Thomas Staneker is the Head of Deutsche Telekom’s European TV Technology Service Center, which is based in Budapest. The TV Technology Center plans and builds TV solutions for DT’s subsidiaries in Central and Eastern Europe. Thomas has more than 20 years of experience at Alcatel from various positions in R&D, International Product Management and Worldwide Product Marketing. He joined Deutsche Telekom in 2005.
What is Deutsche Telekom’s overall ambition and how do you see their TV offering evolving going forward?
Our ambition is to increase the efficiency in how we deliver TV services to all our customers across every country. We do this by establishing a central service center based in Budapest for TV delivery. In this way we can not only deliver TV services at a lower cost, but also share best practices and innovations across countries.
We come from a very fragmented history. Our Central and Eastern European footprint now includes 12 different countries, 7 of which are countries where we have integrated fixed and mobile networks. In those countries we are operating as TV providers and offer IPTV, Satellite and Cable, or a mix of the above depending on the market conditions.
Historically all markets sourced and bought their own solutions separately and deployed these with different speed and at different times. And in some cases DT has invested in operations, like for example in OTE in Greece. Therefore the technology landscape has been very fragmented and everyone has a different range of STBs, which is obviously not the most commercially sound business model. So our ambition now is to consolidate both our offering and our technology across all markets and to become more efficient in the way we develop, launch and maintain our services.
And what is the role of DT’s shared service center in accomplishing this?
The Shared Service Center for TV was created in 2013 for the specific reason to drive the consolidation of services across all markets. The overall purpose was to increase efficiency in the way we deliver TV services to our customers and create a standardized solution for all delivery technologies.
We wanted to buy things cheaper through economies of scale and to be more efficient when deploying new services. We have collected requirements for all 7 countries, standardized the APIs to be able to get best-of-breed solutions and consolidated all operating and maintenance services.
Another reason for doing this is that DT now is able to directly leverage their position by sharing best and worse practices across different markets. A service that has been proven successful in one country can quickly and easily be launched in every market. Because of this we can be highly innovative even in very cost sensitive markets.
How do you see the role of set-top boxes evolving over the next 5-10 years?
Well, while the death of the STB was announced more than 10 years ago now, we still see the total global numbers growing significantly. On the other hand, video-capable devices with direct Internet access are also on the rise.
However, I think that this will first lead to a consolidation of the STB market. The current weakness of the euro compared to the US dollar will most likely accelerate this process. This consolidation will be then be followed by a technical consolidation with more diverse features such as the connected home.
Still, it is important to acknowledge that the STB solves one very important problem. It is the link between the very standardized TV set, and the customized TV operator product with different back end and security solutions, and that need remains. So, very long term, it is true that the STB in its current form might disappear, but only to be substituted by other, more elaborate, consumer devices that merge mobile and fixed line technologies.
What is your view regarding OTT and Internet TV services – complementary or competitive?
For me OTT is a term used to describe both a technology, what we call “non carrier grade” and a business model “access-independent TV”. In this context, telecom service providers are able to use the technology to both lower distribution cost and extend their reach to new customer segments. OTT technology is definitely an enrichment of the telecom world and will most likely continue to take market shares in terms of distribution method.
The OTT business model does mean a certain disruption to entrenched, subscription based, so called “access-near” models. And while OTT might be a threat for traditional single service TV distributors, the multiservice providers, who might also offer mobile services, can actually benefit from an OTT distribution business model.
Why is an independent OS so beneficial for multinational operators such as Deutsche Telekom?
Well, as I mentioned above, an independent OS is crucial for us as it enables us to act on our overall ambitions for our TV offering that I outlined above. After years of deploying first generation integrated TV platforms, our highest priority is now to consolidating our offering across our markets and implementing more open platforms. A very important part in achieving this is the so-called “decoupling”, which means independent sourcing and deployment of network/server side platforms and STB/device client software.
A STB client OS that is widely distributed amongst operators and pre-integrated with numerous devices gives us the freedom to choose which vendors we want for the hardware/STB and it doesn’t lock us in to using the same supplier for the next round of sourcing and deployment. Hence, it is in DT’s best interest to support an OS that allows a wide choice of devices connected to different platforms.
What is your experience with the capabilities of Zenterio OS?
Zenterio OS has proven to be a well-thought, reliable product that delivers on its high promises. We have tried and tested Zenterio OS in the labs, in field trials and in commercial deployments and we have yet to find a case where it would not work stable. Even in quite challenging environments, for example with low performance, hybrid satellite STBs, Zenterio OS provides a solid basis for rendering a cool user experience. The fact that it can also be deployed on legacy devices makes is even more relevant as the different markets where we are active previously did there own sourcing, meaning that the STB environment is very fragmented until those boxes can be replaced.
In addition to the product capabilities of Zenterio OS, Zenterio as a company has a very diverse skill-set and vast experience working with different operators around the globe and is always available to adapt its product to the operators’ needs.
In mature markets, the ARPU has leveled off. What are the potential new revenue sources for TV operators?
For us, as we are first movers in highly competitive pay TV markets and used to deliver premium quality TV in difficult technical and commercial environments, increased revenues will come from an increased number of subscribers as well as from incremental service revenues from current subscribers.
In some of our markets, pay TV is still developing and there is a very basic need from customers to connect to richer premium digital TV services. Based on our premium product offerings and our ability to bundle telecom and Internet services we have a leading position in the race for these new customers. By consolidating our markets we also have the opportunity to take services that has been well received in one market and deploy it in another with very little development or deployment cost.
For more mature markets we see new service areas like gaming and connected home as well as value added services such as targeted interactive advertising, interactive TV applications, social recommendations and customization as ways to generate new revenue streams. Personally I do not believe in the idea of a killer application, it will rather be a blend of services that generate incremental revenues.
Read more about DT’s outsourcing of TV operations:
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