Telco Challenges in Delivering Content

By Michael Silbergleid, Contributing Editor

Today, the expectations of consumers is that they should get video on whatever device they have wherever they may be. That’s a particularly problematic issue for the nation’s small and medium-size telecom network operators (think local and regional phone companies, local cable companies, wireless service providers, and the like).

At TelcoVision 2013 this week in Las Vegas, these operators faced the prospect of being in the video-delivery business, like it or not.

In his keynote Telco Video: Myths, Realities and What Comes Next?, Keith Kelley, SVP/GM of Telco CPE (consumer premises equipment), ARRIS, laid it on the line: “Everyone has a bandwidth issue.”

That might have been the understatement of the day. Video will soon account for more than 65% of Internet traffic by some accounts, affecting not only those in attendance but telecom’s satellite and cable competitors as well.

According to Kelley, although content is still king, the consumer watches more of that content on more devices, especially in the multiscreen home — all requiring more bandwidth.

4K Ultra HD
And providers think that HD hogs bandwidth … ha! Luckily (for some), 4K uptake may take longer than TV-set manufacturers hope.

“It’s not a 2015 thing,” said Kelley, opining that 4K (1080p60) won’t see real uptake until the second half of the decade, with movies requiring twice the HD bandwidth and sports demanding up to quadruple the bandwidth.

Echoing that at another conference was Jerry Steinbers at SMPTE’s 2013 Annual Conference and Exhibition this week in Hollywood. 4K, he said, is a “monumental task with not a lot of return.”

Another 4K issue is that homes won’t be all-4K homes. According to Kelley, the first room will eventually be 4K, but the second and other rooms will still be HD (and there’s still a large installed base of SDTVs). That means operators will need dedicated 4K channels in addition to HD channels, with transcoding for a range of mobile devices. (And let’s not forget those SD secondary channels that no one seems to talk about in the 4K universe.)

Power of the Cord
Although the press and analysts come out with almost daily stories about cord cutting, there’s one reason people don’t cut the cord: the convenience of one bill for services as opposed to a bill for Internet services, Hulu, Netflix, etc. For the time being, the battle will play out between the convenience of a single provider, with its multitude of pricing and viewing options, and lower cost and the ability to pay only for the specific services wanted. But, with cable operators paying big for big-time sports-television rights, the battle will only get more intense as live television goes head-to-head with video-on-demand.