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Italian Market Snapshot

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Italian Market Snapshot Convergence Evolution of markets and regulation Giovanni Santella AGCOM [email protected] Geneva, June 22-23 2006 Background: Italian Market Snapshot 2 1 Telecommunications market Strong interest for VAS market Mobile market Fixed market 4 mobile operators 27,3 mln fixed access lines 58 mln mobile lines 7,1 mln DSL lines (200.000 fibers) Growing 3G market (10 mln lines end 25 mln internet users 2005, foreseen 17 mln by end 2006) 3 Broadcasting market Pay-TV segment is growing fast Analogue terrestrial market Digital TV platforms 11 national TV broadcasters DTT has a fast growing base of approx 500 local TV broadcasters users 22 mln. TV households telecom incumbent and OLO are getting ready to distribute content over DSL 4 2 TV reception pattern cable DTT (xDSL/FTTH) 15% 2% satellite pay-TV 17% 0nly analog terrestrial 66% 8 mln digital households (34%) Source: Agcom elaboration 5 Roll out of convergent services in Italy 6 3 What’s Convergenze? Different network platforms provide the same service (e.g. FTTH, xDSL, provide fixed multcast video services; DVB-H, MBMS provide mobile unicast and multicast interactive video services ); A single network platform provides different services (e.g. DVB-H net. provides broadcast, multicast, unicast services); Phone, television, computer functionalities on the same terminal (e.g. DVB-H); 7 Digital Terrestrial Television DVB-T frequency utilization in Italy • 48 * 8 MHz channels in UHF bands from 470 to 854 MHz, 6 *8 MHz channels in VHF band from 174 to 223 MHz; • Digital Terrestrial Frequency Plan (PNAF-DVB-T) approved by AGCOM in 2003 • Current digital TV situation different from the approved Frequency Plan due to the coexistence of analog and digital television 8 4 DVB-T Frequency planning hypothesis Given transmitter characteristics Given receiver characteristics Modulation parameters • 64QAM FEC 2/3 (first level planning), 20 Mb/s • 16QAM FEC2/3 (second level planning), 13,3 Mb/s • 8MHz channel Coverage evaluation (95% outage probability: “good” reception) E.m. prediction • National model (“AGCOM White Book”) 9 DVB-T frequency plan (2003) First level planning: 12 national and 6 regional networks (21 regional service areas in the overall). Second level planning: 18 local networks (about 100 local service areas in the overall). Note: planning carried out with 3-SFN architecture, coverage> 80% of national territory (>90% of population) , 260 diffusion sites. 10 5 Current situation of DVB-T • Digital Television and analog TV share the same frequency band (VHF-UHF) • Digital Television introduction is market driven: frequency trading, digital conversion of analog TV systems using the same frequency, same radio TX and antenna, 10 dB EIRP reduction • DTT Contents: new programs + simulcast of some analog channels Analog Station Digital Station Ch. 6 Ch. 7 Ch. 8 Ch. 9 Ch. 10 Ch. 11 Ch. 12 8Mhz 8Mhz 8 Mhz 8 Mhz 8 Mhz 8 Mhz 8 Mhz 11 Digital Terrestrial Television 6 national multiplex covering 60-70% of population approx. 3 ,5mln set-top box sold (mostly MHP) analogue switch off planned for end 2008 27 free to air national programs PPV (10 programs) business model introduced by platform operators is driving penetration (1.6 mln ppv cards distributed) Growing availability of interactive features data carousel: enhanced TV (advanced teletext) return path: cames - instant surveys - Tcommerce, Tlearning - Public utility services 12 6 Channel line-up (1th Q 2005) Network General children News sport Music / other operator entertainment RAI RaiUno RaiNews24 RaiSport RaiEdu1 RaiDue (educational) RaiTre RaiDoc RaiUtile Mediaset Rete4 Ventiquattrore.tv PPV (soccer) Coming Soon PPV (fiction/ other) BBC World VJ TV Class News Telecom Italia La7 PPV (soccer) MTV Media PPV - movies PPV (boxe) MusicBox* D-Free Canale5 La Chaine Info** Sport Italia Boing Radio Italia TV Italia1 (music) Bold: channel/content not previously available on analogue terrestrial 13 Multicast TV over broadband fixed access TV over fixed BB Major player: Fastweb ( FTTH or Fiber-ADSL platforms) triple play offers(200.000 households) TI (75% of ADSL lines) and other competitors (25% of ADSL lines) are launching IP-TV Business models: “double” and “triple play” Acquisition of premium contents monthly subscription + PPV 14 7 Unicast TV on mobile cellular networks Players “3” (UMTS) TIM (GPRS/EDGE/UMTS) Vodafone (GPRS/UMTS) Wind (GPRS) TV and video services “3”: News, Entertainment, Sports, Cartoon, video music TIM: RAI and La7 channels, News, Finance, Entertainment, Sports, Cartoon, music Vodafone: Rai News and Sole 24 Ore channels, Sports, News Wind: News, Movie trailers, wheatear forecast Strategies and business model TV sports rights acquisition and exclusive deals with national broadcasters PPV and pay as you go models (average 30€c/minute) TV on mobile vs. TV for mobile dilemma 15 Impact of convergence on regulation 16 8 a new technological and market context for TV services… Analog scenario Digital scenario Vertical integration content provider/ network operator: unique regulatory regime Fully developed multi-channel and multiplatform environment Limited number of TV channels, dominance of radio VHF-UHF terrestrial Unicast-multicast techn. platform (free to air) increasingly used for delivery of audiovisual services Television services delivered only through broadcasting technologies Alternative business model: pay Dominant business model: licence fee per view, premium fee calls, etc, + advertising On demand, interactive features Exclusive model for offering content: and personalization 17 linear TV … leads to new regulatory challenges New tasks and priorities Redefinition of the TV value chain and identification of separate regulatory regime for network and content Regulation of bottlenecks: access to networks and platforms Foster development of new platform and inter-platform competition Regulating contents distributed through all kind of platform 18 9 Redefinition of value chain structure Digitalization brings to a potential fragmentation of the value chain in the television industry NETWORK CONTENT SERVICE OPERATOR PROVIDER PROVIDER Provides platform Manages the network Editor of the TV and the broadcasting services channels capacity (CAS, EPG; API) Regulatory implications Separate authorization for each role 19 Regulate access to networks Access to networks (fiber, xDSL, satellite, DTT) regulated according to the New Regulatory Framework on electronic networks Market analysis Identification of SMP Remedies DTT: Specific regime justified by scarcity of available frequencies and need to guarantee pluralism Specific obligations imposed to DVB-T network operators. E.g. net. op. with > 1 mux have to provide FTND access to 40% of mux capacity to independent content providers; Obligation, to control non discrimination principle, of structural separation (or separate accounting) of content production activity, transport capacity provision and CAS services provision. 20 10 Regulate access to platform Content and services offered through an electronic network can be received by the final users only through specific platform services: CAS, API and EPG ex ante obligations to platform operators can be imposed without the identification of significant market power (NRF) Conditional Obligation to offer FTND access system conditions to all content provider Separate accounting EPG/ API obligations to providers of EPG and API 21 Foster inter-platform competition Create a level playing field and a correct competitive environment between platforms is essential for a full deployment of the advantages of convergence Competitive issues Different level of vertical integration of the existing platforms SMP of some platfoms in the upstream market (wholesale acquisition of content) Possible regulatory tools: • Obligation to adopt Interoperable platforms (e.g. IP-TV problem) • Application of technological neutrality principle; • Obligation of non discriminatory and transparent access to contents; 22 11 Introduction of mobile TV new standards 23 Audiovisual content on mobile DVB-H , DMB-T standard Technical standards, based on DVB-T and DAB-T, that allows audiovisual contents to be received on mobile terminals through terrestrial frequencies; More efficient than MBMS (UMTS) for multicast; New business opportunities and business models, possible synergies between broadcasters and mobile operators. 24 12 Synergies between broadcasters and mobile operators. 25 Mobile TV standards BANDS FREQUENCIES DMB-T DVB-H, MBMS DVB-H+, DMB-S Europe VHF-III 174-230 MHZ X X UHF-IV, V 470-830 MHZ X BANDA L 1450-1492 MHZ X X UMTS-UL 1920-1980 MHZ X UMTS-DL 2110-2170 MHZ X UMTS-SAT 2170-2200 MHZ X 26 13 Introduction of mobile TV in Italy • Current regulatory situation: DTT network operator broadcasts the contents to fixed receivers in the VHF-UHF band according to the DVB-T standard; • AGCOM has carried out a public consultation on Mobile Television (nov.2005, jan. 2006) and has recently issued a transitory mobile TV regulation; 27 Mobile TV regulation • Previous regulation for content provider, network provider and service provider applies to mobile TV (independently of the adopted standard); • The DTT network operator is allowed to use, in the VHF-UHF band, DVB-T, DVB-H or any other standard for mobile TV (ITU, ETSI); • The existing DTT network operator regulation applies to mobile TV network operators; • Max 1 multiplex dedicated to mobile TV is allowed for each network operator; • Mobile TV programs are not considered for the evaluation of antitrust threshold (max 20% of the total number of programs can be broadcast by the same subject); • Next step: regulation for the introduction of mobile TV (DMB-T) in DAB bands; 28 14 Thanks for your attention 29 15.
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