Creating a New IPTV Business Model for Venezuela's CANTV

CANTV is Venezuela’s largest telecommunications operator, with services encompassing fixed-line, mobile, data, and multimedia. As a state-owned company, CANTV monopolizes 100% of local services and 90% of toll services. By the end of 2008, its broadband subscriber base had reached over 2 million. In August 2006, CANTV initiated its IPTV project with an investment of US400 million dollars. It planned to attract 1.27 million IPTV subscribers between 2009 and 2014. ZTE—thanks to its innovative visual communication solutions and rich experience in IPTV—excelled numerous competitors in 2008 to be selected as CANTV’s exclusive IPTV project partner.

The end-to-end IPTV solution provided by ZTE consists of the Head End, Content Delivery Network (CDN), Middleware, Conditional Access/Digital Rights Management (CA/DRM) System, Set-Top Box (STB), and Network Management System (NMS), as shown in Figure 1.

The first Venezuelan satellite, Venesat-1, was successfully launched from China’s Xichang Satellite Launch Center in October 2008 on a Chinese Long March 3B rocket. It is a communications satellite that can be used for direct broadcast of various media content. CANTV took this opportunity to select 30 movie, news, and sports channels from IPTV programs jointly developed with ZTE for transmission up to Venesat-1. CANTV now offers Direct-To-Home (DTH) TV services to people in remote rural and mountainous areas.

In March 2010, after six months of testing and intense bidding, ZTE also won the bid on CANTV’s DTH project. CANTV will begin to employ ZTE’s outstanding “IPTV+DTH” solution.

ZTE will help CANTV drive business growth in satellite, cable, and terrestrial digital TV based on the IPTV network. The “IPTV+DTH” solution allows the Head End to be reused between the IPTV and DTH systems. CANTV can use a single head-end system to provide IPTV access while extending satellite TV coverage to subscribers throughout the country. The “IPTV+DTH” solution has obvious advantages in cost saving, and unified management and operation. Its structure is shown in Figure 2.

In the DTH project, the same head end will be shared between the IPTV and DTH systems. The effective sharing of content provision is aimed at significantly reducing CANTV’s CAPEX and protecting its initial investment. Moreover, a single service operation and management system will realize unified management of IPTV and DTH subscribers. This will help CANTV facilitate its business management while lowering its TCO.

Another feature of the DTH project is that content will be delivered according to different network access modes and resources. Subscriber distribution and network resources within Venezuela will determine how a proper network access plan is formulated.

In order to meet the different needs of subscribers in cities and remote areas, ZTE will help CANTV build a converged multimedia service center with two network access options: IPTV and DTH. Users will be able to enjoy a rich multimedia life anytime, anywhere, and using various devices (such as TV, mobile phone, or PC).

Stemming from mutual cooperation, ZTE has established a deep friendship with CANTV and the people of Venezuela. In the next six years, CANTV plans to attract 1.27 million broadband IPTV subscribers and 630 thousand satellite TV subscribers using the IPTV+DTH model. ZTE is poised with CANTV to offer rich multimedia lifestyles for the people of Venezuela.

Milestones

■    April 2006: CANTV initiated the IPTV project.

■    October 2008: China launched Venezuela’s first satellite at the Xichang Satellite Launch Center.

■    December 2008: CANTV confirmed ZTE as its exclusive supplier for the IPTV project.

■    January 2009: Venezuela’s Minister of Communications and Information proposed to deliver TV and telephone services to people in remote areas using Venesat-1. This proposal was made during a ceremony for terrestrial satellite stations in Bamari (presided over by President Hugo Chavez).

■    March 2009: CANTV proposed choosing 30 movie, news and sports channels from the IPTV programs and transmit them to Venesat-1. This would provide DTH services to people in remote rural or mountainous areas.

■    August 2009: ZTE completed an end-to-end DTN network trial for CANTV at the terrestrial satellite station in Bamari.

■    March 2010: ZTE was awarded the DTH contract from CANTV after six months of testing and intense bidding.

■    September 2010: The DTH system will be put into commercial use, with a plan to attract 1.27 million broadband IPTV subscribers and 630 thousand satellite TV subscribers within six years.