IPTV/cable TV networks. Net Insight products truly deliver 100 percent Quality
of Service with three times improvement in utilization of bandwidth for a
converged transport infrastructure. Net Insight’s NimbraTM Platform is the
industry solution for video, voice and data, reducing operational costs by 50
percent and enhancing competitiveness in delivery of existing and new revenue-
generating TV and video services. Our customers provide public media services
over Net Insight products to more than 100 million people in more than 25
countries. Net Insight delivers the worlds most efficient and scaleable optical
transport solution for media networks, digital terrestrial TV, mobile TV networks
and IPTV/cable TV networks. Net Insight products truly deliver 100 percent
Quality of Service with three times improvement in utilization of bandwidth for
a converged transport infrastructure. Annual Report 2007
2 Net INsIght aNNual report 2007
1997–2007: Net Insight 10 years inbrief Net Insight Information/Annual General Meeting
Annual General Meeting
the annual general meeting will be held at 10:00 a.m. on thursday april 10, 2008 at Net Insight’s premises in Västberga. shareholders who wish to attend and vote at the annual general Meeting must be entered in the share register kept by the securities register Center (VpC aB) on april 4, 2008 and register with the Company no later than 4:00 p.m. on april 4, 2008 by one of the following methods:
telephone +46 (0)8 – 685 04 00 Fax +46 (0)8 – 685 04 20 e-mail info@netinsight.net
Mail Net Insight, Box 42093, 126 14 Stockholm In order to be entitled to attend, owners of shares registered with nominees must temporarily re-register the shares in their own name. a request for such registration must be made to the administrator of the shares in sufficient time prior to april 4, 2008.
Dividend
the Board proposes that the agM resolve that no dividend be paid for the 2007 fiscal year.
Financial information 2008 annual general Meeting: April 10 Interim report January–March: May 9 Interim report January–June: August 28 Interim report January–september: October 23
Net Insight’s financial information is available in both swedish and english.
the reports are most conveniently available on the Net Insight web site www.netinsight.net. reports can also be ordered by e-mail:
info@netinsight.net, or by telephone +46 (0)8 – 685 04 00.
Net Insight in brief. Net Insight’s products enable trans- port of video-rich services in customer networks without loss of quality. Optimal use of network capacity allows new revenue- generating video services such as HDTV, digital TV, and video-on- demand, all of the highest quality, to be launched and delivered simultaneously with ordinary telephony and data traffic. As a rule Net Insight’s products offer customers lower capital expenditu- res, shorter payback periods, and lower operating costs than ri- val products. Net Insight’s sales mainly take place in Europe, Asia, and North America. Its customers are TV networks, broadcast and media companies, cable TV providers, network owners, and telecom operators .
Contents
3 Highlights of the year 4 Statement from the CEO
6 Vision, business concept, objectives and strategies
8 Market and trends 12 Nimbra at the customer 14 Market areas
17 Partners
18 Technical platform 20 Employees
22 The Net Insight share 24 Five year summary 25 Administration report 30 The Group
32 The Parent Company
34 Accounting principles and notes 43 Auditors’ report
44 Board of Directors 45 Corporate governance and board activities 46 Management 47 Glossary
1997–2007: Net Insight 10 years inbrief
HIGHLIGHTS OF THE YEAR
2007 in brief
l sales rose 70 percent to seK 228.8 million (134.8).
l Net income improved significantly to seK 34.0 million (–10.2).
l positive cash flow of seK 50.6 million (–15.2).
l gross margin of 70.8 percent (70.5).
l selected to supply to Korea telecom’s national network for multimedia services.
l selected to supply to media networks in the united states, including htN’s network for tV broadcasts from sports venues.
l shipments commenced during the year under the contract with Beijing olympic Broadcasting (BoB).
l Continued deliveries to Norkring and the Norwegian digital terrestrial tV network, as well as upgrades of core networks to the high-capacity Nimbra 680 switch for KpN in the Netherlands and BsD in Denmark.
Strong market demand for more capacity and higher quality in communication networks around the world continued to spur business with increasing sales, improved financial performance and a continued strong gross margin.
key figures 2007 2006 2005
Net sales MseK 228.8 134.8 90.9
operating earnings MseK 32.6 – 11.4 – 60.8
Net income for the year MseK 34.0 – 10.2 – 59.6
earnings per share seK 0.09 – 0.03 – 0.17
gross margin % 70.8 70.5 62.9
equity/assets ratio, % 69 70 77
shareholders’ equity per share seK 0.49 0.37 0.40
average number of employees 93 80 70
1997
startup of Net Insight; key individuals recruited to com- mercialize DtM technology.
reVeNue grOss MArgiN
CAsH fLOW
-100 -80 -60 -40 -20 0 20 40 60
07 06 05 04 03 Msek
Msek % Msek
-100 -80 -60 -40 -20 0 20 40
07 06 05 04 03
NeT iNCOMe
0 50 100 150 200 250
07 06 05 04
03 0
20 40 60 80
4 stateMeNt FroM the Ceo
STATEmENT FROm THE CEO
Net Insight experienced its strongest year to date in 2007. We reached our goals and demonstrated our international competi- tiveness. We increased sales by 70 percent and maintained a high gross margin of 70.8 percent. Our full-year results show a profit for the first time and we won deals with several new customers in new countries during the year. In 2007 we had done business in 21 countries and revenues were up in all major markets in the US, Europe and Asia. We also signed our first contract on the African continent.
At the same time our established customer base has genera- ted a substantial volume of follow-up business; all of our cur- rent customers bought equipment for network expansion during 2007. Repeat sales to existing customers now constitute a more stable basis for future business.
Deliveries to Norkring continued during the year and the first phase of the Norwegian DTT network opened in Septem- ber.
Deliveries also commenced during the year under the cont- ract with Beijing Olympic Broadcasting (BOB) for the contribu- tion network connecting arenas during the summer Olympics in Beijing.
SHARP INCREASE IN VIDEO TRAFFIC
The market developed extremely positively and in exactly the right direction for Net Insight. The single strongest driver in the communications industry is the huge surge in video traffic. At Net Insight we expected this trend and have therefore focused on and invested in it for several years. Network owners and ope- rators all over the world are mustering their strength in prepa- ration for what could be a ”video explosion,” at the same time as new business models and supplier constellations are forming – all with the purpose of maximizing opportunities for new and growing business in video and real-time critical services.
TRANSPORT OF HIGH-QUALITY VIDEO
Our real strength is our ability to deliver video transport solu- tions of the highest quality to broadcast and media companies, telecom companies, distributors of digital terrestrial TV, and mobile TV operators. Net Insight’s Nimbra platform is easy to install, extremely cost-effective and it is scaleable, while at the same time guaranteing 100 percent quality of service. Our custo- mers have confirmed the unique advantages of our products:
highest bandwidth utilization, unsurpassed multicasting, as well as its integrated voice, data and video interfaces. All of this in one box, for an extremely strong offering chosen by more and more customers to ensure the growth and success of their busi- ness operations.
IMPROVED CUSTOMER OFFERING
In 2007 we launched a new, powerful technology that we call Time Transfer. This function, which is available with the Nim- bra 360 and 680 series, offers a brand new method of GPS-in- dependent synchronization for communication networks. Net- works around the world are currently synchronized with atomic clocks and the time is distributed through the GPS system. The television and telecommunications infrastructure is vital in all countries and many are now searching for reliable, cost-effective alternatives to GPS. Time Transfer and its functional advantages contribute substantially to our customer offering and our custo- mers have expressed considerable interest. We now know that we offer an extremely competitive product platform and that we are in the ”right market with the right product at the right time”.
CONTINUED GROWTH IN ALL MARKETS
Revenues by market segment in 2007 were as follows: Broadcast
& Media Networks (BMN) 61 percent, DTT & Mobile TV Net- works 38 percent and IPTV/CATV 1 percent. The geographic
1998Net Insight is selected as ”one of the top 25 hot startups of 1998” and wins its first customer, Vasa läns telephone.
distribution of revenues shows a surge in North America, which accounts for 18 percent, extremely strong growth in Europe, which accounts for 77 percent and an encouraging first year in Asia, which accounts for five percent and also delivered several important new business transactions.
Today we can count many telecom operators as customers.
Our next step will be to take our platform to the large-scale IPTV/
CATV investments that will be carried out in many countries.
Digital terrestrial TV networks are being installed all over the world, both regionally and nationally. Many countries have yet to take this step, representing tremendous business potential for Net Insight. In 2007 we delivered equipment to this type of net- work in 11 countries and our successful DTT projects are indeed encouraging.
GROWING BUSINESS THROUGH EFFECTIVE PARTNERSHIP Our growth strategy involves a focus on indirect sales by wor- king closely with 26 carefully selected business partners. Our first fiscal year in Asia represents a successful example of how rapid market penetration can be achieved through effective partner- ship. Obviously Net Insight always supports its partners during business negotiations and procurement phases. In 2007 we saw several good examples of truly partner driven business generation.
Net Insight’s products complement and strengthen our partners’
own offerings and services – strengthening competitiveness in the process, which in turn provides increased revenues for both Net Insight and our partners.
It is my firm conviction, and we see clear signs supporting this belief, that Net Insight’s products beneficially complement offerings from other suppliers and partners. This relationship bo- des well for effective partnerships in a market characterized by a growing number of customers who choose end-to-end solutions with associated services.
FINANCIAL STRENGTH
Our favorable financial performance in 2007 with a positive cash flow of SEK 51 million, net income of SEK 34 million and cash and cash equivalents at year end of SEK 128 million create the platform for our organic growth. We allocate our resources according to a carefully formulated plan with an emphasis on sales and operations, business development and the continued development of the Nimbra platform.
Net Insight’s dedicated employees worked extremely hard in 2007 and collaboration with the board of directors and share- holders was very productive. I would like to take the opportu- nity at this time to thank everyone involved.
We now have a platform that is on the cutting edge and our most recently launched products and functions have sold very well in 2007. We offer a complete multiservice platform for voice, data and video on which network owners can build and run competitive business models.
In 2007 we have taken a significant step in the right direc- tion in all regards and it is at the same time with great satisfac- tion that we at Net Insight enjoy highly positive feedback from our existing customers. All in all, this situation is very encoura- ging for the future.
1999Net Insight is listed on the stockholm stock exchange. Nimbra one is selec- ted as one of the ”50 hot products of 1999”.
Fredrik Trägårdh
President and Chief Executive Officer.
6 VIsIoN, BusINess CoNCept, oBJeCtIVes aND strategIes
Since its inception in 1997 Net Insight’s efforts have been based on the vision that tomorrow’s network traffic will be dominated by various video applications such as TV, pay-per-view, video-on- demand, video conferences and music videos. These services, which demand considerably increased network capacity with 100 percent quality of service, are the driving force behind many of the net- work rollouts that have been initiated or will be initiated in the coming years.
NET INSIGHT ADDrESSES THrEE MAIN MArkETS THAT DEMAND HIGH quAlITy FrOM THEIr MEDIA TrAFFIC:
l Networks for Broadcast and Media – Television and media companies that send large amounts of video traffic within and between different production units for studio editing, as well as network operators and satellite companies that build network solutions for this growing segment.
l Networks for digital terrestrial TV and mobile TV – broadcasters and opera- tors that build new distribution networks in the transition from analog to digital terrestrial television. This segment also includes the rapidly growing market for mobile TV.
lNetworks for cable TV and iPTV distribution – Telecom and cable TV opera- tors that want to be able to offer households and businesses telephony, data and video services in a bundled solution.
BUSINESS CONCEPT
Net Insight’s business concept is to develop, market and sell pro- ducts to public and private networks to transport high-quality and media-rich traffic. Net Insight’s products offer customers the opportunity to produce new revenue-generating services, while lowering capital expenditures and operating costs when the same platform can handle all services. Net Insight offers either a comprehensive or a focused selection of products and services, depending on the needs of the individual customer. Net Insight generates revenues through the sale of products and li- censes. In addition to direct sale revenues, current revenues are generated through support and maintenance agreements with customers. Revenues are also generated through the sale of in- stallation services and training.
TARGET FULFILLMENT
Net Insight did not provide any detailed earnings or sales fore- cast for 2007; it indicated only the expectation of a substantial increase in sales. With sales of SEK 229 million, equivalent to an increase of 70 percent, net income of SEK 34 million and a positive cash flow, 2007 was a strong year. As expected, the ma- jority of sales derive from the professional media industry (net- works for Broadcast & Media), which at 61 percent is still the largest market segment. Net sales of software and services such as courses, service and support surged 96 percent, significantly exceeding internal targets. Indirect sales increased by 40 percent during the year, which was in line with both the target and the partner strategy.
VISION, BUSINESS CONCEPT, OBJECTIVES AND STRATEGIES.
twintin-circuit launched. Break- 2000
through order from media industry and metro network installations.
geografisk fördelning sALes By regiON
asia, 6 % North america, 18 %
europe, 76 %
COMMUNICATED OBJECTIVES FOR FISCAL YEAR 2008 The Board of Directors is satisfied with the company’s perfor- mance in 2007 and is confident that the positive developments will continue in 2008.
strategies
In order to achieve its objectives Net Insight will apply the following strategies for distribution, marketing, products, deve- lopment and organization during the coming year:
DISTRUBUTION AND MARKETING
– Continue to geographically expand in the prioritized segments Broadcast Media Networks and DTT into new markets in Europe, Asia, Eastern Europe and the Middle East.
– Strengthen the company’s position in professional media and broadcasting by expanding into adjacent segments for distri- bution of video and media to companies and private individu- als through marketing initiatives focused on new and existing customers with the support of the new Nimbra 300 and Nim- bra 600 product lines.
– Expand the company’s sales force for direct sales and marketing initiatives aimed at selected customer segments.
– Establish additional partnerships with suppliers in distribu- tion and system integration for local support in
geographically remote markets.
– Increase sales through commercialization of the new unique Timer Transfer function.
PRODUCTS AND DEVELOPMENT
– Further develop existing solutions and products in close col- laboration with the market.
ORGANIZATION
– Strive to achieve a decentralized organization in which the em- ployees have great insight into and influence on the company’s objectives and performance.
– Continue to develop employee skills and expertise.
– Build long-term commitment among the company’s employ- ees through competitive reimbursement systems and stock option programs.
OVErArCHING OBJECTIVES
l Net insight’s objective is to become a leading global supplier of network products for media-rich traffic.
l Net insight will grow faster than the market average, with good profit- ability.
l Net insight will generate return on equity and earnings per share to make the company an attractive investment for current and future share- holders.
2001order from the Dutch network operator KpN. the new Nimbra 210, Nimbra 290 and Nimbra 291 switches are launched.
8 MarKet aND treNDs
mARKET AND TRENDS
The media and telecom markets are converging, resulting in major changes in infrastructure and business models. At the same time, the proportion of video and media services is rising sharply, in both public and private networks, placing great demands on increased bandwidth and 100 percent quality of service.
NEW VIDEO AND MEDIA SERVICES INCREASE THE NEED FOR BANDWIDTH
Today’s telecom operators face strong competition with lower margins in both telephony and broadband services. In order to increase revenues and – even more importantly – reduce the number of customers who switch to competitors (”churn”), telecom operators are introducing new TV and video services offered in attractive packages bundled with the other services. These new services change the requirements for broadband networks.
At the same time the number of broadband users continues to rise; this increase was 24 percent in the OECD countries between June 2006 and June 2007. Add to this scenario the new popular time-critical broadband services such as YouTube, radio and music services, IP telephony and the entire gaming industry. Clearly far more network capacity is needed, while the demands for 100 percent quality of service are essential for delivering these services with an acceptable quality, something today’s internet is unable to achieve.
These developments create excellent opportunities for Net Insight which, with its world-leading technology for network solutions, has extensive experience and understan- ding of the customer demands for cost-effective media and video transport solutions.
Meeting the surging demands for bandwidth and quality requires major invest- ments in networks. According to ABI Research (January 2007), cable TV alone will require investments of about USD 80 billion in network expansion over the next six years. Thanks to its effective utilization of bandwidth with retained quality, Net Insight’s media transport solution can significantly reduce investment costs to handle these future network requirements.
Net Insight has an extremely strong solution for digital terrestrial TV. Analysts at ABI Research estimate that the addressable market for Net Insight’s type of products is about USD 100 million in 2008 on a global basis. With Net Insight’s strong technical platform and the reference customers acquired over the past 24 months, there is great potential to increase market share in this segment.
0 20 40 60 80 100
0
06 07 08 09 20
40 60 80 100
%
0 50 100 150 200 250
In 2009 video & tV is expected to make up 90% of all broad- band traffic.
= Nimbra 340 For production and distribution
= Nimbra 680
For transport = Nimbra 1 Satelite upplink
ETH
NE WT OR K
NIMBRA FIBER NW
DATA VOICE TV VIDEO
=
=
=
ETH
NE WT OR K
NIMBRA FIBER NW
DATA
VOICE TV
VIDEO
= = =
Digital Video Broadcast Live Events
Studio Production
Content Providers
Satelite Up-link
IPTV/CATV
= Nimbra 340/360 For production and distribution
= Nimbra 680
For transport = Nimbra 1 Satelite upplink Digital Video
Broadcast Live Events
Studio Production
Content Providers
Satelite Up-link
IPTV/CATV
NE WT OR K
= Nimbra 340/360 For production and distribution
= Nimbra 680
For transport = Nimbra 1 Satelite upplink Digital Video
Broadcast Live Events Studio
Production Content
Providers
Satelite Up-link IPTV/CATV
NETWORK
= Nimbra 360 For production and distribution
= Nimbra 340 HD
NIMBRA
TRANSMISSIONS- LÄNKAR 34 Mb 45 Mb 155 Mb 622 Mb 1 Gb 2,5 Gb 10 Gb
DATAVIDEO TV
VOICE AUDIO
Classes ofIP service
Mobile-TV
DVB-H / MediaFLO
Nimbra Vision
Network Operations Centre
Live Events Studio
Production
Content Provider/
play-out
Satelite
Up-link IPTV/CATV
productionPost Production company
DVB-T / ATSC / DTT
DMB-T / ISDB-T
Enterprice video conference
Nimbra 680 Nimbra 680
Nimbra 680 Nimbra 680
Nimbra 680 Nimbra 340
Nimbra 340 Nimbra 1
Nimbra 360 Nimbra 360 Nimbra 340 HD
Enterprice video conference
Nimbra 360
METRO CORE
Nimbra 340 Nimbra 360
Nimbra 340
Improved bandwith utilization
100 % quality of service
Broad know how in network and media
HDTV
Improved picture quality through HDTV
More channels through digitalization
Mobile TV on laptop and cellphones
PRODUKTION & KONTRIBUTION DISTRIBUTION
Increases requirements on bandwith and quality
Net Insight supports convergence
Picture quality and mobility Net Insight value
drives demand proposition
TVpå Laptop
Ökar NV- utnyttjande
100 % QOS
Brett kunnande Digitalisering
HDTV
Ökar kraven på nätverkets bandbredd & kvalitet
Net Insight möjliggör konvergering
Bildkvalitet och mobilitet Net Insight erbjuder
Driver efterfrågan
n Video n Data/ Voice
2002alphatron becomes new partner. Net Insight gains a foothold in a new segment – triple play. New products and multicast support are introduced.
Consumption of video and other media services is undergoing explosive growth and placing new demands on networks.
This trend opens opportunities for Net insight, both in its core segments, as well as with the strengthened product portfolio to expand into new adjacent segments for video transport and media distribution.
10 MarKet aND treNDs
TV IN THE CELL PHONE MOVES FROM PILOT TO COMMERCIAL ROLLOUT
TV can now be broadcast to cell phones, and already, early 2007, 70 pilot projects were running and several commercial roll-outs had started. ABI Research estimates that in 2012 there will be 462 million mobile TV users. Frost & Sullivan’s report ”DVB-H Technology – Market and Potential Analysis” expects the total market for services over DVB-H to be worth over USD 2 billion in 2010, declaring this to be one of the strongest growth segments.
About ten standards for mobile TV broadcasts are being tested around the world, the largest of which are DVB-H, MediaFLO, ISDB-T and DMB. Net Insight’s equipment works re- gardless of the standard chosen.
In order to cost-effectively roll out mobile TV and reach the market faster, mobile ope- rators often collaborate with the national operators for terrestrial TV. With its successes in the market for digital terrestrial TV networks in recent years, Net Insight is well-positioned for the network expansion of mobile TV. Mobile TV requires exact time synchronization by transmitter stations, which usually rely on GPS receivers. Net Insight’s unique Time Transfer function allows GPS-independent synchronization, which reduces costs and vulne- rability.
The mobile TV segment will undergo strong growth over the next few years, opening a new market window for Net Insight with great potential.
DIGITIZATION AND HDTV REQUIRE MAJOR INFRASTRUCTURE INVESTMENTS The United States, Western Europe and parts of Asia have already switched their media production to digital format and now face major investments to upgrade their infrastruc- ture for HDTV, which generally requires about five times more capacity than standard TV (SDTV).
HDTV along with increasing percentage of on-demand services also drives the expan- sion of broadband and TV distribution networks. Improved compression standards, such as MPEG 4, now commercially available, only partially helps stem this need for expansion.
Nevertheless, the total net increase of video traffic is considerable and will continue to climb sharply, giving Net Insight a stronger position in these types of solutions.
Digitization also involves opportunities to distribute media services more easily over public data and telecom networks, which opens up competition with respect to offering TV and media services to end customers. In addition, more and more platforms can receive me- dia content: computers, televisions, cell phones or game consoles. Different platforms have different bandwidth requirements, but they all require excellent transmission quality. If the quality cannot be guaranteed, users will not be willing to pay for the services.
VIDEO SERVICES
Net Insight has a unique combination of expertise in optical networks, the media and the broadcast industries. The convergence now taking place in these markets creates many new business opportunities. According to IABM, the total equipment market for the media in- dustry is eleven billion USD, about 7 percent of which is for communications equipment in production. The total equipment market for optical networks is about six billion USD (Gartner 2006). Net Insight focuses on three main segments: the professional broadcast and media market, distribution networks for digital terrestrial networks (DTT) and mobile TV, as well as transport network solutions for IPTV and CATV. Large growth opportunities can also be found in adjacent segments such as networks for camera surveillance, telemedicine, video conferences (telepresence) and distance learning.
2003New important customer references when eBu and WDr build media networks with Nimbra. triple play installation with Nimbra in alaska. Institutional ownership strengthens the company.
NuMBer Of iPTV users
0
07 08 09 10 11 10
20 30 40 50 60 70 80 Milj
n asia n europe n North america n rest of the world
The united states, Western europe and parts of Asia have already switched their media production to digital format and now face major investments to up- grade their infrastructure for High Definition TV (HDTV), which generally requi- res about five times more capacity than standard definition TV (sDTV).
12 NIMBra at the CustoMer
NImBRA AT THE CUSTOmER
HTN
Net Insight scores a touchdown with HTN and brings HD sports into american homes.
The deal with leading sports distribution network HTN signifi- cantly raises Net Insight’s visibility within the US media industry and secures Nimbra as the solution of choice for high-quality, high-definition live broadcasting.
To say that Americans enjoy sports is an understatement – they love them and events like the annual Super Bowl game typically attract a bigger television audience than any other televised event throughout the year. Baseball, basketball, ice hockey and football equal big business in the US and therefore comprise a large and profitable chunk of the broadcasting and media industries.
The demand for live event broadcasting is surging and with HD screens rapidly becoming common features in American ho- mes, the demand for HD sports programming is soaring. Bet- ween 30 and 40 percent of all professional sports events are now being broadcast in HD and this share is growing fast.
HTN Communications and its predecessors, which have serviced the sports broadcast and cable marketplace with trans- mission facilities and services since 1956, is deploying a network to transport sports programming using Net Insight’s Nimbra platform. The network will significantly increase bandwidth and the service offering, including multiple HDTV and SDTV video channels from the venues.
Korea telecom, KT
Nationwide multiservice network in Korea.
KT is South Korea’s leading communications service provider and has been the nation’s frontrunner in the development of the communications business since its privatization in 1982. Drawing on cutting-edge technology, KT has played a key role in turning South Korea into an IT and electronics giant on the world stage.
To further extend its technological position, KT recently de- ployed a multiservice media network based on over 100 Nimbra switches from Net Insight. The combined distribution and con- tribution media network will initially be used by KT client Seoul Broadcasting System (SBS) to distribute media content between its Seoul headquarters and nine local TV stations across the coun- try. The traffic comprises uncompressed High Definition TV (HDTV) and Standard Definition TV (SDTV) for DTT, com- pressed video for mobile TV distribution, FM radio channels, digital audio services and various types of data traffic.
Compared with competing solutions, the Nimbra platform offers better bandwidth utilization, which allows broadcasters to distribute more digital television channels and, consequently, boost revenues from being able to offer a broader supply of hig- her-quality content. As consumer demand for HDTV increases, transport solutions that can optimally use bandwidth become a crucial success factor.
Jeoung Ha-Myung, head of support at KT, explains why the company chose Net Insight’s Nimbra-platform.”We take great pride in being the world’s leading broadband operator. We take even greater pride in combining our industry-leading know-how with partners and operators around the globe to create networks that push technology and solutions to even higher levels. Net In- sight fits well in this context.”
The order was received in cooperation with Net Insight’s partner Sanam Technology and systems integrator Yukyung. Be- fore choosing Nimbra, KT evaluated various solutions and tested Nimbra’s performance. KT chose the Nimbra platform because of its multiservice capabilities, scaleability, low latency and its compatibility with a large number of different media content standards.
KT will make the most of the multiservice transport capability of the Nimbra platform by combining HD-SDI, SDI, ASI, AES/
EBU, IP/Ethernet, and E1 services over 2.5 Gbps high-capacity transport links.
The Nimbra platform also offers one plus one redundancy with automatic switching and rerouting in case of shutdown. The Nimbra Vision management system makes it easy to manage and monitor the network.
2004t-systems chooses Net Insights Nimbra-plattform for digital terrestrial tV and the swedish space agency orders equipment for distribution of IptV channels. Constellation ventures buys a large equity stake in Net Insight and Nimbra 340 is introduced.
The media and communications industries are undergoing constant change. Markets grow and evolve, new technological solutions provide new prospects and at the same time the competition intensifies.
We are therefore extremely proud when our customers say that Net Insight is the best in its class!
”Broadcast clients have shown a trem- endous desire to take advantage of the reliability and quality benefits of a Nimbra network.”
Since HTN’s fiber optic network carries a high percentage of all US professional sports broadcasts — including over a thousand major league baseball, basketball and ice hockey events annually
— the Nimbra solution, and the advantages of using DTM tech- nology for high-quality media transport, will be powerfully posi- tioned at the heart of America’s broadcasting industry.
The deal effectively carries the Net Insight brand across the professional sports venues in the US and among important execu- tive decision-makers. The message is that Nimbra enables broad- casters to run audio, video, file transfers, VoIP and communica- tions over a single network.
Through the launch of the new network, HTN can demon- strate the benefits of using Net Insight’s technology for high-qua- lity media distribution.
”Broadcast clients have shown a tremendous desire to take advantage of the reliability and quality benefits of a Nimbra net- work,” says Joseph Cohen, Chairman and CEO of HTN Com- munications. ”HTN’s new networks will expand upon the exis- ting selection of services while vastly improving the current fiber optic transport network. We look forward to continuing our tra- dition of providing broadcasters with reliable live broadcasts in the evolving world of HD television.”
Nimbra’s multiservice capabilities and ability to handle dyna- mic, simultaneous transfer of different media types are particular- ly well suited to broadcasting sports events, as they commonly involve not just live video and audio but a sizeable load of data as well. After each game, a huge amount of data transfer of statistics covering shots on goal and other details is being transferred.
In addition, Nimbra opens up for conducting duplex servi- ces, enabling simultaneous sending and receiving from the venue, which lets the producer assemble footage from various sources.
Norkring
Norway goes digital with Nimbra
Norkring is Norway’s largest broadcasting distributor, delivering infrastructure and network services to large broadcasters. Owned by Telenor, Norkring is a very demanding customer that strives to operate the best contribution and distribution network for di- gital terrestrial TV and radio broadcast with maximum network utilization and flexibility.
As Norway prepared to start national digital broadcasting a few years ago, Norkring began to evaluate various digital terrestrial television (DTT) platforms. To further strengthen its leading po- sition, Norkring chose to build the new DTT infrastructure based on Net Insight’s Nimbra platform and in 2006 signed a frame agreement for delivery of over 600 nodes.
The demanding topography of the mountainous and sparsely populated country poses a challenge to network planning and con- struction. Since radio links are used in many areas, cost-efficiency and quality of service are important factors in choosing network equipment. Net Insight developed the Nimbra 360 multiservice ac- cess/edge switch, in effect a tailor-made solution for the DTT mar- ket and the first solution that integrates transport of DTT and Digi- tal Audio Broadcast (DAB) services with the unique Time Transfer
”We have found Net insight to be very customer-oriented and ’best in class’ in terms of project management, delivery precision and knowledge.”
Frank aarhus, Norkring
function. The Time Transfer function enables transfer of highly ac- curate timing information, eliminating the need for GPS receivers.
NEW BUSINESS OPPORTUNITIES
Nimbra 360 is a flexible and cost-effective transport solution for advanced multimedia services. The Nimbra platform offers high capacity backbone and plug-in modules for IP video and data, which alongside uncompressed video and audio services turns the network into a very powerful media contribution platform.
The multi-service transport capabilities are very attractive to Norkring’s various customer segments – the national television networks NRK, TV Norge, the local TV stations and NTV – which enhance their competitiveness in delivering existing and new media services. To broadcast companies, this means in- creased opportunities to offer subscribers and viewers additional channels at a lower cost.
Another reason why Norkring selected the Nimbra platform is that it offers the highest possible quality of service (QoS) and level of network utilization at a lower cost than any other trans- port network solution for broadcast and media networks.
”NET INSIGHT BEST IN CLASS”
Throughout the sales process and truly massive equipment rollout and installation phase, Norkring has been very satisfied with Net Insight’s expertise and professional project management.
”We have found Net Insight to be very customer-oriented and
’best in class’ in terms of project management, delivery precision and knowledge,” says Frank Aarhus, Manager Transmission Net- work Department at Norkring. ”They have an ability and flexibi- lity to match our tough rollout schedule and we enjoy a uniquely good client/supplier relationship.”
14 MarKet areas
NImBRA FOR FASTER AND LESS EXPENSIVE mEDIA PRODUCTION
Networks for broadcast and media. The transition to digital production and distribution of video has created new business opportunities for broadcasters and media operators. New optical transport networks also make it possible to optimize production and distribution of video. But large files and streaming HDTV place new demands for capacity and quality on these networks.
A COST-EFFECTIVE COMPLEMENT TO SATELLITES
The professional media industry places extremely high demands on quality. It must be possible to transport TV and video material with the highest quality between different production units for remote editing. Traditionally much of the traffic goes via satel- lite, which is both more expensive and compromises quality, since video traffic must first be compressed.
With a fiber-based solution, broadcasting and production companies can now exchange high-quality, uncompressed mate- rial in real-time, regardless of geographic distance and at a signi- ficantly lower cost. Traditional network solutions for media com- panies are often based on point-to-point solutions, which offer poor scaleability with respect to number of services and users. Net Insight’s solution creates a completely new way to build a media network, similar to a Media Internet. By being connected to the network you can reach any other point with the highest standards of quality and security.
DIGITIZATION AND HDTV REQUIRE MAJOR INFRASTRUCTURE INVESTMENTS
Most media companies have already switched their production to digital format and now face major investments to upgrade their infrastructure for HDTV, which generally requires about five ti- mes more capacity than standard TV (SDTV). Broadcasters and media companies plan to invest more than USD 2 billion in the transition to HDTV. Net Insight offers interfaces and solutions for both HDTV and SDTV in the same platform, enabling simp- le migration for customers. HDTV also drives capacity growth in broadband networks and TV distribution networks, which has meant that suppliers and operators in this segment have recogni- zed the substantial cost and quality benefits of Net Insight’s trans- port solution. Sports broadcasts in HDTV are a strong driving force behind the development, highlighting even the underlying
challenges of transporting real-time critical HD-quality video. In order for television viewers to fully experience the HD picture the material must be delivered through the entire chain without any loss of quality. Net Insight’s Nimbra platform provides a perfect fit – optimized to cost-effectively handle both video production and distribution.
ONE NETWORK FOR ALL SERVICES
In addition to superior transmission quality, one of the major ad- vantages of Net Insight’s transport solution is the ability to offer all services for video, data and telephony in a single product. In the past it was not possible to simultaneously transport a mix of 1.5 Gbps HDTV streams with 270 Mbps uncompressed SDTV, MPEG (ASI or IP), audio (AES-EBU or E1) and IP/Ethernet traf- fic. Studio equipment and servers are directly linked to standard connections in the platform, eliminating the need for expensive converters. Today broadcast and media companies worldwide use Nimbra-based networks for production and editing in real-time from central production centers, enabling broadcasters to achieve higher video quality, while using studio resources more efficiently and reducing production time.
The Nimbra platform also makes it possible to quickly and easily set up temporary transport connections when necessary - an important characteristic for TV and media companies when re- porting breaking news or sports events, providing them with great opportunities to quickly adapt their offering for their customers.
With efficient capacity utilization and superior quality of service, Nimbra is also an excellent solution for new professi- onal applications such as digital cinema or high-quality video conferences (telepresence). Net Insight’s Nimbra platform has also been chosen for many major sports events to transport top- quality television and video material from the arena to the studio for editing.
During the year Net Insight strengthened its posi- tion in the Broadcast & Media segment when a few more of the industry’s most distinguished broad- cast and media companies chose Nimbra for their media networks. In the united States HTN deployed a Nimbra-based network for TV broadcasts from sports venues and korea Telecom deployed a mul- tiservice network linking ten cities in South korea.
Deliveries also commenced under the contract with Beijing Olympic Broadcasting (BOB) for the contribution network connecting arenas during the summer Olympics in Beijing.
DTT and mobile TV
Cable TV and IPTV Broadcast and Media
DIGITAL TV TAKES OVER
Networks for digital terrestrial TV and mobile TV. The transition to digital terrestrial TV is now un- derway. Over the next three years about fifty countries will carry out the largest technology shift in television history.
MORE ROOM IN ETHER FOR MORE CHANNELS AND NEW SERVICES
Competition for TV customers is intensifying and offering more services has become the primary means of competition to win and retain new customers. Digitization of the terrestrial network is a natural step for using capacity more effectively and creating room for many more channels, with improved audio and image quality, interactivity and new data services.
The expansion of the digital terrestrial networks is currently underway around the world and most countries will completely replace their analog infrastructure over the next ten years. Ho- wever, the major push will take place over the next two to three years, when at least half of the new networks will be deployed.
The digital terrestrial TV market is rapidly expanding, with an annual growth rate of more than 43 percent according to IMS Research. The total market potential for Net Insight’s products in 2008 in these segments is estimated at about USD 100 million according to ABI Research and the number of households with digital terrestrial TV is expected to triple over the next five years to about 131 million. The market for mobile TV is also rapidly expanding.
MOBILE TV - A LARGE GROWTH SEGMENT
With the transition to digital terrestrial networks more frequencies are freed up in the ether that can be used for mobile applications such as broadband (WiFi/Wimax) and mobile TV, which can be transmitted over the same infrastructure as digital TV signals. The possibility of providing digital services such as TV, radio and data directly to cell phones or other mobile units opens new oppor- tunities to television and cell phone operators to broaden their service offering, with increased revenues as a result. ABI Research predicts that there will be about 462 million mobile TV users over the digital TV network in 2012.
COMPLETE SOLUTION CUTS COSTS
Competition for TV customers becomes even more intense when TV services are also provided via satellite, cable TV and broad- band. In order for the expansion of national digital terrestrial TV networks to be profitable, the total cost for networks must be mi- nimized.
Net Insight’s Nimbra platform is a flexible and cost-effective solution with several unique features for terrestrial digital TV and mobile TV that also makes it possible to offer other services over the same platform. Network operators who are deploying DTT networks with the Nimbra platform get both a digital TV net- work and a new infrastructure for delivery of new services that create new business opportunities.
Integrating all necessary functionality into one unit eliminates the need for extra equipment in the network and when multi- ple services can use a common infrastructure the total cost of the network decreases. The Nimbra platform also maximizes network utilization and creates room for up to 20 percent more TV chan- nels, which further lowers operating costs and generates new reve- nue opportunities for the operator.
GPS-INDEPENDENT FOR NATIONAL SECURITY
Contemporary society has become increasingly dependent on the GPS system for many critical services such as distribution of TV broadcasts. The problem is that GPS reception can be disrupted, which would knock out communications. TV screens would go black. A GPS-independent system has therefore become a key fac- tor when choosing new solutions for terrestrial digital TV and mobile TV. During the year Net Insight introduced the unique Time Transfer function for time synchronization without GPS re- ceivers, making it possible to further reduce investment costs, but even more importantly, to improve security for the new national terrestrial networks.
2005Nimbra 680 lanseras och adresserar större marknader och Net Insight erhåller större beställningar från Danmark, tyskland och Norge.
During the year, the first phase of the large digital TV network in Norway went into opera- tion, deployment of new networks in europe and Asia began, as did the rollout of the first mobile TV networks. Net insight is strongly positioned to continue to provide the most efficient and flexible transport solutions for the digital terrestrial networks now being deployed for TV and mobile TV.
DTT and mobile TV
Cable TV and IPTV Broadcast och Media
16 MarKet areas
Networks for cable TV and IPTV. New services such as broadband TV and video services such as YouTube increase traffic on the broadband network. At the same time the introduction of IPTV and other commercial premium services increases demand, occupying more room in the network and reducing the quality of other services. Operators facing this major challenge must now upgrade their networks.
The telephony market is engaged in fierce competition. One ope- rator after the other lower their call rates and offer advantageous prices on broadband while at the same time overall traffic con- tinues to grow. To compensate for shrinking revenues, growing numbers of operators are now beginning to review their service offering to complement it with more advanced TV and video ser- vices for which users are much more willing to pay. With this strategy they intend to increase revenues and customer loyalty, capture new subscribers with a more attractive selection of servi- ces, and reduce the risk of losing existing customers.
SKYROCKETING VIDEO TRAFFIC IN BROADBAND NETWORK
The advance of IPTV has thus far been limited, largely because the transmission speed offered is too low. As bandwidth to house- holds increases, the selection of broadband TV programming is also increasing. Based on a standardized protocol, IPTV reduces distribution costs to the operator at the same time that distribu- ting narrow niche programs to provide true diversity in the of- fering becomes financially viable.
With the introduction of television and video to today’s broadband networks, particularly with the transition to HDTV, this traffic will quickly become dominant. According to the ”IPTV Bandwidth Study” from Bell Labs Research (2006), television and video are expected to account for 90 percent of the broadband traffic in 2009. This will set entirely new demands on how the broadband networks and the access points to the local broadband networks are built.
Cable TV operators are also facing major upgrades of their networks. To hold their own in the competition they must be able to offer telephony and increased broadband capacity in addition to their television offering. But it is primarily the transition to
HDTV and the potential of new interactive services like video-on- demand (VOD) and personal video recorder services (PVR) that are driving this trend. The latter services mean that a video stream must be transmitted to each end customer (unicast), rather than a common stream transmitted to all subscribers (multicast).
NET INSIGHT GUARANTEES EFFICIENT TRANSPORT Centralization of media content is another important trend that places new demands on infrastructure. Above all, it must be pos- sible to guarantee consistent high quality all the way from the media provider to the end user at home. Transport of video traffic must also be extremely efficient to use bandwidth optimally and the network must be scaleable. The Nimbra platform is built to handle just these demands, providing a cost-effective solution to handle the growing video traffic in public networks.
Net Insight’s solution is located in the transport network and comprises the link between the content providers, distribution networks and the access networks to which households connect.
Net Insight’s solution is also independent of the access solution used for the last leg out to the end customer, whether it is the phone company’s traditional copper lines, the cable TV network, or an entirely fiber-based infrastructure. The Nimbra platform can also be used to digitize existing cable TV networks at the same time that the operator can introduce new interactive services on an existing solution and consolidate all services in a single network.
PROMISING MARKET POTENTIAL
The market for providing new television and video services to companies and households over broadband or upgrading cable TV networks indicates strong growth in the coming years. Re- search analyst firm IDC expects sales for equipment for this type of networks of about SEK 16 billion in 2009.
NEW SERVICES AND mORE USERS FILL THE NETWORKS
2006Net Insight launches Nimbra 360 and wins major contracts for terrestrial digital tV network in Nor- way as well as several other Dtt deals. selected as video transmission equipment supplier for the 2008 olympics in Beijing.
DTT and mobile TV
Cable TV and IPTV Broadcast och Media
in the last two years the market has begun to gain momentum, but end customers have remained hesitant about these new services, so the majority of traffic is still comprised of telephony and data.
Once video traffic does gain momentum, the need for network upgrades will be accelerated, creat- ing major market potential for Net insight. With the powerful new Nimbra 680 platform, business opportunities in the segment will increase consi- derably in 2008.
PARTNERS PROVIDE CUSTOmERS WITH CONSIDERABLE ADDED VALUE
Sanam
In South Korea, Net Insight enjoys a highly rewarding partnership with Sanam Technology, a leading supplier of broadcasting sys- tems as well as electronic and medical components. Sanam mar- kets Net Insight’s products in South Korea to broadcast stations, CATV stations, production houses and telecom operators. Sanam is particularly strong in Broadcast & Media and its customers in- clude most major broadcasters. With an efficient organization that includes highly skilled, professional tech personnel, Sanam can dedicate its efforts to promoting Net Insight’s products in industry media and at trade shows and other important venues.
As a direct result of one and a half years of committed promo- tion and sales efforts, Sanam helped Net Insight secure a highly prestigious contract with KT (Korea Telecom), covering a multi- service media network based on over 100 Nimbra switches. The combined distribution and contribution media network will be used by KT client Seoul Broadcasting System (SBS) for exchang- ing media content between its Seoul headquarters and nine local broadcasters across the country.
In promoting Net Insight’s solution, Sanam visited every single SBS broadcaster to present the advantages of a Nimbra- based network. Together with KT’s systems integrator YukYung, Sanam also conducted tough benchmark tests at KT’s facilities.
Alphatron
Alphatron Broadcast Electronics in the Netherlands is one of Net Insight’s most valuable and oldest partners and resellers in the Benelux countries. With its extensive experience of network solutions from Net Insight and studio systems for broadcasters, Alphatron achieved the highest sales volume of all of our partners, in 2007.
Alphatron, which has a customer base that includes major telecom operators and production companies in the entertain- ment industry and the advertising world, was instrumental in se- curing one of Net Insight’s largest and most prestigious contracts with KPN Broadcast Services, the largest telecom operator in the Netherlands.
By offering a local presence, the partnership with Alphatron effectively accelerated the process of establishing a relationship between Net Insight and KPN.
The KPN deal includes a national network for DVB-T and DVB-H. The same network is also used for multiple applications, which makes it a true multiservice network.
Geartech
Since 2004 Net Insight enjoys a highly successful cooperation with Geartech, a Canadian distributor of broadcast and telecom equipment that offers an excellent example of a value-added resel- ler (VAR) whose competence is able to add significant value to Net Insight’s customer offering.
Geartech commands a level of technical expertise that enables them to fully comprehend and communicate the unique advan- tages of the Nimbra platform to telecom and broadcast custo- mers. Partnering with Net Insight enables Geartech to offer its customers a unique solution unavailable anywhere else in the local market.
The IT industry contains many resellers that stock and sell a multitude of technical components and equipment, but offer little or no insight into the business advantages of the various applications. In contrast, Geartech focuses on a limited line of technologies and solutions, which leaves more resources to de- monstrate how Nimbra users gain a competitive edge by reducing operating costs and increasing efficiency.
Unlike most resellers, Geartech also operates its own video production company, which provides hands-on knowledge of the flow of actual production and gives the staff an opportunity to test Nimbra components in a live environment.
Net Insight’s strategy to collaborate with local partners all over the world has been extremely successful. Our partners’ customer relationships as well as their knowledge of local and national radio, TV and telecom industries have benefitted Net Insight’s expansion into new markets.
Net Insight chooses its partner with great care. Obviously they must possess technical knowledge and have a good reputation in their markets, but the key factors when choosing partners are that they must be able to provide the customer with considerable added value and possess excellent knowledge of the local market.
Alphatron Alphatron Broad- cast electronics is a Dutch company that delivers net- work solutions and studio systems to the broad- casting industry.
Sanam
sanam technology in south korea is a leading supplier of broadcasting systems, as well as electronic and medical compo- nents.
Geartech geartech is a Canadian distri- butor of broad- casting and telecommunica- tion equipment.
