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Telcos Order $10M of Modulus Video HD Gear

With telco operators across the country looking to video services as a way to keep current voice customers and expand revenues, companies that make HD-related TV gear are beginning to cash in.

Modulus Video, a maker of MPEG-4 encoder equipment, has been awarded more than $10 million of HD-over-IPTV related orders in recent months.

“HD is moving like a freight train,” says Bob Wilson, Modulus Video CEO. “Consumers want HD displays and now there is real money being spent. It’s no longer a theory or promise.”

Wilson says he can’t elaborate on who the telco customers are because telcos are fearful of tipping their hand to cable competition. The use of MPEG-4 compression, which will let telcos distribute HD channels in half the amount of bandwidth cable operators will need, could give telcos an advantage in the HD market.

“High-quality HD images take about 18 Mbps and there are a lot of compromises being done by satellite and cable operators to get that rate down to 10 or 11 Mbps,” says Wilson. Telcos, however, will be able to distribute an HD channel at 11 Mbps without any compromises.

While the cable market is looking closely at ways to distribute content in MPEG-4 they need to depreciate their current MPEG-2 HD boxes before they can move to MPEG-4. DirecTV, for example, is using MPEG-4 to distribute local-into-local HD but it requires the customer to buy the box.

“The cable industry is a tough spot,” says Wilson. “They need to see a bigger move in the set-top box market before they can start deploying MPEG-4.”