Motorola to Acquire Broadbus
July 2006
Motorola announced that it would acquire Broadbus to round out its video offerings. Broadbus’ strong position in the U.S. cable market makes it a good addition to Motorola.
Broadbus is using its success with the cable providers to enter the IPTV video-on-demand market. It has 85 cable deployments and stated that it deploys with a tier one carrier in the U.S.
Broadbus uses solid state memory to distribute video-on-demand content from a central disk based library. It stated that it can support 100 thousand streams with six servers and 112 disk drives. Adding time shifted TV to this service would double the system to support 200 thousand streams with 12 servers. The number of disk drives would grow to 154.
The company states that the replacement of disk drives with solid state memory reduces facility costs such as power, space, and cooling by over 80%. It also states that its system will reduce the number of software upgrades by more than 90%. It has found that these savings can reduce OpEx by about 50 percent.
Source: MRG, Inc., July 2006 IPTV Bulletin
Sky Offers Free Broadband
July 2006
It seems that offering certain components of an IPTV triple play offering for free is a common strategy. Free, of course, means that it is included in the base price of the bundle. Often a basic set of broadcast channels or VoIP services are offered for free.
In a new twist on this strategy, BSkyB, the satellite video provider is turning it on its head. It will provide a free broadband connection for subscribers to its video service. The range of services offered is given below:
Monthly Price |
Download Speed |
Monthly Allowance |
Free |
2 Mbps |
2 GB |
$9 |
8 Mbps |
40 GB |
$18 |
16 Mbps |
Unlimited |
This is a disruptive strategy that repositions BSkyB from a single play video provider to a triple play provider all at once. Its offer of a basic broadband service for free to all video subscribers will be very attractive to the mass market that has not yet committed to broadband. These people know they should have broadband and the ability to get it for “free” will cause many of them to make the move.
This is a direct challenge to the new BT service which is based on free digital terrestrial content and to its 21st century VoIP strategy. It raises the ante against the consolidating cable companies. It also makes it much tougher for the competitive IPTV companies such as Orange and Video Networks.
It seems likely that Sky in Italy will also adopt this strategy to fight off competition from Telecom Italia, FastWeb, and the new digital terrestrial services.
This is also a logical strategy in the U.S. Echostar seems to be exploring its own broadband alternative, including WiMAX technology. Echostar may well find an attractive broadband offering in the U.S. necessary to counter increasing competition from the cable and the IPTV companies.
{Note: analyst comments are italicized}
Source: MRG, Inc., July 2006 IPTV Bulletin
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