Tuesday, June 20, 2006

IPTV Case Study: Chunghwa Telecom

Chunghwa Telecom is the largest telecommunication service provider in Chinese Taipei.
It provides a full portfolio of services including local, long distance phony, wireless, Internet access, broadband networking, satellite communication and multimedia broadband. Chunghwa Telecom had dominated the telecommunications services market for over 50 years until 2000 when the Chinese Taipei government decided to open up fixed network market. However, Chunghwa Telecom is still the leader in the broadband market. Chunghwa Telecom has 12 million local phone subscribers and more than 3 million ADSL subscribers which possess 81.74% of the ADSL market in Chinese Taipei. Most other ISPs even have to use Chunghwa Telecom’s last-mile wires in providing ADSL service.

Chunghwa Telecom was the first to get the IPTV license in 2003. Based on its broadband platform, Chunghwa Telecom has poured huge amount of money into video market. Chunghwa Telecom invested 190 million NT dollars into IPTV. Chunghwa Telecom got the operator’s license in 2003. In cooperation with Acer Computer Company and Alcatel, the company launched Multimedia on Demand (MOD) service which was very similar to regular TV service. Chunghwa Telecom signed a contract with Alcatel in June 2005viii. Alcatel will supply 870 thousand ADSL2 plus lines for the delivery of higher-bandwidth broadband services across Chinese Taipei. It helps Chunghwa Telecom in providing a flexible and reliable platform to carry MOD service.

MOD is based on MPEG-2 compression technology. The compressed signals will then be sent over ADSL lines. Since most television sets in Chinese Taipei still can only display analog signals, a set-top box must be installed to convert digital signals into traditional analog signals. Subscribers can then choose programs from traditional television sets. In terms of content, MOD focuses on the diversity of entertainment programming. MOD service includes both regular television channels and video-on-demand. In the beginning, Chunghwa Telecom carries five free-to-air television stations and video-on demand service. Five free-to-air television stations include TTV and CTV with 16 basic channels such as Hakka TV, CTS's educational channel, Da-Ai TV, BLTV, Australia's ABC, and news, sport, drama and shows made by CTS. The video-on-demand service contains education, real-time information, stock information, travel, shopping and movie stations.
Audiences can enjoy the benefit of multimedia interactivity. In order to attract consumers’ attention, Chunghwa Telecom offers a series of promotional packages. With sufficient financial resources, Chunghwa Telecom provides a competitive package includes a free set-top box, free installation, and free for the basic channels in the first six months. Chunghwa Telecom had signed up more than 30,000 IPTV subscribers in the first month and had more than 200,000 subscribers within its first six months of operation. With a series of promotion, Chunghwa Telecom reached the goal of the first step. In the future, the goal of Chunghwa Telecom is to reach 1.5 million IPTV subscribers over the next 5 years.

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