Rostelecom replaced its aging IPTV platforms with a new cloud-based system to improve customer satisfaction and reduce costs. The multi-level architecture stores subscriber data, content, and preferences in the cloud for access across devices. Since launching in 2012, the service has grown from 500k to over 1.4 million subscribers, generating revenues that double yearly. Bundling interactive TV with broadband has reduced churn rates and increased average revenue per user through premium packages, video-on-demand, and multiroom services. The cloud-based platform positioned Rostelecom as the leading pay TV operator in Russia.

1. 1

2. Rostelecom cloud based
Pay TV service
Russian largest IPTV operator.
Case study
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3. Rostelecom at a Glance
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4. Russian Pay TV market
Rostelecom (Cable/IPTV) Tricolor TV (Satelite) MTS (Cable)
Er-Telecom (Cable) Akado (Cable) NTV Plus (Satelite)
20%
29%
14%
10%
6% 13%
8%
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5. 7 years of IPTV experience
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6. Platform replacement preconditions
• Internal
– Low customer satisfaction level
– Low “old platforms” reliability & performance
– High ownership cost
• External
– Growth of video consumption in Internet
– High piracy level on Russian market
– Market development level change compared to
initial IPTV product launch in 2006
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7. Key business requirements defined before
platform choice & implementation
• Service must be available both for on-net (Rostelecom) and
off-net (non-Rostelecom) Internet users
• Service should support STB, Tablets, Smart TV, laptop,
smartphones, etc.
• Time shift support for TV content is a must
• Video products (TV&VoD) is not the only focus. We’d extend
our product to music, books, software
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8. Strategic decisions made to meet
business requirements
• Cloud based service
– Multiscreen content
provisioning
– Simple for customer Central node
– Easy to implement time
shift service
• 3-level platform Macro region 1
….
Macro region 8
architecture
– Close to customer Branch 1 Branch 78
– Reduce network load ….
– Easy to manage & maintain
– Reflects company structure
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9. High-level platform architecture
Charging &
Content Content
content User interface
management Delivery
synchronization
All platform was developed according to the very precise requirements defined by
different Rostelecom departments
• Marketing & product
• Content procurement & management
• IT
• Technical
• Network
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10. What cloud does
• Subscription data
– Stores data on purchased subscriptions & items
– Expiration date, screen availability
• Multiscreen time shift service management
– Paused content
– Network PVR management
• Customer preferences
– Favorites channel list
– Customized channel lists (sorting)
– Parental control settings
– Recommendation engine
• Content adaptation
– Provides required video stream adopted for customer device & available
bandwidth
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11. Project history
2006-2010
7 separate IPTV
platforms 2012
No single product New platform installed
management Product management
150K subs reached 1,4M subs reached
2010-2011 2013
7 separate IPTV Migration of 700K “old
platforms subs” into new
Single product platform
management
500K subs reached 2,5M subs planned
Eo2013
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12. Does it work?
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13. Rostelecom Media Services
Brief description
Cloud based multiscreen content delivery
platform
– Set-Top-Box
– Zabava.ru portal
– iPad app
– Smart TV & Android app coming soon
Content available :
– TV channels
– Video (TVoD, SVoD)
– Music
– Games
– Software
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14. Interactive TV subscriber base growth
10 times in 3 years
Service growth Service penetration
Subscriber base
1 600 000
1 427 599 Eo2012
1 400 000 • 31% Fiber-optics broadband subs
1 200 000
1 000 000 • 10% xDSL broadband subs
800 000
600 000 • Up to 60% in some regions
400 000
200 000 • Average service penetration 16%
-
Jan-10
Apr-10
Jul-10
Jan-11
Apr-11
Jul-11
Jan-12
Apr-12
Jul-12
Oct-10
Oct-11
Oct-12
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15. Interactive TV – key element in Triple
Play strategy
Broadband Churn reduction
– Broadband+TV subs churn 2 times less then Broadband-only
ARPL growth
– Media services add 30% to ARPL
Broadband & Telephony ARPU decline compensation
– Media services ARPU grow approx. 20% annually in opposite to declining broadband &
telephony services ARPU
New subs attraction
– Interactive TV & other media services are product differentiators
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16. Rostelecom Media Services
Revenue
Media services revenue,
mln Euro
120,0 111,5
100,0
• Rostelecom Media Services
80,0 revenues doubles every year
59,5
60,0
40,0
22,3
20,0 9,9
0,0
2010 2011 2012 2013
(forecast)
Excluding NCN Pay TV services revenues
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17. Media services VAS
20% of media services revenues are
Revenue streams generated by VAS
Subs by services
VoD users
SVoD users
VoD Premium TV packages subs
Premium Customers with 2+ TV packages
TV SVoD Multiroom subs
packages
Media 29% 22%
TV
services Multiroom 4%
packages 11%
revenue
34%
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18. TV packages
• Customer may choose either to
subscribe “Mixed” TV package or
“Thematic”
• Every next thematic package cost
20% lower that previous one
• Maximal package includes all
thematic packages
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19. Premium TV packages
• Viasat Premium HD package
• Adult channels
• HD channels
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20. Video On Demand
• 20% of Interactive TV subscribers
use VoD service monthly
• Average VoD user does 4
purchases per month
• VoD adds 6% to media services
ARPU
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21. Subscription Video On Demand
• Monthly subscription for VoD library
(certain items)
– PictureBox (NBCUniversal)
– KidsClub (mixed content for kids)
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22. Multiroom
• Flat rate fee for any other TV at
customer premises
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23. ARPU trends
ARPU
• ARPU growth 36% in 2 years
• 20% ARPU growth in 2012
+36% in 2 years • ARPU growth factors:
– Non profitable rate plans cancelation
– Rate plan optimization for each region
– New packaging policy
– VAS upsell
Jan-11
Jul-11
Nov-11
Jan-12
Jul-12
Nov-12
Mar-11
Sep-11
Mar-12
Sep-12
May-11
May-12
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24. Summary
2,5 years took for Rostelecom to set up Media Services
– New product, content & marketing team
– New technical solution
– New business processes
Result:
– Twice reduced churn for bundle subscribers
– #1 Operator in Revenue on Pay TV market (Comnews Awards 2012)
– Upsell Media Services VAS allows to grow ARPU 20%
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25. Thank you!
Andrey Kholodnyy
akholodniy@rt.ru
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