For most telcos, deploying IPTV is the primary way to stay competitive against cablecos and satellite providers, presenting an opportunity to compete, and win, with advanced triple play services. But the cost of ingesting and transmitting video tops the list of hurdles for telcos to overcome when looking to deliver on IPTV promises. Fortunately, virtual headends can level the triple play playing field for converged video, voice and data services, creating an ideal scenario where rural telcos can deliver triple-play services.
According to a recent report, Multimedia Research Group estimates that global IPTV subscribers will grow to 89.6 million in 2012, triple the number of 2008 subscribers. One key reason for IPTV’s success is that it is an ideal solution for telcos to gain customers for residential and business service offerings.
With the tremendous benefits IPTV brings to the table, including services such as high-definition content, non-linear interactive programming, e-commerce, high-speed data, digital voice, and video- and gaming-on-demand, it’s clear why demand is growing.
But unfortunately, IPTV can sink or save rural telcos competing against intruding cable or satellite carriers. Expensive IPTV headend costs start at $500,000, and can easily escalate to well over $2 million over a five-year period. Initial hardware costs alone can cripple rural telcos, not to mention the considerable operational expenses to keep the service running.
Thankfully, virtual headends offset the cost of IPTV services by amortizing the investment across multiple telco cooperatives. In this scenario, multiple rural telcos share capital, integration, content aggregation and distribution costs to create a single, networked headend. Content is then multicasted throughout the shared network to deliver the needed programming and services for each telco subscriber. Telcos band together through virtual IPTV headends to deliver top-quality triple-play services to subscribers at a fraction of the price.
Technical Considerations
Developing virtual headends requires numerous technology considerations. Among the primary infrastructure concerns, there are four key points that must be taken into consideration:
- The infrastructure must be scalable to share the cost with as many telcos as possible. The network must also be able to add and remove telcos as needed. The same goes for new programming and service options.
- Quality of Service (QoS) reliability is critical. The telco must guarantee a consistent high-level of video quality delivered to the subscriber. It is important that the signal be delivered in a predictable and easily-monitored manner.
- Video transport must be highly efficient to preserve the business case of IPTV virtual headends. Distribution costs need to be minimized by optimizing bandwidth utilization.
- The transport network must be highly available. Protections and reliability mechanisms are needed to preserve delivery uptime.