Cubic and Vooz positive on IPTV; Buddy more cautious

22 Mar 2012

Supersak na Nakhonphanom, the CEO of IPTV service provider Cubic Associates Group (Thailand), claims that the local IPTV market is expected to more-than double in size this year to THB3 billion (USD97 million), with continued ‘rapid’ growth over the next few years, despite facing major challenges from satellite, cable and terrestrial broadcast TV, which is fast evolving. As reported by CommsUpdate, Cubic recently announced a partnership with state-owned telco TOT to offer IPTV services over the latter’s fixed network connections from next month; Cubic is also looking for other network partners if TOT decides against an exclusive partnering strategy. Quoted in a report by The Bangkok Post, Pichakorn Wongwishyakorn, Cubic’s marketing manager, pointed out that the government’s drive to increase fixed broadband use is in IPTV’s favour, while the satellite industry is hampered by limited frequency resources and a shortage of satellite transponder capacity. ‘Content developers will have to resort to delivering their programmes via alternative technologies including IPTV,’ he said. One selling point is that Cubic’s technology platform enables it to deliver high-definition (HD) content over connections as slow as 2Mbps, which are widespread in Thailand. Mr Pichakorn added that only roughly a third of Thai households had cable or satellite services, representing an opportunity for IPTV. Cubic’s content line-up will include free and paid channels in addition to interactive services, based on an advertising revenue model instead of directly selling content or sharing revenues of network operators. Pichakorn added that the ad-based IPTV service model is made possible by the fact that IPTV services are not currently regulated by the National Broadcasting & Telecommunications Commission, as they are not transmitted over the electromagnetic spectrum. He said Cubic expects to have 500,000 customers in the first year of operation, rising to 2.5 million within five years.

Also quoted in the Post report, Virat Ovararint, the president of V.R.M. Voizplus, operator of the Vooz IPTV service, indicated that the time is right for IPTV as affordable higher-speed broadband has become available, and the total broadband subscriber base has increased to around four million, up by roughly a million in just a year. Vooz has invested THB400 million in IPTV and is in talks with content providers and the main ISPs to bundle its services, whilst it is preparing to sell its set-top boxes via 500 dealers. Echoing rival Cubic, Mr Virat said Vooz’s set-top box was optimised for 2Mbps speeds and above, via Wi-Fi or LAN connections, while users can access channels on TVs, smartphones and tablet computers via the same account. However, in contrast to Cubic, Vooz’s business model is based primarily on revenue-sharing with content – especially film – providers. ‘We expect to sell one million set-top boxes this year,’ said Virat, adding that the service could attract those who do not want to pay monthly subscription fees charged by cable and satellite TV providers.

Suttisak Kundhikanjana, the managing director of Advanced Datanetwork Communications (ADC), a subsidiary of cellco Advanced Info Service (AIS) and provider of the Buddy broadband and IPTV service (a joint venture with TOT), said the IPTV sector now has four key players – ADC, Cubic, Vooz and Jasmine International’s 3BB (the triple-play brand of fixed broadband network operator Triple T Broadband). He also predicted a move into the mass-market for IPTV, and said programming will be the key – or the main barrier – to IPTV’s success, with the rights to ‘the best programming’ controlled by quadruple-play operator True Corp’s TrueVision pay-TV arm or other local cable and satellite TV service providers. TeleGeography notes that True previously revealed plans to roll out IPTV alongside its other pay-TV services, but it has stopped short of developing a commercial IPTV service. Suttisak said that Buddy now has 6,000 IPTV customers but expects 30,000 to 40,000 subscribers in due course, while he expects the overall IPTV market to ‘exceed 50,000 by the year-end’ – far below the number being suggested by Vooz and Cubic.