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Strategy Paper for Overcoming DTAG Market and Technology Advantage
This paper was created for a venture capital company and subsequently used to target cable accessible markets in Germany. The paper has been parsed in this forum to separately cover Digital TV, Broadband Data, Video on Demand, Telephony, Interactive TV, Gaming and Colocation.
DIGITAL TV
Digital TV is an already established fact of life in the 6 DTAG cable regions. The issue is the way the network is designed, i.e. a 500MHZ system. The current system is excellent for providing Digital TV systems, however there are two serious future downsides.
1. This 500MHZ system is unique. Therefore much of the equipment used in this system is only used for this system. Upside – Equipment custom made to work quite well in the system. Downside – Escalating maintenance costs.
2. The bandwidth available on the current system is insufficient without a tremendous amount of reengineering and unique customization.
3. Upside – If not expanding services nothing need be done.
4. Downside – If expanding offerings, system should be upgraded in order to remain cost effective in equipment acquisition and operational maintenance costs. This entails either mitigating risk by expanding to a system to 840MHZ or increasing risk by using new bleeding edge bandwidth optimization technology.
As much as possible, the enterprise should try to use COTS (Commercial Off the Shelf) systems which are used by other enterprises in order to lower the cost of doing business, keep maintenance costs in line with/or lower than industry standard, and to insure the availability of competitively priced parts over the lifespan of the systems. Using standardized (COTS) equipment has been proven to lower acquisition and maintenance costs over the lifespan of the systems. The current 500MHZ system does not allow this to be an option.
Our suggestion is to upgrade the enterprise to an 800MHZ (840MHZ) system that uses standardized equipment. An 800MHZ system allows the addition of services, the ability operate under common degraded conditions while still maintaining high quality signals, use of existing proven architectures, future expandability, flexibility in offerings and services, etc. The upgrade can be partially financed by partnership agreements with the Level 4 operators in non-high density metropolitan areas. The dense populations of Munich, Berlin and a few other cities can more than justify the financial outlay needed to upgrade systems. Conversely, some sparsely populated and rural areas of the former East Germany cannot sustain a cost efficient upgrade in the short term. We suggest either a contracted operations/management agreement with the Level 4 operators to help finance this part of the system, or a very extended "lease" with the Level 4 operators. In the absence of L4 operators, We would make a very strong case for introducing services slowly and using other technologies such as point-to-point, wireless and satellite in those regions. Upside – Common equipment, common architectures, fault resiliency, lower continuing costs, expandability, usage flexibility, availability of resources. Downside – Higher initial costs.
Sean DAniell is a internationally seasoned I.T. executive with highly effective technology and organizational management experience that increases profitability. Mr. DAniell has extensive experience in creating, managing and guiding thriving, successful startup and Fortune 500 technology departments. http://www.abilenegroup.com
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