IPTV pioneer causes a ruckus

"Triple play" might not necessarily ring bells with the average consumer, but it is a sector worth $872 million worldwide, with hundreds of small players selling their wireless technology products to businesses and consumers.

by Joe Gill, World Business web exclusive
Last Updated: 23 Jul 2013

Although revenues are still a fraction of the global telecoms market, at the IPTV World Forum in London earlier this month there was plenty of optimism that just around the corner awaits a market of millions.

Triple play refers to a combination of wireless TV, internet and digital telephone services provided via broadband connections to the home using the new generation of wi-fi technology.

Western Europe currently has the largest number of IPTV subscribers of any region - 1.6 million - with France accounting for approximately half of them. Global customers are expected to double each year from 6.4m at the end of 2006 to nearly 50m by 2010, according to analysts Gartner.

Home internet and VOIP using wireless makes sense for consumers who want to move on from broadband cable and fixed line or mobile phones, but how many people are desperately waiting to get their TV piped via wireless into their bedrooms?

Well, they might do when the technology is sold as a package by your broadband carrier, and the technology provides consistent high-quality pictures and sound. In France, early adoption of IPTV by France Telecom and aggressive competition among players including Free and Neuf helped push up subscriptions.

Making the switch to IPTV happen was the challenge that inspired Selina Lo to found Ruckus Wireless, an IPTV pioneer, in 2004. At the IPTV World Forum in London last week, Ruckus Wireless was named Best Distributor of IPTV. According to Lo, the show has doubled in size since last year.

Earlier this year Lo attended the World Economic Forum in Davos and mingled with the world's top CEOs, which she says was an "amazing experience". The feeling was apparently mutual, with WEF's technology panel picking Ruckus Wireless as a "technology pioneer" for its "smart wi-fi" home networking technology.

Hong Kong-born Lo, who took her computer science degree at Berkeley, stands out in this male-dominated industry for being an Asian woman technology entrepreneur - the company website advertises her love of shoes, shopping and one-word answers. But her record for technology start-ups, industry awards and multi-billion dollar IPOs speaks for itself.

Ruckus's CEO and president has built a career and fortune by setting out to solve big problems. This time it is the following: "The problem all IPTV service providers have is the destructive customer experience when they get IPTV to the gateway. They start having to wire the set-top box to the DSL modem. Most people don't like that and there is a rejection rate of 30%," says Lo.

Then comes the pitch: "There are thousands of wi-fi players and IPTV service providers - it's a very competitive market. But we are the only one known to support video, voice and internet with a reliable signal that a consumer can set up at home without a complicated registration process. Once they take it out of the box and connect it up, it's ready to use."

Ruckus's biggest market is Europe, which is not as saturated with cable and satellite as the US. "Cable and satellite in the US are pretty well penetrated but that is not the case in Europe, so new cable is being installed with higher bandwidth. Satellite is not so popular in Europe either," Lo says

She says that Belgium's biggest telcom Belgacom took a "visionary position" in their approach to wireless at home. "They knew they had to make it [triple play wireless] a self-installing service otherwise people would not be interested. They now have 130,000 subscribers a year. You have to remember that when a provider has to install they can only do two jobs a day so it would take forever to do this number.

"Belgacom looked at our solutions - they plugged our router into their DSL gateway, and our adaptor into the set-top box. O2 telephone in the Czech Republic did the same." Ruckus are now in around 12 markets - the biggest being Italy and France. Its first customer was IPPC Hong Kong.

The market, of course, is not just about TV -internet and VOIP telephone are equally important. Fixed line and mobile phone telecom companies are losing minute usage to VOIP services, and small and medium businesses are leading the charge to VOIP. Last year around 58 percent of IP lines shipped went to medium-sized companies, while an increasing interest from small businesses saw them buy 18 percent of IP lines sold, according to IDC.

"There is a very competitive market for creating system infrastructure. Alcatel and Siemens now working on IPTV, and Nortel, Cisco and Ericsson are jumping in. We are just one player at the end of the broadband tunnel," says Lo.

But while wi-fi is becoming more popular, most consumers still haven't heard of triple play. Part of the reason for this is problems with the quality of the signal and the long lead time for the telcoms to test and market wi-fi products. Normal wi-fi antenna send a signal evenly in all directions and are susceptible to interference from other signals in the vicinity. In addition, the range of normal wi-fi is often very limited. The Ruckus technology is more like a beam with software that chooses the most efficient route to the VOIP phone, computer or TV set-top box. Lo describes it as "just like a torch compared to a lightbulb.

"Bluetooth, microwaves, cordless phones and a lot of consumer electronic household goods generate noise and interfere with signals. Most antenna in the market don't have a way of stopping the noise. We have created a smart signal that can get around obstacles in the home."

This is Lo's third start-up in the network communications field. The second, Alteon WebSystems, went public in 2000 and was sold to Nortel Systems for a cool $7.8 billion. The timing -just before the bursting of the dotcom bubble - was fortuitous. "Those were good times," says Lo wistfully.

Lo went from being Alteon's VP of marketing to become VP of Nortel Networks' content business unit following the acquisition. Her first start-up, Centillion, was sold to Bay Networks in 1994 for $150m, where she joined Bay Networks as a VP of marketing.

Lo tells the story of how, having quit Nortel Networks to "try out semi-retirement" the seed of the Ruckus idea was born when she decided to get a cable TV in her bedroom. "I had to get a guy to do it. It took six hours and they had to come back to fix it later. He had to run a wire through my ceiling." The experience was "tremendously irritating" and got her thinking. "I just started looking for telecoms companies doing wireless television. I found two guys developing the technology - William Kish and Victor Shrom - at an incubation research centre, with funding from Secoya Capital."

Secoya Capital is synonymous with the rise of Silicon Valley, having helped create most of the household names one associates with the 1990s digital boom - Yahoo, Google, Cisco, Paypal and many others. Lo met the technical founders and decided their ideas were worth funding. Major telecoms have been trialling the product, but progress is slow. "Practically every major telcom has IPTV in the lab, in home trials or in production. It takes a long time to work with the carriers. We have chosen a path that is a lot more difficult than working with retailers but hopefully the payback will be worth it."

She adds that Ruckus is talking to all the major telecom companies in the UK. The advantage of going with the carriers is that they can offer a ready-made package which removes the need to navigate through an electronics shop or online retailer and find the right package for your needs.

So far Ruckus has shipped around 100,000 units of branded technology and more than that number again as licensed technology under the Netgear brand for its routers and DSL gateway.

Lo, naturally, is optimistic. She expects company revenues to more than double in 2007 although going public "is not in our plans this year", she adds with the clear implication that it will be in future. "We are not Cisco yet, but we are on our way there."

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