DirecTV: Combining Pay-TV with Internet Services to Win More Market Share

DirecTV is an American direct broadcast satellite broadcaster in El Segundo, California. It provides television and audio services to subscribers. Recently, ZTE Technologies interviewed Alessandro Defilippi Elias, head of wireless network of DirecTV in Peru. He talked about DirecTV’s TD-LTE project, development strategies and differentiated services in Peru. He also shared with us his expectations for the future cooperation between DirecTV and ZTE.

Q: How would you describe Peru's pay-TV market?

A: Peru’s TV market is still growing. Because Peru is a developing country, most of the services are still developing. So there are many opportunities for DirecTV and other companies in this particular segment in Peru.

Q: Could you tell us about the milestones of your project?

A: We are deploying our sites and hoping to put our first site into operation soon. We are hoping to have our first customer around August. Probably by the end of this year, we will have 200 sites on there. And by the end of 2016, we will have 400 in eNodeBs for service in Peru.

Q: Could you tell us your TD-LTE plan? What do you want to achieve with the current TD-LTE project?

A: Right now, we are deploying TD-LTE network over band 40 of LTE. First we have internet services for new customers and our DirecTV customers. What we want to achieve is mature networks across the country. We hope to be not only in the capital but also in the main cities of north and south Peru, probably by the end of the year. We will continue the second and the third phase next year. So we are able to offer internet and pay-TV bundles to our customers. Maybe in the near future, we will also offer voice services, telephone over the same network.

Q: What are the challenges for DirecTV to deploy TD-LTE network?

A: One of the biggest challenges is the frequency. We are only using what we have, and we don’t have that much frequency in Peru. So we are trying to add more spectrums in order to provide good services. That would be the biggest challenge.
Our second challenge is infrastructure. We are trying to build networks as fast as possible. The towers will be our equipment.
So the main challenges for us right now are the spectrum and infrastructure.

Q: Network optimization is a key part of TD-LTE network construction. What steps are you taking to enable network optimization?

A: For network optimization, the first step is having a basic configuration over the defined clusters. Once we have the defined clusters, maybe we can use some features to control interference. Our main problem is that we don’t have much spectrum, so our capabilities of frequency reuse and configuration are limited. Since resisting interference is a big issue for us, we have to be very sure about the sector configuration, carrier configuration and inter-cell distance of our sites, and we are trying to accomplish optimization through some features that can help us mainly control the interference.

Q: The pay-TV market is highly untapped in the Latin American region. What are DirecTV’s development strategies for market penetration?

A: Actually, the idea is to combine pay-TV and internet services; that’s why we have LTE network deployment. By giving a bundle to customers, offering both internet and TV as one service, we can still keep growing without any problems. Now, all the tendencies are directed towards having both services, instead of only one service of either pay-TV or the internet.
As you say, the TV market is still untapped in Latin America, so we have a lot of room to grow. The penetration is still in the low end of services, but we think the way to monetary gain is combine services, in this case, TV and internet.

Q: Could you elaborate on DirecTV’s differentiated services for both high-end and low-end customers in Peru?

A: DirecTV in Peru is more considered a high-end service. However, we also have low-end customers. For the high-end customers, we have a really good quality service with really good equipment for HD DVR to record HD programs, so our high definition TV is the main difference between us and other companies. High-end usually entails higher cost, but our equipment and services are of much higher quality than those of the competition.
For low-end customers, we are focusing on the pre-paid services. Low-end customers are pre-paid while the high-end customers are post-paid. Both of them have good channel quality and a good service quality. However, the payment method is the big difference between high-end and low-end customers.

Q: What differentiates your TV service from other operators’ TV services?

A: I think the difference is the quality of HD signals, the standardization of signals, and the DVR equipment we use. Our products and services are really high-end.

Q: DirecTV has its own audience network and sports networks. How can these networks help to increase the number of subscribers?

A: As I mentioned before, the sports network is a huge benefit for DirecTV customers. We will grow not by having more channels or different quality programs but through our services. The main service is not only quality (HD TV) but a combination of this and internet. We will try to have an OTT service for online streaming channel.

Q: What do you think about the relationship between pay-TV operators and mobile operators?

A: Actually, I don’t know the way how mobile operators operate, but for internet services, it is a really good cooperation between both services, because DirecTV is a major pay-TV company, right? All the content for programs, shows and sports, we are ready to have them. We are able to deploy quality transfer network by internet or only assign intranet services. We will be able to connect our customers to our database or core networks, where we have all the program information. Therefore, our customers can stream the information or video-on-demand service whenever they want. I think it is a really good opportunity to bundle TV content using the internet connection.

Q: How would you assess ZTE’s solutions and services? What are your expectations for future cooperation between DirecTV and ZTE?

A: ZTE right now is our major partner. ZTE has 100% of our access network and 100% of our microwave network. ZTE is a really important partner for us. We hope to have a long-term relationship because up to now, we have been working pretty well on this. We hope that ZTE’s experience can help us have an optimized network. We are sure that we can partner in the future while ZTE keeps developing new products to help us build our network the way we need and to give quality services for our customers.

Q: What is your vision for DirecTV over the next few years?

A: The main objective of DirecTV now is getting more market share in Peru for pay-TV services and for internet. We are focusing on growth to have more customers in the next few years by giving both TV quality services and quality internet service.