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TalkTalk gets serious about pay TV with YouView in UK

UK Internet Service Provider TalkTalk has followed incumbent Telco BT in launching a TV service based on the country’s recently launched YouView hybrid TV platform, combining Free To Air digital terrestrial channels with broadband video content.

Like BT’s, the service is delivered via a YouView set top box made by Huawei, for connection to DTT via an aerial, and to the Internet. Also like BT, the service is bundled with premium broadband subscriptions for a one-off installation fee of £50 ($80), although slightly cheaper at £24 per month including the cost of renting a line. Although the basic package, including BBC channels, delivered over DTT is free, there is the option to subscribe to premium sports and movie channels from BSkyB. These are accessed over the broadband connection. The Internet will also deliver OTT and catch up services such as BBC iPlayer.

TalkTalk is hoping that the revamped service based on YouView will finally turn it into a serious pay TV player, having been around in various guises for 12 years but never attaining more than about 40,000 subscribers. The UK leader is satellite operator BSkyB with just over 10 million TV subscribers, followed by MSO Virgin Media with 3.7 million, and then BT Vision with its existing hybrid IPTV/DTT service trailing in third at around 750,000.

But, TalkTalk has a base of 4 million broadband subscribers to attack with its new service aligned with YouView, and has a good range of content including access to Sky’s premium material, as well as all the country’s favorite terrestrial channels. Additionally, it also now has a growing amount of OTT material, with a year’s subscription to Amazon’s Love Films bundled in free. The aim is to build a customer base as cheaply as possible by virtually giving the service away and then upselling other services. Although, meanwhile, TalkTalk hopes that some will take the Sky premium content, which is available without a separate contract on a monthly basis.

TalkTalk believes that Quality of Experience (QoE) will be the key to success and has invested heavily in QA (Quality Assurance) monitoring, going to Swedish-based QA vendor Agama Technologies for content-level probes designed to identify errors at the headend before they enter the transmission chain.

This solution also verifies the content as it leaves the headend, checking for those familiar problems for IP video such as macro blocking, when part of the screen is filled with identical pixels, as well as complete black screens, temporary loss of sound and frozen frames.

At the same time, TalkTalk has undertaken extensive testing of different transcoding platforms to find the one that delivers the best picture quality in limited bandwidth, although the successful supplier has yet to be identified. Even so, not all of TalkTalk’s broadband subscribers will be able to obtain the pay TV service, since a minimum bit rate of 3Mb/s is recommended for the service. That said, in practice, 5Mb/s are better for the so-called “Boost” services, which are the premium TV add-ons delivered over broadband, such as Sky Movies and Sports. The operator has not said what proportion of its subscribers this rules out, but an educated guess based on recent surveys would be around 20 percent, or 800,000.

TalkTalk is dependent to a large extent on BT’s fiber roll out, since it uses BT’s access circuits under the UK’s local loop unbundling arrangements. TalkTalk has been urging the regulator Ofcom to force BT to cut the wholesale prices charged to retail broadband providers such as itself.

BT is currently building out fiber under a £2.5 billion ($4 billion) project designed to provide at least Fiber To the Curb (FTTC) for two-thirds of the population by 2015, by which time the UK government claims the country will have the fastest average broadband speeds in Europe.

The average broadband speed in the UK had risen to 9Mb/s by May 2012 (compared with 6.8Mb/s a year earlier, according to communications regulator Ofcom), and is heading for 17Mb/s by 2015.