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In 2005, cable companies began offering cable telephony , also known as VoIP or digital phone service, to its customers for the first time. Since that time, the big four cable companies – Cogeco, Rogers, Shaw, and Videotron have taken more than 3.6 million landline phone customers away from the big Canadian telephone companies.

To offset losses in telecommunications, Bell Canada, Bell Aliant, MTS, Sasktel, Tbaytel, and Telus have decided to take on the cable companies by offering cable customers IPTV or Internet Protocol television, a technology that enables telephone companies (Telcos) to deliver television programming through phones lines.

The term IPTV may be new to some readers, however, the technology is not. The technology was first developed in 1990’s by a company later bought by Cisco Systems. Canadian phone companies have been testing and experimenting with IPTV since the 1990’s. In 1999, NBTel was the first to commercially deploy Internet Protocol in Canada. Sasktel and MTS have been offering IPTV services to select customers since 2002 and 2004 respectively. Telus began selling its Telus TV service (now called Optik TV) in late 2005, while Bell Canada began offering its service called Fibe TV in 2010.

So what is the difference between the digital cable service offered by cable companies and the IPTV service offered by telecommunications companies?

From the television viewers perspective, IPTV and digital cable are the same thing. Both IPTV and digital cable services deliver a stream of encrypted data from centralized servers to a digital set-top box in your home. The digital terminal decrypts the data and then passes it on to your television where it is displayed on your screen. Like digital cable, IPTV providers offers hundreds of digital television channels, an on-screen, electronic program guide, high definition programming, pay-per-view, video on demand (VOD), PVR capabilities, and other interactive services.

The only significant difference between IPTV and digital cable is the physical connection used to deliver the information to your home. Telcos use your home's telephone line, while the cable companies use your home’s coaxial cable connection,

The biggest visual difference you’ll find between IPTV and digital cable is not the television programs or channels but the user interface on your digital set top box. In Canada, the cable companies set top boxes run on proprietary user interfaces developed by the hardware manufacturers, typically Motorola or Cisco. These interfaces are relatively primitive looking and seldom updated. In fact, Rogers cable still employs an electronic program guide on its HD PVR that was designed for tube televisions with a 4:3 aspect ratio.

Compare that to the Canadian IPTV providers who provide set top boxes which run on software called Mediaroom which was developed by Microsoft. First announced in 2007, Media Room is used by more than two dozen telephone companies worldwide and is embedded on more than 15 million set top boxes in more than 7 million homes worldwide.

In addition to offering the type of functionality you’d expect in a cable set top box, Media room has a number of exciting features that makes IPTV a serious challenger to traditional cable including: Multiview, an implementation of picture-in-picture that allows multiple channels or multiple camera angles of the same program to be seen on the screen simultaneously; whole home PVR capabilities which lets you watch programs stored on your PVR in multiple rooms; the ability to stream recorded shows from your PVR to a Windows enabled smartphone; and the ability to turn your XBOX 360 into a digital set top box.

One other significant difference between IPTV and Digital Cable in Canada is the compression scheme used to deliver the signals. Canadian IPTV providers use the superior MPEG-4 video compression scheme while cable companies typically use the older and less efficient MPEG-2 compression scheme. By using the MPEG-4 video compression standard, telcos are able to deliver more channels in the same bandwidth without sacrificing video quality.



IPTV vs. Internet Television

When discussing IPTV, the question many consumers have is what is the difference between IPTV and Internet television. While both use Internet Protocols to deliver television programming to your home, there are some significant differences.

IPTV signals are delivered to consumers through a private network that is controlled by your telephone company. The encrypted video streams originate from central servers controlled by the phone companies and can only be decrypted by your digital set top box which connects to your television. In contrast, Internet television such as Netflix, uses the public internet to send streaming video to your home. In the case of Netflix, the video is streamed across the Internet to a Netflix app on your computer, video game console or television.

IPTV availability in Canada

If you’re wondering why you haven’t heard of IPTV, it’s probably because its either not available in your neighbourhood or has only recently become available in your area.

IPTV is not a service that can be quickly or cheaply rolled out to consumers. Before phone companies across Canada can offer IPTV to most Canadians, they need to invest billions to build or upgrade the infrastructure necessary to deliver IPTV.

The good news is that over the last five to ten years, the telcos have invested hundreds of millions of dollars in IPTV and the number of IPTV capable homes is increasing at a rapid rate.

In Western Canada, where Telus, MTS and Sasktel operate, there are now about three million IPTV capable households and over 650,000 of them are now subscribing to Telus Optik TV, MTS TV and Sasktel Max television services. The largest provider is Telus which, at the end of September 2011, had 453,000 subscribers. MTS has about 93,000 subscribers while Sasktel has over 85,000.

In Eastern Canada, the two major IPTV providers are Bell Aliant and Bell Canada. In its most recent financial statements, Bell Aliant reported having 68,000 subscribers. Bell Canada did not publish IPTV subscriber numbers but Digital Home estimates the number is likely no more than 50,00 or 100,000. However, thanks to billions of dollars in capital expenditures over the last few years and in the near future, the number of IPTV capable homes in Eastern Canada is expected to soar.

In Atlantic Canada Bell Aliant has spent hundreds of millions of dollars already to build the necessary infrastructure to deliver IPTV and is expected to invest another $350 million in 2011 and 2012. The result is IPTV should be available to over 600,000 homes and businesses, approximately one third of Bell Aliant’s competitive territory, by the end of 2012.

In Ontario and Quebec, Bell Canada says there are now two million IPTV capable households in its service area and it expects that number to reach four million by the end of 2011.

Add it all up and the number of IPTV capable households in Canada is currently near five million and will likely top seven million by the end of next year. By the end of 2012, over half of the approximately thirteen and a half million households in Canada should be IPTV enabled.

As the IPTV infrastructure is completed and the number of IPTV enabled homes climbs across the country, more Canadians will have the opportunity to switch television providers in the same way they have had the ability to switch landline phone providers in the last six years.

The good news for consumers is IPTV offers many new possibilities and real competition for cable companies in Canada.

Discuss the Canadian Telco’s IPTV offerings in the following Digital Home discussion forums.

• Bell Aliant FibreOP
• Bell Canada Fibe TV
• MTS TV
• Sasktel TV
• Telus Optik TV

Updated: November 8th to correct number of IPTV subscribers in Canada.

 

[Commentor]

Had Shaw Gateway...Telus Optik kicks its butt and is less buggy.

The Shaw on-screen guide is awkward, too many sub menus - looks dated compared to Telus. Shaw's PVR recording options are poorly done. Shaw gateway is glitchy - if live tv is paused for a longer period of time, say 3 mins, when you hit play to start then the video, it seems to freeze for while then when it does playback the video is choppy for several seconds. The guide seems to freeze every now and then, had to change channel to unfreeze.

Shaw gateway is also currently the most expensive IPTV. As usual.