General

SaskTel's Max IPTV Service — continued

The future of the network
Given its early success, SaskTel is now more strongly committed to IPTV than ever, hence the upgrade from ADSL to ADSL2+. It will boost bandwidth from 8 Mbps to as much as 16 Mbps, allowing the company to deliver more than two separate video streams and introduce HDTV. As Eltom says, "The decision to offer HDTV was a lot easier to make now that we have one in five customers buying the service."

The upgrade involves moving fiber closer to the home and reducing the length of the local loop to an average of about 900 meters. Where one cabinet today might serve 500 homes, three cabinets will serve those same 500 when the ADSL2+ upgrade is complete by first quarter next year. The infrastructure upgrade will pave the way for an almost immediate upgrade to VDSL, which will boost bandwidth by another 50 percent and possibly to as high as 40 Mbps down the road.

Eltom doesn't reveal the cost of developing and building the IPTV system SaskTel uses, or whether that cost is included in the initial $123 million. The company considered turnkey solutions, but there weren't many available six years ago and most were from small untried companies. It also decided it didn't want a proprietary, one-vendor solution with all the risks that entails.

"We probably paid a premium in terms of price with us being the integrator," Eltom says. "But we felt it was the best opportunity to be successful in the long term."

The company had invested in and run cable TV holdings in the UK and New Zealand as far back as the 1970s, so it had some pay TV experience in house. It did not hire a bunch of new talent from cable companies. Existing staff learned as they went along. It took 9 to 12 months to put the system together and get it working reliably enough to support a commercial service.

The components
The SaskTel IPTV system includes "best-of-breed" components, including DSLAMs and line cards from Lucent, DSL modems from Westell, set-top boxes from Pace, middleware from Alcatel, conditional access and encryption software from Widevine, head-end equipment from Harmonics, multi-cast routers from Cisco, and VOD software from Kassena.

Designing and integrating the IPTV system was just part of the learning involved. SaskTel hired a Los Angeles consultant to help it gain knowledge of the TV business and negotiate content agreements. "He helped us work through some of the key business details and get probably the first deal or two done," Eltom says. "Since then our own staff has been handling all of that." SaskTel has individually-negotiated, long-term agreements in place with most major U.S. and Canadian content providers.

"The biggest hurdle," Eltom says, "was figuring out how to integrate a new product like this, one that had its own nuances and demands, how to mesh it in with the way we provide voice services."

That hurdle, however, like most SaskTel encountered, is apparently behind it now. Pioneers, they say, get the arrows. If true, this regional phone company seems to have made a complete recovery. Not only has it secured its defensive position against the cablecos—IPTV has allowed it to go on the offensive and generate significant new revenue.

—End

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