Internet Protocol TV making inroads in Europe

Technology sends television over telephone lines

November 20, 2006|Toby Sterling, Associated Press

AMSTERDAM -- Wart Fransen points a remote control at a little box atop his television and firmly presses down on the button to change the station.

There's a delay of about a half-second, and then the new channel comes on. The image is frozen in place for an instant before it begins to run smoothly.

Fransen is now watching TV over his telephone line, a technological marvel. But he's not that impressed.

"I use it now and again, definitely for soccer," he says of the service that came bundled with his $50 -per-month high-speed Internet connection. "The remote is really slow. But I think the image is better than cable."

European phone companies, like their American and Asian counterparts, are dreaming of a future in television using a technology known as Internet Protocol TV, or IPTV. Most of these companies are boosting the capacity of their copper phone wires with next-generation versions of DSL broadband technology, though some homes are getting IPTV service over new fiber-optic cables.

The foray into video is a counter strike against the cable TV companies that have broken into the phone business using another IP technology known as Voice over IP, or VoIP, stealing customers and driving down prices. Yet despite the obvious business logic of returning fire with television, phone companies face a greater challenge, as IPTV and video over DSL are relatively unproven technologies as compared with VoIP.

Even so, while IPTV is just getting off the ground in the United States through AT&T Inc. and some rural phone companies, European and Asian carriers have already built a substantial base of television customers.

By the end of 2006, the number of IPTV subscribers in Europe is expected to reach 3.3 million, up from less than a million a year earlier, the Gartner Group estimates. The research company forecasts that number will double in 2007 and mushroom to 17 million by the end of 2010.

Hong Kong's PCCW Ltd. is the world's largest IPTV company, with more than 650,000 customers. France has the most IPTV subscribers of any country, with more than 1.6 million as of earlier this year, spread between France Telecom SA and start-ups like Iliad SA and Neuf Cegetel SA. Spain's Telefonica SA claims more than 300,000 users.

More recently, Swisscom AG launched subscription TV in Switzerland, while Germany's Deutsche Telekom AG introduced the service in Germany, France, Hungary, and Croatia. Both Swisscom and DT, as well as AT&T, are using an IPTV platform from Microsoft Corp., confident they have resolved software and hardware glitches that slowed their deployments. Britain's BT Group PLC is expected to launch Microsoft-based IPTV services soon.