Teleste at IBC 2011: OTT - Golden Opportunity to Become a Central Hub for All Content

AMSTERDAM, September 6, 2011 -

IBC — At the IBC 2011 conference, Teleste, a leading technology provider of broadband video and service platforms, will showcase solutions and concepts that enable Cable operators to combine Over-The-Top delivery (OTT) services to their existing DVB/IPTV networks. IBC 2011 takes place in Amsterdam from the 9th to 13th of September 2011. Teleste welcomes you to learn more and visit us at our stand 5.C36 in hall 5.

At IBC, we are focusing on:

• Teleste MyCast multi-screen service platform and the Teleste Luminato distribution headend for cable TV and IPTV delivery. Teleste is equipped to deliver a hybrid DVB/IPTV/OTT solution that will enable you to retain and grow your customer base.

• We are also delighted to announce that our new AC9000 intelligent fibre optic node has been added to the CSI 2011 Product of the Year Award’s shortlist. The final results of the CSI 2011 Awards will be announced at IBC 2011.

OTT - Best Thing Since Invention of Copper

The world of video delivery is changing fast: IPTV and DVB now have a new bold competitor in Over-The-Top delivery (OTT) where TV and movies are transmitted to television sets through the public internet. OTT is radically changing the value chain - content owners now have a direct connection to consumers.

This has raised questions on the future role of European cable TV operators. The threat is that their role will be relegated to only offering capacity while someone else gathers the revenue from interactive on-demand services. The problem is that consumers can use any IP network to view TV movies through OTT on their television sets and pay for the programming directly to content owners. We at Teleste see that while OTT poses a threat to Cable operators, it is also a huge opportunity for those operators who are ready to embrace the change.

OTT is delivering what IPTV promised - high quality and interactive television services through IP connections. The main difference between OTT and IPTV is openness: OTT is open and flexible whereas IPTV is inherently a closed system. IPTV also takes away the freedom of choice from consumers. It seems like the customers have voted and rapidly taken up OTT services.

Today, there are close to 100 million household using OTT services. That number is expected to almost triple to 285 million users by 2016 (TDG). It’s not all fun and games for OTT either. Bandwidth is and will in the future become even more a bottleneck for services. 3D TV and upcoming ultra HDTV require such high bandwidth that IP delivery networks will become a limitation.

What strategy should European cable TV operators adopt? The future will not be black and white. Fact is that linear TV broadcasts are best suited for traditional DVB delivery.  Fact is that OTT offers such ease-of-use, interactivity, cost and variety that consumers will find hard to resist. Why not have the best of both worlds?

Killer cocktail instead of killer app

For cable operators, there are two possible strategies to tackle this change: close eyes and pretend that nothing has happened or see the change as an opportunity and innovate to grab a larger share of the customer’s wallet. The question is not about inventing a killer application, but a killer cocktail. And we believe that this killer cocktail consists of DVB for traditional TV and OTT/IP delivery for other interactive services. Cable is best for high bandwidth TV services and OTT/IP delivery is best for interactive services. The winners will be those who are able to adjust and offer both cable and OTT delivery. Operators not embracing this opportunity are missing a potential revenue stream and alienating customers.

We feel that European cable TV operators are ideally positioned to provide consumers both traditional broadcast and OTT services on a market that is splintered along country, language, technology and historical lines because they have two very valuable assets - bandwidth and consumer’s trust. Cable networks have the bandwidth to handle all existing and upcoming TV services. Customers have for years trusted the operators for quality and monthly billing relations. We believe that customers will always appreciate the same things that made cable TV operators strong in the first place: good quality HD video, a wide range of channels, central billing, and most importantly, ease of use.

What European cable operators need to complement their offering with OTT is a service platform that will enable them to easily integrate OTT services with cable TV networks. The platforms and solutions are available today and combining OTT to Cable TV offering is very much a reality. The winners will be the operators who have the wisdom and foresight to combine the best from both worlds.

About Teleste

Teleste is an international technology group founded in 1954, which is specialised in broadband video and data communication systems and services. The group is active in two business segments, Video and Broadband Solutions and Network Services; in both fields, we are among the global leaders. Video and Broadband Solutions business segment has the emphasis on product solutions for broadband access networks, video service platforms and video surveillance applications. Network Services segment deliver comprehensive network service solutions including new construction, rebuilding, upgrading, planning and maintenance services of cable networks. In 2010 the group’s net sales totalled EUR 167,8 million and the group employed 1230 persons at the year-end. The company has approximately 30 offices world-wide and over 90% of Teleste’s net sales are generated outside Finland. The company is listed on the NASDAQ OMX Helsinki Ltd. www.teleste.com.

Press materials can be downloaded from www.teleste.com/ibc

Mika Kavanti, Business Director, Video solutions, +358505871104, mika.kavanti at teleste.com