The quality of the terrestrial network infrastructure in the Middle East has been long neglected. BT Media and Broadcast Harry Formosa tells Digital Broadcast about the company's plans to link its Global Media Network through Dubai assesses the prospects of future regional infrastructure investment.
The UAE - and Dubai in particular - is often described as a ‘hub'. Sometimes this is a reference to its strategic position for international air travel or for shipping. The same attributes that have made the country a fitting location for these activities also make it an ideal base for communications services distribution.
BT Media and Broadcast has been operational in the Middle East for a significant time but is now looking to ramp up its activities, initially through enterprise operations with the region's media players. Eventually this presence will include the development of a hub in Dubai that would see the emirate become the latest link in BT's Global Media Network (GMN).
The GMN is an IP network designed with the demands of live video transmission in mind, specifically for use by the broadcast industry. According to Formosa, it is an overlay of BT's existing worldwide Multi Protocol Layer Switching (MPLS) network. This has around 180 point of presence (PoP) locations worldwide.
"The ambition for BT Media and Broadcast in the Middle East centres on putting a PoP into Dubai," says Harry Formosa, general manager, client management, BT Media and Broadcast.
"The Global Media Network is basically an overlay on the back of the BT MPLS network, which provides for SD- and HD-quality services."
At present, the GMN takes in 70 locations in ten different countries with the most recent extension into South Africa launched in the final quarter of 2008.
"There is a strong rationale for putting Dubai in place on the GMN. It makes sense as a location for encouraging customers onto the network, with routes like Dubai into Mumbai and Dubai into London," explains Formosa.
This also helps us form a larger ring within the network so other customers can transmit material on routes that only pass through the region. What we have done is look at the potential growth markets - and the mature ones also - from a point of view where we can make an investment in to those markets and stimulate traffic."
Before investing in a new leg of the network BT must first be convinced that there is an adequate volume of traffic ready to buy into the service once it is in place.
"So far the initial investment in the GMN has included Los Angeles, Delhi, Mumbai and Chennai. This has allowed us to generate a lot of business from the Asian channels for transmission into both Europe and the US."
The presence of the BT GMN in the Middle East will also offer a new route of transport for content from the Middle East to flow into Asian and Western markets. As well as opening up to new audiences it could also provide easier collaboration between content creators in the region and their colleagues on the sub-continent.
A similar intra-regional network will be in place to service domestic demand. Formosa also reveals that BT Media and Broadcast are currently in talks with UAE telcos du and Etisalat regarding the construction of the Dubai PoP.
"We will follow up the Dubai installation with a PoP in Cairo. There is a lot of post-production activity there. On top of that, we would then look at bringing the BT Mosaic offering to the Middle East market."
The BT Mosaic content management platform and similar enterprise products currently represent the bulk of the company's concerns in the region as it looks to start broadcasters, content producers and media distribution firms on the BT path, gradually ramping up the services each client uses, a process that has already begun with Showtime.
"The initial deal we had with Showtime was for MPLS client services. The deal basically includes some file transfer and unified communications capabilities," says Formosa.
The earlier deal with Showtime, which was signed in August last year, will link the company's operations in the UAE, Saudi Arabia, Jordan, Egypt and the UK.
"When we put the PoP into Dubai some of those client services will be upgraded to carry video, and on the back of that, we've had further discussions about content management - how it's stored; quality control; managing disaster recovery and so on," states Formosa.
"We have been in discussions for nearly eight months with several clients including Showtime, ARY, Al Jazeera and ART about their ambitions.We have been consulting with Al Jazeera about supplying their network infrastructure and we recently entered discussions with them about supplying some added value. Currently, the Arabic and English channels have separate content management so we may be able to help them to integrate these offerings.
These talks are cursory. More generally, we have been taking the approach that primarily we can offer MPLS networking, and then live video or pre-recorded video over the network. Once the discussions with the broadcasters are finalised and the PoP is installed in the region, the local media companies will be able to ‘turn the handle', add value for themselves and bring some business to BT."
Ultimately, once the PoP has been installed, BT will be looking to sign as many clients as possible to its Mosaic platform, having already invested around US $25million in its development. Formosa describes Mosaic as a "software as a service solution", with a heavy emphasis on saving money for its users, as well as helping them to generate new revenues on new delivery platforms.
"With advertising revenues diminishing and a greater emphasis on cost-cutting the mosaic platform becomes an attractive proposition. It allows stations to ingest once and then format to numerous platforms, IPTV or mobile TV depending on what that client is trying to achieve," explains Formosa.
With a background in broadcast infrastructure, Formosa is in a good position to critique the region's existing distribution networks and what effect these could have on the development of emerging platforms - such as IPTV - in the region.
"I believe the infrastructure is quite poor and I think it will take a little time before IPTV becomes a viable business," says Formosa. "I believe the answer depends on what each particular operator is trying to achieve in that particular market. Each telco will have to source content and that content has to be rights free for that particular region.
Broadcasters offering IPTV-style services in the Middle East predominantly do so via a DTH model. So although they have access to the content, they need to leverage other people's networks to gain the interactive elements."
With IPTV deployments yet to gain much traction, the prospect of the necessary investment in this infrastructure and the undertaking of the additional risks associated with its deployment, could be too much for the industry at present. This is heightened by the lack of clarity in financial forecasts through 2009.
However Formosa describes what he sees as a "willingness to invest" within the region and acknowledges that business decisions tend to be made for the right reasons in most companies rather than investing as a result of peer pressure from competitors.
"If your revenue or profitability is under threat you have to do something and decisions have to be made at a board level as to whether forging ahead with a new service is the right thing to do. I'm not sure whether operators are being forced to adopt these new technologies or whether it is a case of there being some champions and some people sitting on the fence waiting to see if it works."
This is not unusual in an industry that has found it difficult to predict the tastes and habits of consumers.
"No one forecast the incomes that could be reaped from SMS messaging," Formosa notes. "Who thought the sale of ringtones would outstrip those of CDs? I think the key issue is that if it works in one region, can that success then be replicated in other markets? All of this will depend on whether those pioneering companies continue to have the money to spend to drive the market forward."
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