went into reaching its conclusions.

IPTV Update: While Europe leads the pack in IPTV subscribers with Asia and the rest of the world moving up fast, MRG identifies Verizon in North America as being the world’s largest IPTV service provider in 2011. Why and what do you forecast for the number of FiOS TV subscribers by then?

Gary Schultz: Because they have made a commitment to fiber to the home. That in and of itself seems to be quite powerful as a platform for launching services. So we think that is going to be a very competitive offering.

They have a combination of RF and IP network right now — RF for all of the broadcast content and IP for the on-demand stuff. They have indicated they will go completely IP by 2010. Now, we’ll see if that happens, but my guess is that there’s going to be some real improvements, even in two-way services when they do that. They really have a commitment to be fiber to the home and to be 100Mb/s or whatever it happens to be, so I think because it’s a two-way network, it will deliver better quality than just an RF environment due to all of the QoS tools that come with the platform.

So we think they will have a competitive edge as time goes on. We don’t think the growth rate will continue on at a robust rate, although it will flatten a little.

As far as the number of subscribers in 2011, Verizon will have somewhere north of 5 million by then.

IPTV Update: What is MRG forecasting for IPTV subscribers in Europe, North America and Asia by 2011?

Gary Schultz: In Europe, we are looking at a little over 30 million, in Asia about 27.8 million and in North America about 11.7 million.

IPTV Update: MRG finds MPEG-4/AVC replacing MPEG-2 in new installations. Will the higher compression rates supported by AVC be enough to relieve the last-mile problems some operators are having, or will it only be a stopgap until FTTH can be deployed?

Gary Schultz: I think it really depends on who the operator is and how far they are trying to push things. There are ways of shortening the loop from the central office by installing other devices along the way. It’s going to cost more.

Is it necessary to have fiber to the home? I think in a smaller market, copper wire will work out OK. Yet, I wouldn't be surprised to see AT&T do a hybrid situation with Dish with a really robust DSL two-way network in combo.

That’s just supposition, but on the other hand, DSL will continue to improve, so maybe you can get 50Mbits to the average home in five years. So we expect there will be an upward curve for bandwidth and also a downward curve for AVC requirements for standard-definition and high-definition video transmission.

So the jury is out. I don't think you can say one way or another, but service providers really have to be clever with their network and bandwidth allocation. If you are a service operator and you are handling a lot of HD on that network, you better be using all of the tools available to you to be sure you are allocating that bandwidth properly, particularly as high-def becomes more prominent.

IPTV Update: Do you have a forecast for FTTH deployment numbers in North America by 2011? How about worldwide?

Gary Schultz: We are not forecasting exact numbers of fiber to the home, but if you look at Verizon's numbers, obviously that's going to be close to 100 percent. Green field developments like those in Sacramento, CA, are an example — where you see large developments being equipped with FTTH. You will also see more MDUs coming online with fiber to the building to make it possible to have higher bit rates right to the apartments or residences. AT&T also is working on an MDU program, and there are other operators doing the same. So you will see more fiber used in upscale high-rise residentials.

IPTV Update: Did you encounter any surprises in putting together the most recent bi-annual IPTV forecast? If so, what?

Gary Schultz: I think one of the surprises is Verizon is back on the upswing as fast as it was. I think that was probably the biggest surprise. No other big surprises. Europe and Asia continue to be very robust. Whether Asia will pass up Europe before 2011 as we predict still might happen, but you have to count things as they happen and not worry so much two to three years out.

IPTV Update: What is accounting for that surprising growth at Verizon? Is it what some commentators have said is an increase in resources devoted to marketing now that infrastructure is in place, the success Verizon is having in winning franchises approvals, all of the above or some other factor?

Gary Schultz: I think also they are able to negotiate better than their competitors expected they would be able to with the content companies. We probed them three years ago about that, asking them who they have onboard and who really understands content acquisition. Not just in linear content, but also on interactive content. They were already gearing up for this two to three years ago. They were getting some top people into the fold. So even at that time, we knew they would have the capability. We didn’t know for sure that they would have the will, especially given what happened in the mid-‘90s when Bell Atlantic swung and missed big time on content acquisition and content development.

You could argue that they would never want to get that lost in an area where they had no experience, but this time they went out and got some really great people. They hired some good people away from cable — a lot of good acquisition people and content people. So that told us they were serious and that they were going to be able to get their hands on reasonably good content and reasonably good services, and I think that has come to pass.

Another thing worth mentioning about their services is they were talking the convergence game a year and half to two years ago already. Again, a lot of us were very skeptical about where V CAST was going to work and would they be able to use video content on multiple platforms. And I think that is starting to come to pass also with their handheld SmartPhones and so forth. I think what they are offering is unique in itself and has a fresh look and an easy interface and good quality. So it’s not being perceived as another half-hearted effort at playing like a cable company. Their focus is really on differentiating themselves. Multiplatform distribution is an area where they are already proving themselves and they are putting big resources into that.

They seem to understand the problem and to allocate resources to the real technical challenges of multiplatform distribution, and I think that is starting to show in their numbers. Another example of their technical commitment is when, effectively, they took over middleware development from Microsoft and have rewritten and tested virtually all of the middleware except for some EPG code left over from Microsoft. The true test is that this new (home-grown) middleware can scale as well and as fast as it has. So, people don't doubt Verizon's software expertise anymore either.

In addition, they have not reneged on the infrastructure build-out as well. They have persisted in doing their build-outs on a community-by-community and township-by-township basis, but are also doing it at the state level where possible, which has smoothed the path for them.

Tell Us What You Think!
IPTVU invites response from our readers. Please submit your comments to We'll follow up with your comments in an upcoming issue.

Receive regular news and technology updates.
Sign up for our free newsletter here.