Global Economics

BT Enters Quad-Play with IPTV Launch


With the debut of BT Vision, the British telecom adds TV over broadband to its list of services, rising to the challenge of rivals BSkyB and NTL:Telewest

BT has today pushed play on its long-touted IPTV offering, BT Vision, moving the telco into the quad-play era proper.

BT Vision offers BT broadband customers the chance to pick and mix digital TV programming and on-demand pay-per-view premium content - such as films and music videos - without a monthly subscription charge and without being tied-in to the telly service.

The telco's IPTV offering picks up the gauntlet thrown down by the likes of BSkyB and NTL:Telewest, which have long been encroaching on BT's - and each other's - territory, as convergence continues to be the order of the day in the telecoms arena.

Back in July, BSkyB announced it was to start selling broadband services to its eight million Sky TV subscribers - including a 'free' broadband package. NTL:Telewest meanwhile became the first quad-player in the UK last year, offering broadband, pay TV, fixed and mobile phone services.

Ian Livingston, BT Retail chief executive, said in a statement: "BT Vision is ideal for people who want more choice than Freeview delivers but who want that extra choice without being tied to a pricey, long-term subscription."

Customers who sign up for BT Vision get a free set-top box, which receives both digital terrestrial channels such as Freeview and on-demand content via the broadband connection. They will, however, have to stump up £90 to cover installation and connection charges, and sign a new 12-month broadband contract - which costs from £22.99 per month.

Content providers signed up to BT Vision include the BBC, Disney, DreamWorks, National Geographic, SonyBMG, Universal and Viacom. Customers of the service will also be able to get 'near-live' on-demand Premiership football starting in summer 2007.

Steve Weller, head of communications services at price comparison website uSwitch.com, said the launch is "positive news" for the industry and consumers alike.

"The delivery of premium content to broadband customers provides communications companies the opportunity to maximise their existing infrastructure and generate a new source of revenue. While BT Vision does not provide a level of content comparable to Sky or NTL:Telewest, it does enable consumers to taste the benefits of 'on-demand' TV - being able to watch what you want, when you want to - without being tied into a lengthy entertainment subscription package," Weller said in a statement.

He added: "We expect Orange and Tiscali to be hot on BT's heels with competing content services, with other broadband rivals following suit in 2007."

Mike Cansfield, principal analyst at Ovum, also emphasised BT's need to up its game to compete in an increasingly crowded space. "This is much more than acquiring customers [for BT] but how well it competes with NTL and BSkyB, and whether it can explain to customers the power they now have to take control of what they view and when they see it," he wrote in a research note.

Recent research from JupiterResearch found that less than 100,000 households currently use IPTV services in the UK. This figure is set to double to 200,000 (one per cent of UK households) by the end of 2007.

By contrast, 77 per cent of UK households already use multichannel TV services - 10.1 million use digital terrestrial TV, 8.6 million use satellite TV and 3.3 million use cable TV, according to JupiterResearch. The analyst house predicts IPTV will reach 1.1 million households by 2011 - considerably fewer than digital terrestrial, satellite, and cable TV.

BT Vision uses Microsoft's IPTV software.

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