Nortel & LG Prep New IPTV Set-Top

Nortel Networks Ltd. says it will offer its own set-top box -- built by the LG-Nortel Co. Ltd. joint venture -- to carriers as part of its IPTV strategy.

The box, not yet available, doesn't necessarily mean the end of Nortel's partnerships with set-top makers Amino Technologies plc (London: AMO) and Tilgin AB .

"Our goal is to have an interoperable set of set-top partners to offer our customers," says Ken Couch, director of marketing for Nortel's video divison. The set-top box will be based on open standards, he adds.

Like Alcatel-Lucent (NYSE: ALU), Nortel serves as a systems integrator for IPTV. Its end-to-end IPTV package, being used by Telus Corp. (NYSE: TU; Toronto: T), includes middleware from Minerva Networks Inc. , video servers from Kasenna Inc. , and content from BroadStream Communications Inc.

Recent speculation has it that Nortel might try out an acquisition, too, to speed up its progress in IPTV. (See Sources: Nortel Planning IPTV Acquisitions.)

What would Nortel get out of selling its own set-top box? It's feasible the company could try to make the set-top work closely with Nortel gear in the carrier network, making it harder for someone like Alcatel-Lucent to squeeze in, says Rob Enderle, principal analyst of the Enderle Group .

"You only have a few companies in each geography that can sell products of this class, so you could have a chance to lock someone out," Enderle says.

LG-Nortel already sells set-top boxes in Korea. In fact, the joint venture recently struck up a partnership with Irdeto Access B.V. , a content security firm that's also a Nortel IPTV partner. (See Vendors Team for IPTV.)

At IPTV World Forum in London this week, Nortel plans to emphasize SIP-based applications for IPTV, much as it did a year ago at TelecomNext. (See Nortel, Minerva Find IPTV Partners.) Possible applications would include instant messaging and VOIP, with typical features such as clicking on names in an address book to launch a phone call.

Couch adds that Nortel, like many others, is developing ways to port video from a mobile device into a wireline device. But he says Nortel won't necessarily be displaying that this week.

— Craig Matsumoto, West Coast Editor, Light Reading