| 04 Mar 2010 |
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Video services to boom locally
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Thursday, Mar 04, 2010
Gulf News
Dubai The Middle East tele-communications market will see a huge growth in video services over the next couple of years, according to Robert McIntyre, chief technology officer for CiscoCisco
's service provider business.
"The Gulf states in particular are poised for the kind of growth we think is going to happen," he said. "The consumers are getting more sophisticated. There is money here to be spent. The networks here are just fantastic."
Video services have become such a major focus that CiscoCisco, one of the largest IT and networking companies in the world with over $36 billion (Dh132.2 billion) in revenue in 2009, now considers it a core strategy, he said, and the Silicon Valley-based company is working with regional telecommunications companies on how to provide those services, which includes video on demand (VoD) and streamed video over the internet, among others.
The company increased its focus on services in the last few years, McIntyre said.
"Our service provider business now, when you add in services, management service and customer support to the products, is over 30 per cent of CiscoCisco."
While McIntyre wouldn't say how much CiscoCisco believes the video market in the Gulf is worth, a report by industry analyst IDC recently estimated the value from sales of set-top boxes, a key component to providing video services.
"The worldwide pay TV digital set-top market is forecast to reach more than 112 million units shipped across the three key segments of cable, satellite, and IPTV in 2013, representing a combined market opportunity of over $12 bullion," market analysis Greg Ireland says in the report.
Good infrastucture
Overall, the Middle East has moved more slowly into digital content delivery than other parts of the world, but its late entry is also providing some benefits, McIntyre said. Many networks in the Middle East are currently working with fibre-optics and 3G, while their western counterparts are currently struggling with legacy systems, industry jargon for older technology that is too difficult or expensive to remove or upgrade.
Those legacy systems haven't done well in the last few years. AT&T was forced to temporarily ban new iPhones onto its network in New York, claiming that the use of video on the popular smart phone was slowing down the network. McIntyre estimates the percentage of video traffic on mobile networks is as high as 75 per cent. By the end of 2012, the figure is expected to rise to 90 per cent.
IDC estimates that worldwide telecom markets will spend $104.4 billion by 2013 on telecommunications infrastructure that can support broadband-based services like VoD, cellular data and IPTV.
There are still several issues that local content providers are working to overcome, McIntyre said. One is improving the delivery speed of videos that originate from the US and Europe. He said local content providers are looking to "cache" or temporarily store the video locally to help improve speed.
The second issue is piracy, but he said because of the increase in availability of broadband and processing speeds in set-top boxes, which is comparable to a Pentium 4, content providers are able to provide greater levels of security to safeguard content.
The higher processing power will also allow telcos to provide customised programming and interfaces, as well as include data on what users watch, which will help drive targeted advertising.
By Scott Shuey
© Gulf News 2010. All rights reserved.
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