| Subject: Microsoft, Bell Canada team for 'Internet TV' |
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Date Posted: 05:05:17 10/10/03 Fri
Microsoft, Bell Canada team for 'Internet TV'
Would let Bell deliver TV signals to apartment buildings
Ian Karleff
Financial Post
Friday, October 10, 2003
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Bell Canada said yesterday it will work with Microsoft Corp. to test the delivery of television using Internet technology in yet another move to snatch customers from its cable rivals.
If the trial proves successful, it will give Bell's ExpressVu another avenue to try to win a piece of the lucrative apartment building market, which accounts for 40% of Toronto households, and is now 90% serviced by cable.
The selling of television to multiple-unit dwellings is estimated to be worth $5-billion in annual revenue, but satellite providers such as Bell have complained that cable competitors have sewn up the market by signing exclusive deals with building owners.
Bell has attempted to crack into this market using very high-rate digital subscriber line (VDSL) technology, and observers say the Microsoft trial is another kick at the same can.
"This is another piece of technology that Bell is using with Microsoft to be able to deliver television signals to homeowners [on their television sets]," said Eamon Hoey, president of Hoey & Associates Inc.
Bell's satellite television service, with 1.4 million customers, faces technical hurdles when it comes to the apartment market, in that a satellite dish needs a south-west exposure, and some building owners prohibit residents from installing the dishes.
Bell recently said it plans to apply for a new broadcasting licence for its ExpressVu service that would enable it to run television signals through its high-speed Internet network.
Bell's impetus to enhance its television strategy is fuelled by the company's belief cable companies such as Rogers Cable Inc. and Shaw Communications Inc. will get into the $30-billion telephony market using Web-based technology.
"This is saying that Bell will continue to be in the entertainment package business, and it can't deliver at all times its service via ExpressVu. What this enhances is all the copper they have in the ground," said Mr. Hoey.
Bell Canada announced in September it will convert its telephone network into one based on Voice Over Internet Protocol, which will eventually give it the ability to sell services such as video calling or document sharing over telephone lines.
Telephone companies have leveraged their copper wires in a number of ways: high-speed Internet over digital subscriber lines and phone services like voicemail and call waiting.
Competition with cable rivals is getting more intense. This week Bell launched a bundled plan in which customers get a discount for using a combination of Bell's high-speed Internet, satellite TV, mobile phone and long-distance plan.
Microsoft announced a similar trial with India's Reliance Infocomm Ltd., and recently signed similar trial agreements with two major cable operators in Mexico. It plans to employ seven or eight such trials, with the software ready for full-scale deployment by the end of 2004.
Ed Graczyk, marketing manager for Microsoft TV Platform, said part of the trials will be to calculate the cost to companies like Bell Canada of delivering television over the Internet.
"It will be a lower cost than some older technology because this is based on more modern video compression technology," Mr. Graczyk said.
It's likely subscribers will pay only US$50 for a set-top receiver once the underlying chip technology gets up to speed in 2007, rather than as much as US$200 for set-top boxes used by satellite or digital TV today, he said.
Central to Microsoft's plans is an attempt to make its own video compression technology a standard for the television and movie industries. The technology, Windows Media Series 9, is embedded in the company's PC operating system and has been used by a number of pay-TV companies.
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