Confused of Bromley

[Stuart]

Originally posted by andygrif
But what you have to remember, when BT was sold into the private sector, it was (indirectly) the taxpayers that benefitted from the sale of shares, most of this went directly back into goverment coffers.

It did indirectly benefit us, but it could be argued the government sold us something we (indirectly) already owned.. However, that is an argument for another thread.

Originally posted by me

Anyway, to bring this back on topic, I thought Proppin' said that the network was ready for e-TV, but they were just waiting for the software download to the boxes?

Does anyone know of any dates for the updated software?

[andygrif]

Originally posted by scastle
It did indirectly benefit us, but it could be argued the government sold us something we (indirectly) already owned.. However, that is an argument for another thread.

You're right...this could decend to a politics argument...and that will go on forever!!!

[ntluser]

Originally posted by andygrif
You're right...this could decend to a politics argument...and that will go on forever!!!

I think it's important to remember the starting points of all these companies and the amount of time they have had to develop their services.

BT took over the networks of Post Office Telephones, previously supported by taxpayers and inherited a standard system that was in need of development and upgrading, which over time they have done.

Sky set up a standardised system, which once customers had a dish, only had to be maintained and developed.

NTL on the other hand inherited (by takeover) a variety of networks of varying technical standards and in varying states of repair. Unlike Sky, who only have to send their signals through the air to the customer, NTL were required to standardise, maintain, develop and upgrade the fibre-optic networks required to provide their services.

Because of the immense costs involved, NTL is not currently in a financial position to be able to carry out all the work required. In fairness to NTL they have tried to standardise the facilities provided by the Langley and Bromley platforms but provide them in a different technical way.

At present, it's true, that there are things that can be done only on the Bromley platform and others that can only be done by the Langley platform.

Over time, and bear in mind that NTL is relatively young compared to Sky and BT, this situation may change.

[andygrif]

Originally posted by ntluser

NTL on the other hand inherited (by takeover) a variety of networks of varying technical standards and in varying states of repair. Unlike Sky, who only have to send their signals through the air to the customer, NTL were required to standardise, maintain, develop and upgrade the fibre-optic networks required to provide their services.

Because of the immense costs involved, NTL is not currently in a financial position to be able to carry out all the work required. In fairness to NTL they have tried to standardise the facilities provided by the Langley and Bromley platforms but provide them in a different technical way.

No-one forced them to do it. Sure I agree that they have been the victim of any number of poor trading periods, however they know perfectly well how much it would cost to lay cables and how many people they could approach. As a matter of conjecture, it would be easy to argue that becuase the ntl offer was nowhere near as sophisticated at BSkyB's at that time, Sky Digital now has many many more millions of customers.

It is only now that ntl are starting to redress some of the balance, but I think that even they would agree that they are still a couple of years behind the Sky offer.

Over time, and bear in mind that NTL is relatively young compared to Sky and BT, this situation may change.

Not really. The earlier cable companies that I remember were forerunners to Sky. The basic (copper cable) infrastructure was already in place for many years, decades in some cases.

Don't forget also that Sky has spent huge sums of money investing in its uplink facilities, and runs quite a few tv channels too, both of which are overheads that ntl: do not have.

Don't get me wrong, I would like to see the cable service suceed. It has the potential of being a far superiour service to satellite, becuase of the two-way path. We will eventually start getting true video on demand, faster net access, VOIP, video-conferencing and so on. However I do worry that it may be too late for the incumbent.

They will not be lent the amounts of money required to invest in these technologies, given history and present financial position. Without investment in future technologies, as we have already seen, ntl will fail to deliver the subscriber figures to break even. If you don't break even, you're back at square one.

In addition to the above, one of the most important things that have got Sky to where they are today is marketing. They are very good at it. If you are very good at marketing, a lot of people will buy your product. Let's face it, ntl are not very good at marketing either.

[Stuart]

Originally posted by andygrif


Don't forget also that Sky has spent huge sums of money investing in its uplink facilities, and runs quite a few tv channels too, both of which are overheads that ntl: do not have.

I thought Sky's uplinking was done by BT and NTL. I am pretty sure I read on .COM that they don't do their own uplinking..

[SMHarman]

I think you are correct in that BT/NTL do the final transmission to the sat. However that is part of the network infrastructure.

Sky do all the encoding etc of the transmissions to NTL/BT for them to pass onto the uplink. That has had some pretty heavy investment I imagine.

[Stuart]

Originally posted by SMHarman
I think you are correct in that BT/NTL do the final transmission to the sat. However that is part of the network infrastructure.

Sky do all the encoding etc of the transmissions to NTL/BT for them to pass onto the uplink. That has had some pretty heavy investment I imagine.

It's true, Sky have made a huge investment (in fact, they were running at a huge loss for the first few years, and I think, even now are heavily subsidised by other companies in the Murdoch empire).

But, as far as I am aware, Sky only encode their own channels. Having said that, again as far as I am aware, NTL don't encode any.

It is still considerably cheaper for Sky to maintain and improve their services. I think this is partly due to the huge costs of network maintenance, and partly due to the fact the NTL still own all the STBs on their networks (which will need upgrading from time to time).

Sky don't have this problem. I think the bulk of their boxes are owned by the customer, so the customer has to pay to upgrade their box.

Sky are also backed by one of the largest companies of any description in the world (News Corp), so can afford to run at a loss for a while..

[andygrif]

Originally posted by scastle
NTL still own all the STBs on their networks (which will need upgrading from time to time).

Sky don't have this problem. I think the bulk of their boxes are owned by the customer, so the customer has to pay to upgrade their box.

So why didn't ntl go down the route of the Sky model? This would have made sense in retrospect. If the boxes were owned by the customer (competitively priced against Sky's boxes) then this massive investment in the kit would not have been necessary.

Plus ntl was backed by some of the richest people in the world at one point, but the difference is that ntl: didn't deliver, Sky did.

Rupert Murdoch isn't stupid, he will back a long-term investment like anyone else, but if Sky hadn't have worked out he would have cut his losses and run. But it didn't happen, becuase they were sharp. The offered a great package, with what people want to watch, good system (despite it's launch teething trouble on the Sky Digital platform), at a reasonable price, and marketed well. The Sky Digital model is now recognised within the industry as the de facto standard and bechmark by which all other PTV COs are judged.

None of this stuff is rocket science, it's all basic economics and marketing: Consumers aren't stupid, if they think they're getting a better deal somewhere else (even if in the long-run they are not) they will go with it. My concern comes from the fact that the digital PTV market is rapidly approaching its ceiling. Freeview will be de regieur for the future low-end or basic viewer that is un-concerned with movies , sports and the like. So what we are left with, fundamentally, is around 10 million PTV homes, but the cablecos only dominating about 20% of the market combined max.

They are not making enough money with the 20% they can hit, so where will they go from here? As before, they can't offer a better system than Sky right now, that is too much investment. They can market themselves a bit better than they were, but becuase Sky is now a cash rich company, you can be sure they will do it better, more agressively and more often - so it would be best to save the pennies.

But it does seem like a bit of stalemate. As I see it, there are a couple of ways forward:

1. TW & NTL merge? No. Short term solution, leads us back to the same problem. TW & NTL should merge, but jointly under a new owner, possibly Liberty Media.

2. NTL becomes a carraige company only. I haven't thought this through, but just off the top of my head this could work along a similar lines to the local loop unbundling that BT is undergoing. NTL could become a very profitable television and internet carrier, leaving the billing to companies like Sky or MTV or whomever. Perhaps a topic for discussion?