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November 7, 2012
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Catching up with consumers, Deutsche Telekom is focused on agility

Gerry O’Sullivan, Senior VP Global TV & Entertainment at Deutsche Telekom, has made it clear that he would welcome a future where all TV services were delivered from the cloud without set-top boxes, but he believes this is a long way from reality. Speaking at the OTT TV World Summit in London today he said that if you could guarantee the quality of experience for customers and the security of content there would be moves in this direction. “Then you could put everything in the cloud and get rid of the STB and that would make me happy,” he declared. “But it will take a little time to happen.”

There is increasing interest in whether Pay TV operators could become more adaptable if they moved at least parts of their operations, like the User Interface, into the cloud. But for now most are using traditional middleware approaches, doing their best to optimise the resources on hardware that is limited in its power by the need to give it free to subscribers. O’Sullivan admitted that there is a constant concern across the industry regarding flexibility and the need to get to market with new functionality faster.

Asked whether the Microsoft Mediaroom middleware used by Deutsche Telekom in Germany provides the flexibility the company needs in a more competitive market, O’Sullivan defended the platform. “We have some very happy customers in Germany on that platform and it is a very high quality product. In surveys in Germany we are top for usability and customer satisfaction. From a customer experience point of view we are very happy, although flexibility is an issue. But having worked with lots of companies in the middleware space I do not think anyone has cracked that.”

Deutsche Telekom is working hard to make itself more responsive to consumer demands and O’Sullivan revealed just how far the mindset has changed for one of the world’s biggest telecoms companies. There is now a sharper focus on partnerships, illustrated by the way the company has teamed with Spotify to provide a bundled music streaming service for subscribers.

“Large corporations have always been guilty of trying to do everything themselves, but this is the era for partnering,” he said. “If someone has launched a service and runs it well, and has great experience then why not partner with them.”

O’Sullivan echoed the sentiments expressed in the summer by Mike Darcey, Chief Operating Officer at BSkyB in the UK, that Pay TV operators are no longer ahead of the game. “15 years ago I was delivering services to market that were ahead of our customer expectations but now I feel we are behind and we are playing catch-up,” O’Sullivan told the London audience Wednesday. “Often the issue is how soon do we need to get to market with a new service and the answer is usually ‘Yesterday’. Sometimes there is already a competitive offer and if it would take us a year to develop the service ourselves then why not partner with someone that is already out there?”

This requires a new attitude to service development, overlooking the teams of smart engineers spread across various buildings that the company has access to. But for O’Sullivan and Deutsche Telekom it seems that pragmatism is now a necessity. He made it clear that there are no sacred cows in the company. Though classic multicast IPTV is viewed as a great mechanism for content delivery, it is only part of the solution for a company that views its future as an entertainment leader.

“I am a huge fan of IPTV but just as content is king, reach is also king so unless you are happy to ignore huge sections of your customer base you cannot wed yourself to one technology,” he declared.

Deutsche Telekom has already embraced satellite and now offers a hybrid set-top box combining satellite broadcast and a broadband connection. He also made it clear that the company is ready to exploit OTT more fully, including with a standalone, pure OTT offer designed to target new customers and upsell them to the full Entertain IPTV product.

O’Sullivan also outlined how the telco is broadening its view of what it means to be a full-service telco, beyond Pay TV and into the wider entertainments market. Deutsche Telekom already offers streaming music and is focusing on games to the TV and electronic publishing in future. He is looking for at least three more entertainment propositions that his company can deliver and he noted that having a large customer base and multiple products means you can be clever with your bundling, as with the free Spotify offer.