Liberty to buy NTL and spend €400m upgrading

bk

Liberty Global (UPC) has gotten the go ahead from the minister to buy NTL:ireland.

http://www.rte.ie/business/2005/1205/ntl.html

Liberty also plans on spending €400 million to upgrade the network for voice, video and BB:

The deal means Liberty can now invest up to €400m on upgrading its services. It plans to offer television, telephone and broadband over the same pipe which currently carries TV signals into homes.

More here:
http://www.irishexaminer.com/pport/web/business/Full_Story/did-sgW9QUeKtLnrQsg0aewFBADppk.asp

Solair

well it's going to be a case of do or die. If they don't invest sky will take 90% of the market and there'll be satellite dishes like mushrooms everywhere.

Neither NTL nor chorus currently offer anything that's truely different and have spent far too long relying on their UK Terrestrial channel monopoly to do anything about it.

bk

Solair wrote:

Neither NTL nor chorus currently offer anything that's truely different and have spent far too long relying on their UK Terrestrial channel monopoly to do anything about it.

You are right about Chorus, it has suffered very badly at the hands of Sky, people in Cork have been leaving in very high numbers for Sky.

However NTL:Ireland has faired much better, it actually has the lowest churn rate in Europe, with one of the highest uptake rates in Europe.

What is the difference?

Well NTL analogue service isn't encrypted, therefore it can be wathched on as many TV's and VCR's as you like, without any extra cost. This makes it very good value for money compared to Sky, which cost €15 per month for each extra room. Also extra NTL digital boxes are only €5.

On the other hand Chorus run a crappy form of scrambling over it's analogue service, so you need to get an extra box and subscription for each room. Since it costs roughly the same as Sky, but offers far less channels, obviously people have been leaving in massive numbers for Sky.

However I still agree with you that UPC will have to get it's act together, improve the network and the products and service they offer. Lots of new competitiors are starting to come including the new BBC/ITV freesat platform, IPTV over DSL and maybe even DTT eventually.

The ironic thing is with the right investment, cable could easily become the biggest player in the Irish comms market with the most interesting products.

dub45

bk wrote:

You are right about Chorus, it has suffered very badly at the hands of Sky, people in Cork have been leaving in very high numbers for Sky.

..........................................

However I still agree with you that UPC will have to get it's act together, improve the network and the products and service they offer. Lots of new competitiors are starting to come including the new BBC/ITV freesat platform, IPTV over DSL and maybe even DTT eventually.

The ironic thing is with the right investment, cable could easily become the biggest player in the Irish comms market with the most interesting products.

How good/bad is the network and whats a realistic time frame for an overall upgrade?

I wonder how big a market (or how attractive it is as part of a package) there is for really fast broadband?

Solair

It would be very difficult to even guess how much work would have to be done. This company has formed from umpteen previous mergers and there are some serious differences in the quality of the networks they're operating over.

Some parts of the ex Cablelink network are quite well upgraded, others e.g. try around parts of Ranelagh, are in a terrible state.

The same goes for the ex Cork Multichannel networks.. various upgrade projects were started but never completed so parts of the Cork network are quite good other parts are in dire need of upgrading.

As for the rest of the cable network, who knows!

I'd say the first thing you'll see is Chrous' cable operations (e.g. Cork city etc) being merged into the larger and more commercially sucessful operation in Dublin/Waterford and Galway.. i.e. offering 15 or so basic unencrypted channels + a broad range digital top up.

Chorus made the mistake of adopting a one-size fits all approach for Chorus Digital. The service available on cable is a mirror of the 60 channel line up on MMDS. While this makes sense from the providers point of view in terms of costs etc.. it makes their cable product unattractive and doesn't make use of the bandwidth available on the cable network.

The Chrous digital 60 channel line up would be ideally suited to all MMDS customers.

Both comapnies use "OpenTV" based set top boxes so you'll probabally see a common platform and EPG appearing across all of their digital services very quickly.


Chorus had a few short lived cable telephony and broadband trials in Cork with very limited numbers of customers. NTL has had similar experience with cable telephony in Dublin. UPC on the other hand, has been extremely sucessful with tripple play type packages in their other territories in Europe, so I see no reason why they won't plough ahead with rolling out broadband and telephony quite rapidly.

On top of that, from the perspective of a new player with its own infrastructure, the Irish market is a potentially huge growth market. It's young, vibrant, very wealthy and has a totally underdeveloped ISP / Broadband market. Eircom's pathetic roll out of broadband, all of the delays, the poor market penetration has just left the door open for another player to come in and take a very large chunk of eircom's potential customers. In many ways, the Irish wireline/cable telecommunications market today resembles that of other European countries in the late 1990s to about 2001. We still have huge growth potential.

If UPC get this right, they could end up wiping the floor with eircom. Whatever happens, a few hundred million being injected into cable infrastructure will have a very positive impact on the telcommunications market here. The underperformance of the irish cable industry and its lack of telecommunication products has been one of the key factors that was missing in the market here. The threat of cable modems / cable phones in the uk drove BT to roll out DSL. Don't forget that cable modems predate DSL in most markets.

bk

Solair, I agree with pretty much everything you said above. Just to add a few things:

UPC has been very busy in the Corus cable areas over the last 9 months or so upgrading.

UPC supposedly have announced that $200 million is to be spent replacing all coaxial trunk with fibre and upgrading all cable into homes with cable capable of carrying signals up to 850 MHz. This would make for an excellent, high quality, network, equal to anything in Europe and could easily carry far more analogue and digital channels, as well as BB, phone and VoD services.

The prove is already starting to be seen in Cork, a friend from Cork has just signed up for 3m/512k BB for €40 a month from Chorus, they are installing it next Monday. It is also available in my parents home in Cork. You couldn't get BB in either of those areas just 6 months ago.

I think it would be a great idea if they got rid of the cryptovision scrambling from the analogue service in Chorus areas, but I'd say it is unlikely It is more likely that they will drop analogue all together, introduce a two tier digital service, a basic package selection at the same price as the analogue service and a more expensive 100+ channel service. They'll probably also reduce the price of multi-room to €5 like in NTL areas.

For MMDS it is interesting to note that NTL dropped the analogue service from its MMDS service, I wouldn't be surprised if the same happens in Chorus areas and then perhaps increase the number of channels.

BTW UPC have already said that they plan on having the same packages and prices across the network, so I assume that Chorus will have to offer the same number of channels as NTL, rather then vice versa.

I certainly expect a phone service to be launched in the next few months.

In the NTL areas, all of Galway and Waterford have already been upgraded and it would seem about 50% of Dublin. If you look on the BB forum, you can see a very definite rise in the number of threads and posts about NTL and lots of new areas being upgraded, so things certainly seem to be improving.

I also agree, that we the right investment, UPC could easily have the second largest communications network in Ireland and could really give Eircom a run for its money.

bk

dub45 wrote:

How good/bad is the network and whats a realistic time frame for an overall upgrade?

The Chorus network was dire, is was mostly a coaxial trunk with very little fibre backbone, no chance of carrying any BB over it or many digital TV channels.

I believe since UPC bought it about 12 months ago that there has been a very large upgrade going on quietly, to install a fibre backbone and improve the coaxial quality. It seems that cable BB is starting to become widely avaialble in Cork, I'm not sure about other counties, but it is a very good sign as it most be a modern Fibre-Coaxial network to carry BB.

dub45 wrote:

I wonder how big a market (or how attractive it is as part of a package) there is for really fast broadband?

Well in the NTL areas, where NTL has upgraded an area to carry BB, they typically get a 10 - 12% uptake. This is a very good uptake rate, specially when you consider that they don't advertise on TV, they only send you flyers, their uptake rate is about the same or higher then Eircom who spends a fortune on national advertising.

The Irish BB market is very attractive, you see because of Eircoms short sightedness in not rolling out affordable BB quicker, it is still a very immature market in Ireland and it still hasn't gone mainstream. That makes it much easier for UPC to take lots of new customers who are only signing up for BB for the first time, rather then having to try to take customers from an incumbent in a mature market which is much harder.

BB is also a very attractive part of the package, you see once you have a network that can carry BB, it is very cheap to run. For instance NTL's entry level 1mb product costs €25, you can bet NTL is making a profit on that, yet it costs them hardly nothing extra to offer 3m, so the extra €20 you pay is almost complete profit.

NTL:Ireland has being losing analogue customers at a rate of about 7%, however they have actually increased the amount of money they make through converting anaolgue customer to digital and BB sign-ups. This shows just how important these extra services are to cable companies.

The thing I really like about Liberty Global, is that unlike the buyers of Eircom, they don't seem to be the type of company to buy networks just to strip them of all their assets. If you look at their other acquisitions across Europe, they usually spend a lot of money investing in the network and building a long term business.

Sponge Bob

The interesting difference as I see it is that Chorus allow naked BB from €19.95 a month for 512k while NTL (currently) only allow you to take BB along with a TV package . Chorus will discount the BB if you take a TV package in the same bundle.

Also note that SKY have segmented their base packages with this pick and mix stuff where you can take 2 out of 6 bundles or packs for about €22 a month, no fone required either I hear . This would indicate that SKY see the cablecos as a serious competitor which they usen't until recently.

By the time the dust settles in the spring you will be able to get BB + Basic Digital TV for about €40 a month which is what Eircom charge for basic BB alone (not including line rental) and will be able to divide the busines between SKY and Chorus / NTL too.

bk

Sponge Bob wrote:

The interesting difference as I see it is that Chorus allow naked BB from €19.95 a month for 512k while NTL (currently) only allow you to take BB along with a TV package . Chorus will discount the BB if you take a TV package in the same bundle.

Yes, that is because analogue TV on the Chorus network is scrambled, so you can't watch it without a subscription. In NTL areas, it isn't scrambled, so if a cable is entering your house, you can potentially watch the TV service without paying for it. If NTL offered naked BB, then people would just sign up for BB, not pay for TV, but still watch it. So it is pretty fair IMHO.

BTW when I signed up for BB from NTL, they actually gave me the analogue TV service free for 12 months

Solair

It's absolutely impossible to generalise about the state of Chorus' cable networks as they're all inherited from various other companies and in various states of upgrade.

The Cork fiber laying project started several years ago before the Chorus brandname even came into being. Unfortunately, Irish Multichannel and Chorus never had the funds to complete the project.

You may have noticed a lot of activity where new duct work and other infrastructure was layed in about 2000 / 2001 right around Cork City.
The job was never finished, but the core infrastructure and ducting is in place so all UPC have to do is finish the job.

Cork's cable network is also pretty extensive although, there were some lazy options taken where MMDS was used in suburban areas which was utterly ridiculous. I hope that these little zones of cable free urban landscape are cabled up as soon as possible.

As for MMDS, Chorus has a vast number of cells to convert to digital compared to NTL who had a much smaller MMDS franchise area.
I don't think the channel capacity will be substantially impacted upon when full digitalisation is completed. Without moving to a more advanced codec than MPEG2 (DVB-T standards) they can't hope to squeeze more than about 60 channels into their multiplexes. It would be possible using different technology e.g. perhaps MPEG4, but that would require new receivers and change over would be far from seamless. Unless it's possible to upload new software to their existing boxes to handle a new and more efficient codec.

bk

Solair wrote:

I don't think the channel capacity will be substantially impacted upon when full digitalisation is completed. Without moving to a more advanced codec than MPEG2 (DVB-T standards) they can't hope to squeeze more than about 60 channels into their multiplexes. It would be possible using different technology e.g. perhaps MPEG4, but that would require new receivers and change over would be far from seamless. Unless it's possible to upload new software to their existing boxes to handle a new and more efficient codec.

I don't have an indepth knowledge of MMDS, but that doesn't seem correct to me.

In cable each analogue channel takes 8MHz of radio spectrum. With MPEG2 encoding you can fit about 10 to 12 channels in the same 8MHz of bandwidth, depending on encoding quality.

Basically 8MHz of radio spectrum can deliver about 50Mb/s of bandwidth, using MPEG2 you can encode a standard definition TV channels with about 3-4MHz, so that is about 12 channels or so.

Now MMDS I believe has 186MHz of radio spectrum available to it, now this is 23.25 8MHz channels. At the moment I believe Chorus use 15 channels for analogue and I assume the remaining 8 channels are used to carry the 60 digital channels. Going on these numbers, if you got rid of the analogue channels you could potentially carry an extra 115 channels, for a total of about 175 channels. Of course you have to worry about intereference and separation etc. but 120 digital channels should be possible with the available frequency.

BTW I believe both Chorus and NTL use DVB-C, rather then DVB-T which is actually DTT.

Please correct me if I'm wrong, my knowledge of MMDS is relevantly weak.

BTW interestingly the EuroDOCSIS standard (the standard used for BB on cable) has also been used on MMDS, so UPC could potentially deliver BB over MMDS. However they would definitely need to turn off the analogue channels and it wouldn't have as much bandwidth as cable based BB.

BBTW interesingly according to some ComReg docs MMDS services were meant to cease on January 1st, 2005!!!

JohnC.

I assume that if BB was ever to be offered over MMDS, a phone line (or similar) would still be needed for the upstream? Which would limit the upload speed too.

Sponge Bob

bk wrote:

Now MMDS I believe has 186MHz of radio spectrum available to it.

BBTW interesingly according to some ComReg docs MMDS services were meant to cease on January 1st, 2005!!!

Comreg took 100 Mhz of the 186Mhz off Chorus/NTL in June last year and parked it for 3g expansion use. They must now make do with 86Mhz so NTL turned off analogue MMDS immediately.

I suspect the cease date for the remaining chunk (2.6-2.7 Ghz range) is end 2008 now but at the current rate RTE will only have about 10% of the country covered with DTT signal by then

Duiske

Sponge Bob wrote:

Comreg took 100 Mhz of the 186Mhz off Chorus/NTL in June last year and parked it for 3g expansion use.

Will that have any effect on their roll-out of Cable broadband, namely in Naas and Carlow, which is behind schedule anyway ?

Sponge Bob

No effect. Carlow Limerick Athlone and Castlebar are not even being worked on , they are doing Cork and Naas at the moment .

bk

Sponge Bob wrote:

Comreg took 100 Mhz of the 186Mhz off Chorus/NTL in June last year and parked it for 3g expansion use.

Sigh, Comreg are such muppets, I mean 3G is such a better use of this spectrum :rolleyes:

Sponge Bob wrote:

I suspect the cease date for the remaining chunk (2.6-2.7 Ghz range) is end 2008 now but at the current rate RTE will only have about 10% of the country covered with DTT signal by then

In fairness to RTE, they have been wanting to rollout DTT for a long time now. It is the government who said that they couldn't, that it had to go up for contract and was therefore massively delayed, muppets.

BTW RTE aren't in the final running to manage the DTT transmission in Ireland, 6 companies have been shortlisted, interestingly including Chorus (UPC) and BT Ireland. Chorus and BT Ireland have already won the network part of the contract.

Actually this might make Digiweb with it's 3.5GHz license, cable standard DOCSIS technology and its IPTV over wireless technology next year, an interesting take over proposition for UPC.

watty

Solair wrote:

It would be very difficult to even guess how much work would have to be done. This company has formed from umpteen previous mergers and there are some serious differences in the quality of the networks they're operating over.

Some parts of the ex Cablelink network are quite well upgraded, others e.g. try around parts of Ranelagh, are in a terrible state.

The same goes for the ex Cork Multichannel networks.. various upgrade projects were started but never completed so parts of the Cork network are quite good other parts are in dire need of upgrading.

As for the rest of the cable network, who knows!

I'd say the first thing you'll see is Chrous' cable operations (e.g. Cork city etc) being merged into the larger and more commercially sucessful operation in Dublin/Waterford and Galway.. i.e. offering 15 or so basic unencrypted channels + a broad range digital top up.

Chorus made the mistake of adopting a one-size fits all approach for Chorus Digital. The service available on cable is a mirror of the 60 channel line up on MMDS. While this makes sense from the providers point of view in terms of costs etc.. it makes their cable product unattractive and doesn't make use of the bandwidth available on the cable network.

The Chrous digital 60 channel line up would be ideally suited to all MMDS customers.

SNIPP

.

Actually the Chorus MMDS will support 120 channels if they switch off the dreadfull analog MMDS.

All the cable networks are very poor for running phone, broadband and 120 ch TV which is minimum for success. It could even be a lot of Chorus cable can't do much more than the MMDS!

Any analog cable I have ever seen in Dublin or Limerick (NTL & Chorus) I would rate as unwatchable.

watty

Kahless wrote:

I assume that if BB was ever to be offered over MMDS, a phone line (or similar) would still be needed for the upstream? Which would limit the upload speed too.

Chorus has had both two way wireless broadband and wireless phone in past. The blew it.

8MHz = 10 Channels??? Only if webcam quality. More like 4 channels at decent bit rate. Mind you I think that is close to quality Chorus is using for MMDS Digital which may explain why it is poor quality compred with BBC on Sky Digital. Each Satellite "Transponder" is about 30MHz.

paulm17781

watty wrote:

Any analog cable I have ever seen in Dublin or Limerick (NTL & Chorus) I would rate as unwatchable.

Either you set your standard to high or you have very limited exposure. Either way it is a rediculous statement.

kaizersoze

paulm17781 wrote:

Either you set your standard to high or you have very limited exposure. Either way it is a rediculous statement.

Not as rediculous as you might think.
I had Chorus cable up to a month ago but I got Sky in because when it didn't die completely (and that was regular) it was unwatchable. 18 of the 22 houses in my estate have since gotten rid of it for Sky Digital. If fact alot af people in the town have got rid of it for the same reason.
My estate is only 5 years old and the cables are newer than that so it's not a cable problem, it's just the rest of the cables in town are in such a bad state.
My wifes cousin has a cable business and works under contract for Chorus. He has told me that the state of the network here (and in Athlone and in other places) is unbelieveably bad. To make matters worse, they are still laying the old co-ax cable in new estates
BTW my father and brother have Chorus MMDS and it's also unwatchable. Both are getting Sky Digital in the new year after seeing the picture quality I have on it.

Solair

If ComReg had any sense what they would do is get UPC involved in DTT in exchange for abandoning MMDS completely.

i.e. RTE, TG4, TnaG and any other "public service" operators could provide a freeview type basic package and the content that is currently carried on MMDS could be moved to a "top up tv" style group of multiplexes that were available by subscription to UPC.

The only exception to this would be that I would franchise the "top up tv" to someone else in the cabled areas. There's no point in having 2 x UPC products in the same area. So, urban areas of counties Dublin, Cork, Galway, Limerick, Waterford, etc would have another company providing the top up tv service.

The advantages:

For UPC: They get to abandon a very patchy, poor quality microwave system that can't really provide full coverage in favour of a nationwide UHF service.

The advantages for RTE/the "freeview style system"
They get a chunk of UPCs money to invest into the DTT system.
They would also get a large number of existing MMDS viewers instantly giving the DTT platform customers. There is also an existing stock of MMDS installers and technicians who could easily provide support and installation for a future DTT platform. Also, UPC could have to provide call centre / admin / software support for the new system.

The advantages for other operators / ComReg:
MMDS frequencies are freed up for more appropriate modern usage i.e. 3G services.

There's even a posibility that the existing Chorus/NTL and future UPC set top boxes could handle DTT quite easily with a simple retune and change of antenna / downconverter and a software update. They're basically DTT receivers anyway.

While I know this might sound a tad anti-compeditive. The alternative scenario is a weakend irish cable industry, DTT never happens properly and Sky takes 90%+ of the market.

paulm17781

kaizersoze wrote:

Not as rediculous as you might think.
<snip>

Well I have little exposure to Chorus however I have been around NTL Basic cable my whole life and it has always been perfectly watchable.

Solair

I'd agree with that. If you have a Widescreen / home cinema equipment etc you might as well write chorus cable off in cork anyway.

The anlaogue service was good by 1985 standards.

There's no nicam, the picture quality is highly variable, the scrambling system's aweful etc etc.

Although, that being said, I've used analogue cable tv in Boston recently and it also had the same Jerrold decoders and the picture quality over there was dire too.

and I've NTL analogue in Dublin (Ranelagh) and the picture quality's absoltely terrible. I don't even know why I bother to pay them for it to be quite honest. Channel 4 is often completely unwatchable. I asked about digital and broadband options and were told that neither were avaialble on my street due to "line faults"... that was 5 months ago.

Blaster99

What's up with Channel 4 on NTL incindently? On basic cable I can watch everything else perfectly fine.

Sponge Bob

channel 4 is 'the last' (highest frequency on cable) channel is what I heard . Older cable does not have the bandwidth that newer cable has and is wheezing at that frequency.

crawler

Blaster99 wrote:

What's up with Channel 4 on NTL incindently? On basic cable I can watch everything else perfectly fine.

Frequency allocation for C4 can be funny at times on analogue in certain areas....

Sponge Bob

crawler wrote:

Frequency allocation for C4 can be funny at times on analogue in certain areas....

'funny' is it ???? not if SWMBO is a Big Brother fan its not 'funny'

Solair wrote:

If ComReg had any sense what they would do is get UPC involved in DTT in exchange for abandoning MMDS completely.

That would require vision and imagination over inb Comreg so it simply won't happen. Now if UPC came in here and posted a 'vision' thing for their masts ...involving DTT and BB relaying and really really useful stuff then we could all help to synthesise a framework policy that leverages the fabulous mast system currently in place to provide MMDS and imminently threatened with redundancy by the spectrum deallocation in 2008 .

bk

watty wrote:

8MHz = 10 Channels??? Only if webcam quality. More like 4 channels at decent bit rate. Mind you I think that is close to quality Chorus is using for MMDS Digital which may explain why it is poor quality compred with BBC on Sky Digital. Each Satellite "Transponder" is about 30MHz.

Crawler can probably correct me on this, but on cable you can fit 50Mb/s of bandwidth into 8MHz, if you had 12 channels, that would be over 4Mb/s for each channel. That is quite good quality, a DVD is about 4 - 6Mb/s. Now I assume since we are talking about wireless, which suffers from interference etc, you probably have to have a much lower QAM and therefore have less bandwidth available. But you should definitely be able to get more then 4 channels.

About quality of Chorus analogue service, yes it is awful, I believe a lot of the problem is with the scrambling technology they use which means it can't carry Nicam etc.

About NTL analogue quality, it is fine, better then terrestial, with the exception of Discovery Channel, C4 and E4, this is because these three channels are down in the crappy VHF Band 1 frequency range, which really isn't a good idea for transmission. In newer cable areas NTL seems to be transmitting these channels a second time in the greater then 500MHz UHF frequency which is much better, you can find the frequency charts here:
http://www.ntl.ie/athome/frequency.html

I haven't used Chorus Digital, but NTL digital is actually quiet good, I do have one or two complaints about the boxes, but for the most part it is fine. The PQ isn't quiet as good as Sky, but really it is very close and better value for money IMO.

About UPC and DTT, Chorus (UPC) have won part of the contract for the network element and are currently short listed with 5 other companies to win the contract to run the DTT transmission network, so UPC are heavily involved in DTT.

Personally I'd prefer for their to be a completely free DTT system like Freeview in the UK. Yes I know Topup TV is in the UK, but it is a failure and it is expected to go completely free next year when contracts end. Freeview has driven a lot of competition and innovation in the UK market. It is the main reason why Sky and the cable companies are pushing BB, voice, VoD and HD so hard in the UK now. It would be nice if the same happened here.

crawler

bk wrote:

Crawler can probably correct me on this, but on cable you can fit 50Mb/s of bandwidth into 8MHz, if you had 12 channels, that would be over 4Mb/s for each channel. That is quite good quality, a DVD is about 4 - 6Mb/s. Now I assume since we are talking about wireless, which suffers from interference etc, you probably have to have a much lower QAM and therefore have less bandwidth available. But you should definitely be able to get more then 4 channels..

About that (not just on cable but on wireless also, capacity is capacity regardless of medium) - 50Mb/s would be a total fig - more like 42Mb/s that can be used (overheads). however you are assuming that they are using IP for transmission, which they are not...they use MPEG-2 which is not that efficient as a transmission...

New DTT and IP based portfilios will not usually use MPEG-2

Solair

In an Irish context, TopUp TV would probabally contain the UK terrestrial channels as BBC requires royalty payments for carriage outside of the uk.

So, unlike in the UK, it would probabally be more commercially sucessful.

Freeview could contain RTE, TV3 and other irish channels along with commercial uk channels interested in going free-to-air.