Television Drives Fibre?

February 11th, 2013 by Dylan Leave a reply »

Paul Brislen, of TUANZ, recently visited Malaysia to get some insight into their fibre deployment and uptake. He’s returned convinced that IP-based Television is the key to making fibre work – the driver to bring in customers…

While I don’t deny that’s the case in Malaysia (and has been a big help elsewhere) I just don’t think it will work in NZ.

It’s a chicken and egg situation really. Currently there are so few fibre customers, and so few providers that the it’s simply not an appealing market. Until there is a seriously significant base of potential customers (those with fibre connections already, or able to get them) then no one is going to be willing to make the massive investment in establishing an IPTV operation here.

There are other problems too – the way retail internet in NZ is managed isn’t well suited. In the US and Asia the ISPs providing the fibre and IPTV services also own the infrastructure. Here, however, ISPs provide their services through wholesale connections provided by Chorus, meaning that any given customer has their choice of dozens of providers. It’s even more unlikely, facing that sort of potential fragmentation, that ISPs could afford to establish appealing IPTV operations.

And then there’s content. Where will the content for tens, or hundreds, of IPTV stations come from? There are comparatively few likely choices (look at Sky TV’s listings for a good overview). In Asia and the US there are already many channels operating and providing multiple pay TV providers. That’s not really the case locally. A provider here would only easily have access to the Australasian channels (mostly already carried by Sky) and the Infrastructure required to carry those channels is massive.

Any ISP wanting to establish an IPTV operation here would be looking at tens of millions of dollars expenditure in initial broadcast infrastructure, as well as massive ongoing licensing costs to provide the content to end users.

I simply don’t think New Zealand has the population to support more than a couple of subscription TV providers, especially through the rather niche medium of IPTV.

There is perhaps room for one or two providers to be established and on-sell services through ISPs but that’s not going to be a viable business until there is a large potential audience of fibre users. It’s the chicken. Or the egg? Certainly one of them.