IPTV deployment - Lessons can be learnt from China

Three of the world's largest IPTV deployments are currently going on in China. The largest is in Hong Kong, where PCCW deployed its own technology (since licensed to Huawei) and now has more than 800,000 customers. On the mainland, Shanghai Media Group (SMG) has deployed IPTV over China Telecom's infrastructure in Shanghai and hit 150,000 subscribers since launching in September 2006. In the north, in Harbin, China Netcom and SMG have partnered to deploy IPTV since the summer of 2005 and are nearing system capacity with 112,000 customers.

Ying Wu, a Bell Labs veteran who co-founded UTStarcom, the company providing most of the IPTV infrastructure to the two China telcos, is predicting as many as 1 million mainland Chinese IPTV subscribers by year's end. One reason for that optimism is that UTSI and ZTE, which provides half of the set-top boxes SMG is using in Shanghai, have been able to deliver IPTV technology that uses low-cost set-top boxes and is viable at a very low average revenue per user (ARPU).

These deployments are unlike anything that is happening in the U.S., in large part because the Chinese market is totally unlike the U.S. market. For one thing, Shanghai Media Group, a government-owned entity, was granted the first of what are now four IPTV licenses in China and has partnered with the two major incumbent government-owned telcos, China Netcom and China Telecom, because the telcos themselves are forbidden from owning content or content licenses.

The services SMG has delivered use UTStarcom's Rolling Stream broadband TV and video-on-demand infrastructure, which is designed for rapid scalability and uses MediaStation streaming and storage servers to keep content and network intelligence within the network, not distributed to individual set-top boxes.

UTStarcom built its IPTV technology on the next-generation architecture it began to design seven years ago for its Personal Access System and includes both the Mswitch softswitch already serving 55 million subscribers in China and the IP-DSLAM it has sold in China, India and Japan.

Both China Netcom and China Telecom are delivering the service over 3 Mb/s copper lines and currently are limited to standard-definition TV. The government maintains tight controls over content, which is limited. There are services such as 48-hour playback of any show, network-based personal video recording (PVR) capabilities and interactive features. This approach enables the Chinese to use very low-cost set-top boxes and to offer services for as little as $5 per month.

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