Friday, April 07, 2006

IZZI aims to pull ahead of Baltcom

IZZI, the cable television, internet and mobile telephony service provider, has boosted its cable TV subscribers to 100 000 by acquiring FAO, a cable TV and internet company operating in several Riga suburbs. IZZI executives say they aim to surpass Baltcom (with around 130 000 subscribers) and become the largest cable operator in Latvia. More acquisitions of smaller operators are planned.
By throwing down the gauntlet to Baltcom, IZZI is also starting a contest of two different technology and program packaging mixes. Baltcom is offering a large number of digital cable channels (0ver 100) for a monthly price of LVL 10 to 15 (there are various mixes in various parts of the Baltcom network). Many of these channels are (for me) obscure Russian language or narrow interest (Wine Channel). Baltcom's digital TV offering is often promoted as best purchased as part of a triple-play package combining internet and fixed network telephony (where available). Baltcom uses its optical network (which it is apparently building out) and MMDS (a terrestrial digital broadcast technology that requires special equipment, usually to capture the signal for an apartment building with an internal cable net).
IZZI is distributing its digital TV in smaller, well defined packages grouped by interest (news, sports, music, Russian, film, etc.) with the basic service costing LVL 4 per month and the interest packages LVL 1.50. It offers, in effect, a menu-type service -- add whatever you want to the basics. The more interesting aspect is that IZZI is able to deliver its TV offering as IPTV, which can be carried as a service by other cable TV/Ethernet based internet and cable TV operators. This means that IZZI can capture subscribers by partnering with smaller and regional cable operators across the country. All it needs to do is deliver the IPTV «master» signal to the local network, which then resells it. No special, proprietary technologies (such as MMDS) are involved.
In my view, IZZI has a very flexible approach to expansion. It can expand by acquisition, as it has with FAO, or it can expand its subscriber base by partnering with other operators, be they cable TV or «pure» ISPs (with sufficient bandwidth) by offering to deliver IPTV down a backbone. The Latvian network solutions company Santa Monica Networks is rumored to be building such a backbone for IZZI that will link it to at least one other operator in a town outside of Riga, where the local ISP will then be able to deliver IZZI's IPTV.
The development is also a signal that Latvia's smaller cable operators, ranging from those with a few thousand subscribers to small, community or building -based networks, are starting to consolidate and many will eventually be bought by larger players. It remains to be seen what moves Baltcom will make. There is nothing to stop them from expanding by acquisitions as well.


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Mick C Malkemus said...

We've been using Izzi for months now, and recently, have been unable to connect to a secure network, specifically:
Fortunately, I've been able to connect to my school at work, but if this lack of connectivity continues much longer, we will definitely find another service provider. Has anyone else been having similar connection problems with Izzi? Just curious.

Mick Malkemus, Stabu Iela

Juris Kaža said...

Try asking someone at IZZI customer service (assuming you are using their wireless internet) how to deal with this.
I 'm afraid I am no expert on setting up secure VPNs, but there is no shortage of such experts in Latvia.