In a Shanghai ballroom full of IPTV players, City Telecom chair and co-founder Ricky Wong said he has no use for IPTV as a cable TV replacement service, and added that his own company launched its own IPTV service, Hong Kong Broadband Network, several years ago primarily because of competitive pressure.
"I launched IPTV because I had no choice," Wong said at the IPTV World Forum Asia conference in Shanghai. "PCCW launched it and HGC launched their service, so I have to pretend to be a serious long-term player to my consumers. If not for that, I wouldn't have bothered with IPTV."
Wong warned service providers that had not yet ventured into IPTV that it's a very difficult business to crack.
"Telecoms is a pretty straightforward business, but with IPTV you have to acquire content, which is very complicated and costly, depending on the relationship you have with each content provider."
Wong said that rival PCCW was "very brave" to make a "huge investment" in acquiring exclusive content to launch NOW Broadband TV, but said that its basic business model as a "cable TV substitution service" wasn't compelling.
"If you have a choice, don't touch that model," Wong said.
Wong said he was more interested in IPTV as a mechanism to integrate user-generated content.
"IPTV should be a center to connect all the apparatus around you, whether it's an iPod, an Xbox console or a 3G phone. The telco can sit in the middle as a gateway to connect all of that."
Paul Berriman, PCCW's head of strategic market development, disagreed with Wong's description of NOW Broadband TV as a cable TV substitute.
"We've long since recognized that IPTV has to be a VAS play to compete with cable, and we've already implemented interactive services and cross-media platforms and other types of services that [Hong Kong cable operator] i-Cable can't offer," he told telecomasia.net on the sidelines of IPTV World Forum Asia. "We're also able to offer IPTV at a much lower incremental cost than i-Cable because most of the same infrastructure can be used for other services."
Berriman also described Wong's comments on the cost of content acquisition as "sour grapes".
"He has no idea how much we paid for our content," Berriman said. "But this is why I've mentioned in the past that some telcos have a tendency to think that content should be handed to them on a plate. In reality it's a competitive market like any other, and whoever can make the best deal wins."