SBC Stretches Lightspeed Timeline

LAS VEGAS -- Telecom '05 -- While SBC Communications Inc. (NYSE: SBC) takes pains to assure Wall Street and others it is on track with its Project Lightspeed rollout, the company has quietly given itself another six months -- until mid 2008 -- to reach 18 million households with the fiber-based IPTV, voice, and data bundle. (See SBC on Lightspeed: Full Fiber Ahead.)

Lea Anne Champion, the SBC executive in charge of Project Lightspeed, subbed for SBC Chairman Ed Whitacre here Tuesday, speaking to around a thousand telecom professionals.

“We are on track with our plans to bring IP video, voice, and data services –- we will reach 18 million households by mid 2008,” Champion says. “It’s very aggressive; that’s 50 percent of our households.”

But “aggressive” isn’t what it used to be.

SBC said in a May 4, 2005, release that it “expects the network to reach 18 million households as part of its initial deployment by the end of 2007."

Despite murmurs that the project is running into technical challenges, the word from SBC and its IPTV partners Alcatel (NYSE: ALA; Paris: CGEP:PA) and Microsoft Corp. (Nasdaq: MSFT) has been that trials involving IPTV and broadband services are going smoothly. (See SBC Awards Microsoft $400M IPTV Deal and Alcatel & Microsoft Going Steady.)

“We have just completed a successful field trial of IPTV and data and we got the results we wanted,” Champion says. “We are now moving on to the next phase, a controlled trial late this year or in early 2006.” (See SBC: IPTV's Day Has Come.)

This is not the first time SBC has wavered on its rollout timeline. Champion told Light Reading last March that SBC planned to reach 19 million homes with Project Lightspeed, but the company corrected the statement shortly thereafter. (See Inside SBC's IPTV Factory.)

“We did say 19 million earlier this month (including in the DSL Forum presentation),” said an SBC spokesman in an email to Light Reading March 23. “That figure was based on network data that was newly available at the time. We've since updated that data, and will continue to use our original number of 18 million homes passed by the end of 2007.”

SBC believes the rollout of its triple-play bundle will become easier and less costly after the first "controlled" subscriber groups have been turned on. “We expect to expand and add homes as scale continues to increase, and as deployment costs continue to decline,” Champion says.

But the scaling issue is exactly the challenge for the IPTV part of the Project Lightspeed offering. Reports last spring said Microsoft's IPTV middleware platform was not performing well as the number of subscribers ramped into the hundreds and thousands. (See SBC, Microsoft Defend Lightspeed and Swisscom IPTV Stall Sends Shivers.) Some believe the scaling issues are the speed bumps in the way of Lightspeed's forward momentum.

As reflected in Champion’s comments here this morning, SBC is also now integrating an IMS and converged services patter into its Project Lightspeed pitch. Champion stressed that Lightspeed users will enjoy personalized services that integrate video, voice, wireless, and broadband services. (See SBC Jumps on Lucent IMS Bandwagon.)

“The race for the digital home is the wrong question, because it really goes beyond the home,” Champion says. “It’s about the digital lifestyle... It crosses the TV, the home PC, and wireless devices.”

Champion said Lightspeed customers will be able to program their digital video recorder while away from home using a Cingular Wireless LLC cell phone. She also promised a centralized address book for all phone numbers and email addresses as part of a “personal account” that subscribers can access with a TV or a wireless device. (See IMS: Simplify First, Add Apps Later.)

SBC CEO Ed Whitacre was scheduled to give the keynote address here this morning, but couldn’t make it due to a “scheduling conflict.” Whitacre, however, made some cursory comments via vidoeconference before Champion took the stage.

— Mark Sullivan, Reporter, Light Reading