PARIS -- TVoDSL 2007 -- Nortel Networks Ltd. is planning a number of IPTV-related acquisitions as part of a shift in its telco video strategy, according to industry sources here in Paris.

Experienced IPTV executives, who requested anonymity, say the Canadian giant has decided the only way to make any headway in the IPTV market, one of the key areas of development identified by CEO Mike Zafirovski in February 2006, is to own some of the key enabling technology. (See Nortel CEO Maps Out His Vision.)

"Nortel has revisited its IPTV strategy" because it hasn't been delivering the required traction, says one source, who believes Minerva Networks Inc. is the most likely first move for the giant vendor.

Nortel's strategy to date has been to forge a number of partnerships to create an IPTV ecosystem, though this has so far delivered little in the way of customer engagements. Its lead partners are: Minerva for IPTV middleware; Kasenna Inc. for video servers; Irdeto Access B.V. for content security and conditional access; Amino Technologies plc (London: AMO) and Tilgin AB for set-top boxes; and Terayon Communication Systems Inc. for ad insertion capabilities. (See Nortel, Minerva Team on IPTV, Nortel, Minerva Find IPTV Partners, Nortel Touts IPTV, and Irdeto, Nortel Team.)

It also has a partnership with BroadStream Communications Inc. for content aggregation and delivery. (See Nortel, Broadstream Team.)

Nortel admits it has been reviewing its IPTV strategy, but adds that it hasn't announced whether acquisitions might be part of any new approach to the sector.

Minerva says it "cannot comment on any investment or acquisition rumors."

Another senior IPTV industry executive, who says he's aware of Nortel's acquisition intentions, says the Canadian giant has to shift its strategy if it's to be taken seriously by any major carriers.

"You have to be seen to be committed to the market," says the exec. "Look at Alcatel-Lucent (NYSE: ALU), Siemens Communications Group with its Myrio acquisition, and Microsoft Corp. (Nasdaq: MSFT). These companies show a lot of commitment to IPTV with resources and have backing and involvement right up to the top levels of management, with big-name individuals closing deals. So far, Nortel hasn't shown that sort of commitment, but some acquisitions would change that."

To date, Nortel has announced just one IPTV-related deal, at Canadian carrier Telus Corp. (NYSE: TU; Toronto: T), where it is providing integration services and has, according to Nortel, taken Minerva into the carrier as part of the deal. (See Nortel Helps Telus With IPTV.)

But Telus says its IPTV service, which is believed to have about 40,000 subscribers, is running on legacy iMagic middleware -- a platform acquired, and still supported, by Alcatel-Lucent -- and that no other IPTV service delivery platforms are in live deployment. (See Alcatel Denies iMagic Fadeout.)

Nortel says it has some other IPTV-related deals that it can't yet announce. Light Reading has found one of them here in France, where it is one of a number of companies that is providing a triple-play platform to service provider Completel S.A.S. (Paris: CPT). That carrier is selling a pre-integrated service based around a Sagem Télécommunications SA set-top box through French electronic goods retailer giant Darty. Sagem is the lead vendor, while Nortel and IPTV middleware player Orca Interactive Ltd. are also part of the mix.

Nortel and Orca already have a relationship though Orca's Interactive Alliance. (See Orca Launches Program.)

Orca says it's currently in takeover talks with a number of potential buyers. Comverse Inc. (Nasdaq: CNSI), though, is regarded as the clear favorite to snap up Orca. (See Orca in IPTV Takeover Talks.)

If Nortel pulls the IPTV acquisition trigger, it will be just part of an ongoing consolidation process that is sweeping the telco TV sector. (See Will Harmonic Keep Singing Solo?, Arris Pounces on Tandberg TV, Moto Taps Tut for $39M, IPTV Drives Ericsson to Redback, NDS Extends to Gateway With Jungo Buy, Sources: Moto's Shopping for IPTV Middleware, Will Cisco Make an IPTV Middleware Move?, Harmonic Spends $45M on Entone VOD-Ware, Cisco Snatches VOD Vendor Arroyo Video , and Motorola Scoops Up Broadbus.)

— Ray Le Maistre, International News Editor, Light Reading