Huawei Technologies
Multi-Play
begins with IPTV
By Nan Ningxuan
Telecom carriers are currently in the process of making
a strategic transformation, from a network-based
business model providing traditional voice platforms, to
an integrated information supermarket model, enabling
more flexibility, customer-orientation, and fast provision
of digital multimedia services. Multi-Play services require
each carrier to offer full services, integrated multimedia
applications via a unified platform. Based on constant
optimization of IPTV audio/video services, the carrier is
expected to explore a broad value-added service market.
Multi-Play becomes
the next service
development trend
F
rom the viewpoint of telecom
development trends worldwide,
telecom carriers are making plans
for transformation. In fact, many
carriers have already released
their transformation strategies, such
as BT, France Telecom, AT&T, China
Telecom, and China Netcom. The key
aim of transformation is to preserve and
develop customers, while at the same
time, exploring new fields, developing new
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MAIN TOPIC
Multi-Play begins with IPTV
Commercial
•Churn defence
•Increase broadband
penetration
Fixed Line
Strategic
Pay TV
Multi-Play
•Reposition from connectivity company to
media company
•Increase broadband access
speed (access revenues)
•Increase ARPU
Broadband
& ISP
•Get a “hub” into the customers’ premise:
- launch additional services
- control access
Mobile
• Gain regulatory influence
• Buy an option for future
Fig. 1 Multi-Play adeptly combines strategy and business benefits
services, and using new services to stimulate
income growth. The core of transformation
is network and service transformation, as
well as corresponding management and
organization architecture. So, a unified
service platform and a unified bearer
network should be set up to support the safe
and reliable transmission of services to end
users. Multi-Play is the ideal service platform,
because it meets the requirements for both
service and network transformation.
Multi-Play adopts user experiences as
its core modus operandi. By providing
unified contents and applications, and using
the service platform and IP core network
for bearing, it is able to provide similar
experiences to users anytime anywhere on
any device. In addition, Multi-Play can help
carriers quickly deploy services and help
reduce overall costs. Therefore, it is seen as
a necessary capability for all carriers.
The Multi-Play platform is able to
quickly transmit services to end users. Its key
advantage lies in its ability to provide users
with 1Play, 2Play, 3Play and 4Play service
packages, as well as combined content
packages, so as to benefit carriers and users.
For carriers, Multi-Play adeptly combines
both strategic and business benefits.
Strategically speaking, Multi-Play lays a
solid foundation for future service releases
and controls the access points, hence, serving
as a port of entry for end users. In regards
to business benefits, Multi-Play can reduce
the user churn rate, improve the ARPU, and
develop new income avenues, as is shown in
Fig.1. End users can also save usage costs, as
the total consumption cost is much cheaper
than that for single services.
In short, Multi-Play is different from
traditional services. In the new value chain,
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AUG 2007 ˙ ISSUE 32
the proportion of access service is drastically
decreased while the proportion of content
and terminal is constantly increasing.
Three conditions for
success
The success of Multi-Play can be
attributed to three conditions: a multi-win
cooperation ecosystem; a stable, reliable
and cost-effective bearer network; and an
innovative business pattern.
Multi-Play involves many fields, including
content and applications, as well as the home
network and terminals. In offering a reliable,
stable network guarantee, Multi-Play
depends to a great extent on a finely tuned
cooperation ecosystem. Therefore, each
carrier should open its platform to smoothly
access content. In this way, they can offer
different content to different users and
enrich user experiences. Terminal devices are
normally provided by carriers, and the cost
usually runs a little over 30% of the total
costs for Multi-Play. An open platform can
smoothly access various terminal devices
and is vital for terminal devices in terms
of cutting down costs. Since Multi-Play
depends heavily on content, it is very
important to protect the security of content.
In the terminal domain, carriers can properly
combine software and terminal devices to
make the digital family dream come true
for users. By doing so, the value chain can
be ably managed, and key procedures can
be controlled. Plus, via terminal integration,
users can enjoy the convenience of mobile
networks at a reasonable price, as well as
the large bandwidth that fixed networks
provide.
A stable, reliable carrier-class bearer
network is indispensable in ensuring highquality transmission of services to end
users, as well as enhancing user experience.
Service developments usually lead to
requirements for a more unified network,
unified management and unified charging
system. Therefore, a unified IP core network
and an operation and maintenance support
system should be formed, instead of single
network support and separate operation and
maintenance support systems. In this way,
new services and new applications can be
transmitted to end users at the fastest speed
and the lowest costs. The network core of
Multi-Play is its fine QoS guarantee, lower
maintenance costs, fast service deployment,
and adaptation to service development
requirements. At present, many carriers in
the world are investing heavily on bearer
networks to prepare for high-quality service
transmission. For example, Deutsche
Telekom is planning to invest 3 billion euros
on network upgrading, which is a prelude
for Multi-Play; and AT&T is going to invest
USD 5 billion on the first phase of network
preparation for Multi-Play.
As Multi-Play services are quite different
from traditional services, each carrier is
required to consult and cooperate with
partners in order to increase control on
the value chain. By doing so, the carrier
can more easily transform the business and
operation pattern in order to adapt to new
service requirements.
Fig. 2 shows the key elements that need
to be in place for the success of Multi-Play.
In general, sufficient market researches
should be made before each Multi-Play
service is released. Each carrier should also
refer to other carriers’ successful experiences
Huawei Technologies
Open standard & Platform
QoE Deployment
Business Tranformation
Win-win
ecosystem
Operation Transformation
Security Requirement
Consulting Partner
All-IP Framework
Carrier Class
Maximize Network Value
Trustworthy
network
Innovative
business
model
Fig. 2 Key elements for the success of Multi-Play
in the industry to aid it in preparation,
design and implementation, guaranteeing
fine service experiences for end users.
Multi-Play relies greatly on content. After a
service is released, the carrier should develop
content-related capabilities, cooperate with
content developers and providers, and
strive to protect the benefits and rights of
content partners, hence ensuring continuous
development of services. In terms of services,
the platform, network and terminal, the
carrier should guarantee high-quality
transmission of content.
IPTV – a key application
of Multi-Play
Multi-Play includes voice, data and video
(IPTV) services. IPTV is a key application
of Multi-Play. In some senses, IPTV can be
regarded as Multi-Play, as the concept of a
“platform” can only be found in the IPTV.
The IPTV platform can be used to release
high-quality video services. Moreover, each
IPTV platform offers high-definition video
services, high-resolution voice services,
and more convenient data services. It also
improves the carrier’s capability of deploying
Multi-Play services, rather than simply
providing the IPTV service.
At present, the single IPTV service is not
capable of accruing profits, but it does offer
carriers strategic value, as well as additional
business value. Strategically, it enables
carriers to control an access point to the
family network. And in terms of business,
it provides the following benefits: it binds
services, consolidates customer loyalty,
reduces the user churn rate, promotes
broadband development, and improves the
ARPU; so carriers are able to enter valueadded service fields such as advertisements
and games, via IPTV. In addition, the
requirement of IPTV concerning the
network and organizational architecture
can also help carriers in building All-IP
networks, and make the expense structure
more reasonable; thus allowing IPTV
and other new services to accelerate the
globalization process for carriers.
According to the estimation of consulting
companies, there are now over 3 million
IPTV users worldwide, and it is expected
that within the coming years, the number of
users and income derived from this service
will increase by 90%. So far, IPTV service
has been available in Western European
countries, and nearly 500 carriers worldwide
are investing in IPTV service.
By deploying IPTV service, carriers
can extend their value chains in the media
field. Their services will be extended
from traditional access services to content
packaging, distribution, and advertisement
services. In addition, if a carrier can make
good use of its experiences in its relationship
with users, the public market and charging,
and overcome its deficiency in content, then
the carrier can easily extend its value chain.
In this aspect, PCCW, Fastweb and FT have
set good examples.
After deploying the IPTV service, the
number of broadband users for PCCW has
increased from 30% less than the growth
rate of the broadband market in Hong
Kong, to 46% more than the growth rate
in Hong Kong; the user churn rate has been
reduced to 0.7%, which is 58.8% down
from the past. In addition to the increase of
broadband user quantity and income, the
ARPU of the IPTV service has increased
from HKD 57 to HKD 114. PCCW has
made a successful transformation in services,
network and organizational architecture,
and has become a leader in the industry.
Furthermore, with its advantage in the
IPTV field, PCCW has attracted many
Pay TV users and become both a telecom
carrier and a media company. Based on
its operation experiences in IPTV, PCCW
is now offering IPTV service consulting
to other carriers and promoting its IPTV
scheme in Southeast Asia. Furthermore, after
purchasing SUNDAY, PCCW made use of
its advantages in content and successfully
transplanted the fixed-network content to
the mobile field. It also deployed the mobile
TV service and offered Quadruple-Play to
attract the mobile user group.
Similarly, by deploying IPTV service, FT
has successfully extended its value chain,
making up for its income decrease from
traditional voice services.
Multi-Play is an important service
platform or capability which can offer
carriers many types of benefits. It can also
help carrier’s successful transformation in
terms of industry integration. The first step
of Multi-Play is IPTV, and its prospects look
promising. However, carriers need to make
efforts to develop services step by step, make
preparations for the network, and cultivate
capabilities. In the ecosystem of the IPTV
industry, carriers that can manage the value
chain well and master key points in the
value chain will receive the best benefits.
By making good use of their networks, user
relationships and advantages in the public
market, carriers can quickly find their
direction in industry integration and obtain
satisfactory benefits.
Editor: Xue Hua [email protected]
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