Red InterCable is an organization that groups independent cable TV operators in Argentina. Red InterCable has been operating since 1998 as as the principal representative of over 250 SME´s with presence in around 500 markets of 20 provinces.
The mission of Red InterCable, as originally envisioned when launched, is fostering synergies among cable operators, which has allowed these SME´s to stay competitive and profitable over time.
Red InterCable offers services such as: Digital TV for SME´s, programming packs, monthly subscriber magazine, complementary content platform, tax and legal support and cultural and educational content through the production of its own TV signal “Conexion Educativa”, among other services.
Furthermore, Red InterCable pursues key objectives such as:
- Improve the quality of service of cable operations so as to increase subscriber satisfaction;
- Undertake commercial management tasks in all areas of the group interest;
- and explore, select and incorporate new business options.
Red InterCable has taken forward as a mission the creation and development of the necessary tools that allow SME cable operators to provide multiple services associated with communications and entertainment.
SP: Red Intercable pioneered the use of MPEG-4 video HITS distribution for SD content to cable headends. Back around 2006/7 when Red InterCable launched the new digital DiBox platform there was consensus that MPEG-4 was “the next big thing”. However, savings realized on satellite space segment came at the price of more expensive set top boxes for cable operators (MPEG-4 STBs costing more than conventional MPEG-2 STBs). Red Intercable must have made a forward-looking assessment back then considering both OPEX and CAPEX aspects and their projected evolution. Looking back, can you quantify overall savings realized by the MPEG-4/DVB-S2 choice (less expensive satellite) against the choice possibly considered (MPEG-2/DVB-S2 with less expensive STBs)?
Di Cicco: It was not an easy decision to make since while major cable operators continued along the lines of MPEG-2 , we were not just gearing towards MPEG-4 but also towards DVB-S2 transport.
Our analysis was not just economic-financial but strategic and included the following considerations:
- Satellite was the only means to reach all cable operators grouped by Red InterCable.
- The project was lined up to provide a 100% digital service.
- From the economic standpoint, our project of digital TV fo SME´s had to be of easy access and within reach of all cable operators integrating Red InterCable.
- Satcom policies in Argentina at that time did not provide certainties in the short-to-medium term that Argentina would count with more satellites (and thus capacity) blanketing Argentina in its extensive territory.
- The advent of high definition television, which was expected to demand higher bandwidth requirements than standard definition, and that would represent a relevant milestone and of great acceptance among TV consumers.
- Time for cable operators and consumers to adapt to the new service would be rather long and would allow the realization of the planned investments.
- The need to count with a growing number of TV signals over time, where the number of signals would not only impact satellite capacity but also the bandwidth available within cable operators coaxial networks, which needed to include the digital TV service as an add-on to the existing analog service, at least until the service became 100% digital.
- From an economic standpoint the impact of satellite costs at start up would have a stronger significance than the technology cost. Through use of DVB-S2 and MPEG-4 we would achieve savings of 3-to-1. In other words, at that time Red InterCable would have needed to lease 6 transponders, instead of 2 if it had chosen to stick to MPEG-2 DVB-S. Thus, the choice for MPEG-4/DVB-S2 represented savings of USD 21.6 million over 5 years.
- …….among other considerations.
SP: Please update us on the latest about the “DiBox” HITS (headend in the sky) offering: how many remote headends deployed, number of (SD and HD) channels carried and over how many transponders. Linear vs non-linear content.
Di Cicco: So far, we have installed 180 remote headends that cover a bit over 300 markets in Argentina. Dibox counts with 98 TV channels, plus 5 radio channels, of which 20 channels are high definition.
Towards end of 2011, red InterCable launched a new version of remote headends, which allowed cable operators to incorporate and encrypt additional channels locally but through a hosted conditional access system centralized in Buenos Aires. This way, all signals that cannot be transported over satellite by Red InterCable are integrated locally. The only limitation is the processing capability of the remote headend systems, which can process over 100 HD signals.
This service is the most complete and competitive in the Argentine market, and the high number of headends and markets served by our service are a proof of that.
Complementing our Dibox service, over the last few months we have implemented TV everywhere services under our trademark “dibox play” such as Movie City Play and Hot Go and soon we will add Fox Play, HBO Go and ESPN PLay. This represents the beginning of a path towards content transport across other service platforms.
Currently, Red InterCable is working on a project linked to PPV (pay-per-view) to be launched in 2013, and has added satellite capacity, counting currently with 90Mhz of available capacity.
SP: Given the high OPEX associated with operating a purpose-built multi-transponder content distribution platform, does Red Intercable have plans to seek further efficiencies by, as an example, expanding into other South American countries and neighboring countries in particular? What are the challenges of expansion?
Di Cicco: Our objective has always been operating a platform that would allow us to expand into other countries covered by our satellite capacity. This is why we are now providing services in Uruguay and, as new opportunities arise, we will continue to expand to other countries.
SP: Please explain the rationale behind the selection of Ku-band for video distribution to cable headends, instead of C-band prevalent in the region for this application. What it the result of intentionally seeking Ku-band distribution? Lower cost per bit? Dual HITS-DTH operation?
Di Cicco: We all know that Ku-band´s weakness to rain fade but, in our case, our system needed to operate in controlled Ku-band environment since within the project we integrated DTH, which would allow the opening of a new revenue sources to support the project operational costs.
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