October 2007




IPTV – A Practical Guide to Success




                                   A Stratecast Whitepaper
      ...
Frost & Sullivan reports are limited publications containing
valuable market information provided to a select group of
cus...
IPTV – A Practical Guide to Success




TABLE OF CONTENTS


Executive Summary                                       4

Int...
EXECUTIVE SUMMARY

Incumbent service providers are striving to provide their customers with innovative voice,
video and da...
Combined with these extensive network, vendor, vendor solution and technology choices is
the uncertainty of how much bandw...
INTRODUCTION

As service providers across the globe press ahead with IPTV deployments, business and
operations strategies ...
Support. All of these elements play a critical roll in mitigating risks and ensuring a
successful IPTV roll-out.

Strategy...
Source: Stratecast


These critical choices are all inter-related as the decisions affect bandwidth requirements,
equipmen...
equipment. Underlying the equipment interoperability requirements is the need for a highly
scalable and reliable core tran...
architecture and augmenting existing OSS/BSS capabilities to support IPTV in concert with
existing products and services m...
findings expressed by service providers was the need to work with one or two key business
partners that brought a full sol...
It is clear from findings in both surveys that service providers will rely on key partners that
have a deep understanding ...
MEETING THE CHALLENGE: WHY TELLABS?

Tellabs has developed a robust Broadband Access Professional Services Practice that
a...
Palo Alto
                                                                                                            2400...
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IPTV - A Practical Guide to Success

  1. 1. October 2007 IPTV – A Practical Guide to Success A Stratecast Whitepaper Sponsored by Tellabs Author: Becky Watson, Program Manager Communications Infrastructure and Convergence
  2. 2. Frost & Sullivan reports are limited publications containing valuable market information provided to a select group of customers in response to orders. Our customers acknowledge when ordering that Frost & Sullivan reports are for our customers’ internal use and not for general publication or disclosure to third parties. No part of this report may be given, lent, resold, or disclosed to non-customers without written permission. Furthermore, no part may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the permission of the publisher. For information regarding permission, write: Frost & Sullivan 7550 West Interstate 10, Suite 400 San Antonio, TX 78229 United States 2
  3. 3. IPTV – A Practical Guide to Success TABLE OF CONTENTS Executive Summary 4 Introduction 6 IPTV Service Roll-outs: Key Challenges 6 Strategy and Planning 7 Network Infrastructure 8 IPTV Support 9 IPTV Requirements and Choices 10 A Critical Key to Success – A Strong Business Partner 10 Conclusions 12 Meeting the Challenge: Why Tellabs? 13 LIST OF FIGURES IPTV Strategy Considerations 7 Fulfillment Vendor Requirements 11 3
  4. 4. EXECUTIVE SUMMARY Incumbent service providers are striving to provide their customers with innovative voice, video and data services to create loyalty, increase spending and provide their customers with an exceptional quality of experience. Service providers have many choices when it comes to network architecture and solutions, vendors and vendor solutions, and technology choices. Just a few of these choices are: • Network and Architecture - Consideration of access, metro and core network strategies and technologies within each. o Access technologies and infrastructures such as digital subscriber loop (DSL), passive optical network (PON) and Ethernet. o Core transport capacity requirements and technologies includes Internet Protocol (IP), Multiprotocol Label Switching (MPLS), and virtual private LAN service (VPLS) and, optical transport. o Content choices include applications technologies such as Moving Picture Experts Group two, three and four coding standards (MPEG-2, MPEG 3, MPEG-4) and, content aggregation and security. • Vendor Solutions – Consideration of end-to-end solutions, best-of-breed, single solutions, and/or a combination. End-to-end solutions are defined as single vendor solutions that are sold and primarily manufactured by a single vendor. Best of breed solutions may be provided by a single vendor who has partnerships with other vendors and brings an end-to-end solution to the market or conversely can be architected by the service provider engaging with multiple vendors. • Vendors - Network Equipment Manufacturers, IT vendors, and independent software and hardware vendors. Additionally, professional services vendors such as service integrators, consulting firms and engineering firms are part of the vendor ecosystem that can be utilized. • Technology Choices - Service providers planning IPTV architecture have multiple choices for access, metro and core network segments such as: o Key technology choices for access include not only high level technologies such as DSL, PON and Ethernet but architectural choices such as fiber-to-the- home/premise or fiber-to-the curb or node and overall capacity requirements. Choices for PON types such as Broadband PON (BPON), Ethernet PON (EPON) and Giga PON (GPON) must also be considered. o Transport capacity, multiple technologies, aggregation strategies, specific infrastructure network elements and consideration of existing network architecture must be taken into account. Service provider choices include optical technologies such as dense wavelength division multiplexing (DWDM) and related infrastructure network elements, IP/MPLS, VPLS technologies and network elements including routers, switches, video encoders and decoders, applications servers, subscriber services servers, video servers and many more. 4
  5. 5. Combined with these extensive network, vendor, vendor solution and technology choices is the uncertainty of how much bandwidth each subscriber will need in the future to satisfy expanded content consumption, multiple devices and increased voice, video and data applications on the single connection. This introduces increased risk into the IPTV equation. Service providers can increase success and reduce risks by concentrating first on the foundation of any new ser vice; the underlying core network infrastructure and a robust support environment. Services will continue to evolve over time as more innovation, convergence and content are introduced. Converged voice, video and data services, multiple content sources, interactive content and the ability to move content between devices in addition to other innovative services creates a more complex scenario and furthers the need for service providers to enable a strong network foundation. To enable these innovative services, a service provider needs to implement a scalable, reliable network infrastructure along with a complete support environment from customer order to network resource fulfillment to installation and maintenance to deliver quality services both now and in the future. This whitepaper will discuss key elements that are required to successfully support IPTV and triple play services as well as how an emphasis on these elements can optimize deployment, increase revenues, and ensure delivery of future proof services while reducing risks associated with new services, infrastructures and technologies. Stratecast will give insight on why these key elements are necessary for success and discuss how Tellabs’ solutions and services enable service providers to deliver triple play and IPTV services while evolving their network infrastructure 5
  6. 6. INTRODUCTION As service providers across the globe press ahead with IPTV deployments, business and operations strategies continue to evolve and extend beyond the controlled market roll-out phase. The ability to scale, support and maintain the network infrastructure as well as support new services from the back office to the home and all points in-between becomes critical in order to succeed in an extremely competitive market. Early launches of IPTV by legacy wireline service providers coincide with efforts by Multiple System Operators (MSOs) to keep existing customers and win new ones. MSOs are offering bundles of voice, data, video and mobile services that include innovative new features and capabilities such as interactive video services, individual content, remote programming of the television via mobile devices, and interactive user features for television and mobile devices. In addition to competitive pressures, service providers face a number of other challenges when deploying IPTV including high consumer expectations, increased network infrastructure requirements, new technology choices, and ensuring quality of service in an environment with constantly shifting bandwidth demands. Deployment of IPTV that is competitive with, and potentially superior to, existing video offerings requires an open, modular architecture that is optimized for digital television and video display devices. Such architecture provides maximum flexibility for exploiting world class solutions at all points in the supply and delivery chain. In order to accomplish these goals and expedite expansion of IPTV services and other next-generation IP and IP Multimedia Subsystem (IMS) applications, service providers must choose integration partners and vendors that have both knowledge of, and experience with, multiple transport network architectures, protocols and technologies (IP, IMS, Signaling System 7/SS7, etc.). Equally important is the necessity for vendor partners to have the expertise to enable seamless interoperability of an end-to-end IPTV solution. A key challenge for IPTV infrastructure is ensuring adequate capacity and performance is available as the network evolves. Quality of Service (QoS) and Quality of Experience (QoE) must be engineered to provide 99.999% reliability as witnessed in legacy telecom networks but with the added requirement of ensuring high quality video content and interactive content delivery. Video content and delivery is adversely affected by network issues such as packet loss, delay and jitter. To alleviate these issues IPTV infrastructure must be architected to support high availability and provide a guarantee of sufficient bandwidth to support video services. “Best effort” IP networks that are architected for data do not support IPTV requirements for minimal to no packet loss, delay, and jitter that adversely affect the quality of video transmission. IPTV SERVICE ROLL-OUTS: KEY CHALLENGES Roll out of IPTV services cross the entire service provider organization from initial strategic planning, to network deployment, to customer activation and ongoing customer service and maintenance. Three key areas that need to be taken into account for IPTV implementations are (1) Strategy and Planning, (2) Network Infrastructure and, (3) IPTV 6
  7. 7. Support. All of these elements play a critical roll in mitigating risks and ensuring a successful IPTV roll-out. Strategy and Planning Perhaps the most important and time consuming challenge that a service provider must undertake is the development of an infrastructure strategy and associated implementation planning for deployment of new network infrastructure and new services. In the legacy voice environment, proprietary, single vendor solutions were typical and the service provider did not have to make many decisions due to limited choices. In today’s IPTV environment a multi-vendor, multi-technology and geographically varied approach is unavoidable. The inherent complexity of both network infrastructure and OSS is further complicated due to service provider mergers, acquisitions, and management strategies in addition to industry and vendor technology advancements. The level of complexity in existing service provider environments makes strategy and planning even more critical. Stratecast has defined strategy and planning activities that occur in each of four basic categories; (1) Equipment, (2) Network Architecture, (3) Services and Content and, (4) Back Office. Figure 1 illustrates the complexity involved in rolling out successful IPTV services within these four categories. It should be noted that this is just a sample of some of the critical choices and decisions that need to be acknowledged. There are numerous other business and technical issues that must be considered throughout the planning process. Figure 1: IPTV Strategy Considerations 7
  8. 8. Source: Stratecast These critical choices are all inter-related as the decisions affect bandwidth requirements, equipment requirements, OSS/BSS requirements as well as the services. Two examples of that interdependency are: 1. More bandwidth is required if MPEG-2 technology is used versus newer technologies (MPEG-4/AVC/H.264 and VC-1.H.265). However the newer technologies may not be as mature as MPEG-2 and may affect requirements for roll out timeframes which may increase the risk initially but not over the long term. The complexity is elevated by multiple vendor choices and solutions combined with the need to bring these services to market very quickly. 2. Unicast services create additional requirements from an OSS/BSS perspective. The interactivity affects the OSS/BSS environment significantly as real-time content, activation, content charging, balance checking and other back office functionality is required to support IPTV rather than the post-processing approach currently in use. Network Infrastructure The network infrastructure must be engineered to accommodate a payload comprised of hundreds of analog, standard, and High-Definition TV (HDTV) channels and other media content as well as providing a foundation for future undefined services. The IPTV infrastructure is both voluminous and complex and is comprised of multi-vendor 8
  9. 9. equipment. Underlying the equipment interoperability requirements is the need for a highly scalable and reliable core transport network infrastructure. Core network transport and the underlying network elements that comprise the IPTV infrastructure is one of the most costly portions of the end-to-end architecture. IPTV infrastructure requires significant capital expenditure (CapEx) to deploy but even more costly is the associated re-engineering and re-architecting of the network if bandwidth and video service delivery requirements cannot be met. The transport portion of an IPTV infrastructure forms the foundation of a successful IPTV architecture. Properly engineered transport infrastructure allows the service provider to meet its current and future reliability, scalability and services delivery needs. The most important aspect of providing quality video transmission over IP infrastructure is minimizing packet loss. While packet loss can be corrected and compensated for in an IP data transmission, IP video requires minimal to no packet loss. In addition, there are other critical requirements to enable a superior customer experience and the ability to successfully transmit video over an IP network including: 1. High availability and guaranteed bandwidth. 2. Low transmission delay. 3. Low network jitter. 4. Low packet loss. These network qualities are similar to those required to provide quality voice services, however, IPTV services require those qualities to be delivered across many more network elements, content access points and providers, encoding schemes, OSS/BSS, and other operational components. Likewise, service providers want to be able to manage IPTV services in much the same manner as other services so as not to create a separate IPTV architecture and service silo. Creating these silos increases operational costs significantly. The consolidation of OSS/BSS solutions and data is a critical part of a service provider strategy for planning and implementation of IPTV infrastructure and services. IPTV Support The IPTV service provisioning process is still very complex and must be optimized to accommodate mass market transaction volumes while achieving cost-per-transaction targets that are much lower than what is experienced today. Quality is also an issue. In some deployments, order-to-installation failure rates have exceeded 50%. 1 All of these factors significantly impact both the consumer and the service provider. IPTV service provisioning requires a high level of automation and integration with existing customer- and network-facing systems. Implementing “yet another silo” of Operation Support System/Billing Support System (OSS/BSS) capabilities is expensive and leads to an overwhelmingly high total cost of ownership for the service. Adopting a common OSS/BSS 1 More detailed findings and insight on IPTV strategies can be found in the Stratecast Perspectives and Insight for Executives (SPIE), SPIE 2007-25, “Scaling IPTV Operations” , published in July 2007. 9
  10. 10. architecture and augmenting existing OSS/BSS capabilities to support IPTV in concert with existing products and services makes the service provider more flexible and responsive to customer needs. Vendor tools and integration expertise that enable a converged OSS/BSS support structure as well as provide the ability to support legacy and next-generation voice, video and data services are the mechanism(s) for being responsive to existing and future revenue realization and customer support requirements. IPTV REQUIREMENTS AND CHOICES As illustrated in Figure 1 service providers have many choices and requirements from business, technology and partner perspectives. To meet competitive pressures and move beyond an initial IPTV roll out phase, services providers must focus on key requirements from both a service and technology perspective. In order to succeed in the IPTV realm, service providers must: • Cost-effectively scale to thousands, and for larger service providers, millions of individual users, as opposed to central households. • Establish an environment that accommodates multi-vendor sources for content, bandwidth, and applications. • Accommodate rapid development and implementation of compelling new applications versus ubiquitous, commodity-type services. • Deploy reliable infrastructure and support solutions that ensure a high quality customer experience. Coupled with market and consumer expectations, the choices and decisions that must be made will not be ubiquitous across a service provider’s entire network. Different deployments may be required for overbuild, migration and integration of legacy and greenfield networks. As a result interoperability and operations, administration and maintenance (OA&M) all become exponentially more complex. Service providers need to consider these factors when planning, building and operating the overall network infrastructure to ensure that business cost and revenue requirements as well as customer expectations are met and/or exceeded. Service providers can address these complex issues by choosing partners that not only have product solutions but have the expertise to work through these strategic issues to develop a cohesive network plan that accommodates multiple network topologies, vendors, technologies and protocols. These partners are more than just approved vendors; they become strategic partners in the service provider’s long term success. A CRITICAL KEY TO SUCCESS – A STRONG BUSINESS PARTNER Stratecast conducted a survey in 2006 with North American service providers to gain insight into their criteria for choosing key vendors and vendor solutions. 2 One of the key 2 More detailed findings and insight on service provider strategies can be found in the Stratecast study “Service Provider IMS Strategies,” CSNA 7-01, published in its CSNA program in January 2007. 10
  11. 11. findings expressed by service providers was the need to work with one or two key business partners that brought a full solution to the table. From a product perspective, a “full solution” is defined as a pre-integrated, multi-vendor, best of breed solution versus an end- to-end, single vendor solution. From a business partner perspective a “full solution” includes working with key partners that bring an ecosystem of services, developers, and solutions to enable a high quality of experience for their customers. Service providers stated that they will rely on trusted partners and vendors for guidance, migration strategy insight, and deployment and solutions that bring best practices and efficiency to their organizations. Service providers have requirements in regards to supporting projects from a financial, internal resources and existing network topology perspective. The financial perspective involves decisions as to what extent outside vendors are involved in a project. Whether or not an end-to-end vendor solution or a portion of the project is supplied by a trusted partner, service providers must be able to work with a key partner that can enable flexible solutions based upon individual financial needs and resource requirements. For example, a service provider could engage a partner for strategy and planning while managing deployment internally. Additionally, Stratecast recently published a study in its OSSCS program titled, “CSP Fulfillment Requirements.” 3 In this study Stratecast interviewed twenty Tier, 1, 2 and 3 telephony, cable and broadband service providers to gain insight on their fulfillment strategies. Part of this study explored service provider vendor expectations. Figure 2 illustrates the finding from this study and further quantifies service providers’ requirement for a strong, knowledgeable business partner as a key requirement. Figure 2: Fulfillment Vendor Requirements “You need to know about our business. You really need to understand the volume, scope, and range and the difference between a DS-1 and a T-1.” -- Large wireline CSP Source: Stratecast 3 More detailed findings and insight on service provider fulfillment strategies can be found in the Stratecast study “CSP Fulfillment Requirements,” OSSCS 08-07, published in its OSSCS program in August 2007. To obtain a copy of these or other Stratecast reports, please dial 877-463-7678, or send a request to inquiries@stratecast.com. 11
  12. 12. It is clear from findings in both surveys that service providers will rely on key partners that have a deep understanding of the service providers’ business, have strong domain expertise, have reliable and scalable solutions and can provide a trusted partner relationship. Additionally, service providers require their partners to provide standards-based products and solutions and have the ability to integrate those solutions within the existing architecture. Stratecast has repeatedly said that service providers will not retire existing network or back office assets until they are at end-of-life; integration is a key element for IPTV solutions. CONCLUSIONS Service providers are moving beyond the traditional vendor/customer relationship when it comes to rolling out new and complex services. One way for service providers to successfully deploy IPTV infrastructure and services is to work with equipment manufacturers that provide comprehensive planning and strategy support, strong product portfolios, flexibility, a robust ecosystem of partners and value long term customer relationships. These partnerships are the ones that can successfully enable service providers to deliver IPTV architecture, services and their increase success in this new market. Experienced network equipment vendors have distinct core competencies that can be effectively leveraged. These competencies lend themselves to successful service provider IPTV launches and distinguish network equipment vendors from traditional professional services vendors and systems integrators: • Requirements Gathering – Understanding the desired customer experience, the operational capabilities, and having expertise and experience in delivering core transport and access network solutions. Delivering a consistent quality of experience is the hallmark of network equipment providers in support of IPTV roll-outs. • Integration Services – IPTV architecture is complex and requires extensive integration to ensure interoperability. Integration of disparate network elements and having the ability to architect an end-to-end solution is an inherent and necessary competency for network equipment vendors. • Test and Measurement – Establishing accurate trial and test frameworks to enable objective and thorough evaluation of operational processes, interoperability, feature readiness and assessing readiness for commercial service. • Comprehensive Program Management – Supporting all of the critical network elements including those previously selected by a service provider, third-party and preferred vendor solutions. 12
  13. 13. MEETING THE CHALLENGE: WHY TELLABS? Tellabs has developed a robust Broadband Access Professional Services Practice that addresses key IPTV solution requirements such as strong network infrastructure, strong partnerships and a comprehensive program devoted to service provider success. The Tellabs Broadband Access practice offers expert services targeted at supporting service provider IPTV roll-outs. • Business Consulting • Network Integration • Network Architecture • Cabinet Upgrades • Network Design • Management Systems Services • Third Party Assessment • Operations Support Services • Element Integration Testing • Third Party Assessment • Deployment Services • Resident Engineering • Program Management Tellabs has proven its expertise with access, core and transport network elements and infrastructure solutions in the telephony domain. This expertise addresses the service provider requirement for a trusted partner with domain expertise. Along with Tellabs’ network infrastructure domain expertise, Tellabs brings best-of-breed, flexible solutions and services strategy that enables service providers to architect customized and standards-based IPTV solutions to address individual financial models, technologies and services. From initial market research to ongoing operational support, Tellabs Broadband Access Professional Services Practice draws on years of experience architecting and delivering service provider networks. Tellabs brings this experience along with its planning, engineering, deployment, and operations expertise to its Broadband Access Professional Services Practice. Becky Watson Program Manager – Communications Infrastructure and Convergence Stratecast (a Division of Frost & Sullivan) bwatson@stratecast.com Frost & Sullivan Whitepaper 13
  14. 14. Palo Alto 2400 Geng Road, Suite 201 Palo Alto, CA 94303 Tel 650.475.4500 Fax 650.475.1570 San Antonio 7550 West Interstate 10, Suite 400, San Antonio, Texas 78229-5616 Tel 210.348.1000 Fax 210.348.1003 CONTACT London US 4, Grosvenor Gardens, London SWIW ODH,UK Tel 44(0)20 7730 3438 Fax 44(0)20 7730 3343 877.GoFrost Bangalore myfrost@frost.com http://www.frost.com Bangkok Beijing Buenos Aires Cape Town Chennai Delhi Dubai Frankfurt Kuala Lumpur London Mexico City ABOUT STRATECAST Mumbai Stratecast directly assists clients in achieving their objectives by providing critical, objective and accurate strategic insight, in a variety of forms, via an access-and-industry-expertise-based New York strategic intelligence solution. Stratecast provides communications industry insight superior to Oxford a management consultancy, yet priced like a market research firm. Stratecast’s product line includes: Monthly Analysis Services [Convergence Strategies & Network Architectures (CSNA), Palo Alto OSS Competitive Strategies (OSSCS), Network Professional Services Strategies (NPSS), Paris Consumer Market Strategies (CMS), and Business Market Strategies (BMS)]. Weekly Analysis Service [Stratecast Perspectives and Insight for Executives (SPIE)], Standalone Research, and San Antonio Business Strategy Consulting. Sao Paulo ABOUT FROST & SULLIVAN Seoul Frost & Sullivan, a global growth consulting company founded in 1961, partners with clients to Shanghai create value through innovative growth strategies. The foundation of this partnership approach is our Growth Partnership Services platform, whereby we provide industry research, marketing Singapore strategies, consulting and training to our clients to help grow their business. A key benefit that Sydney Frost & Sullivan brings to its clients is a global perspective on a broad range of industries, markets, technologies, econometrics, and demographics. With a client list that includes Global Tokyo 1000 companies, emerging companies, as well as the investment community, Frost & Sullivan has Toronto evolved into one of the premier growth consulting companies in the world.

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