Some of the systems players in this sector (and there's a lot of 'em!) have got off to a roaring start in 2005 as service providers get serious about their triple-play strategies (see Who Makes What: Telco Video).
Here's a recap of some of the recent activity in the IPTV market, and why it matters:
Microsoft & BellSouth: How Cozy?
Microsoft Corp.'s (Nasdaq: MSFT) TV division ended 2004 on a high, landing a monster deal with SBC Communications Inc. (NYSE: SBC). (See SBC Awards Microsoft $400M IPTV Deal .) And it didn't stop there: Recently, BellSouth Corp. (NYSE: BLS) dropped a CES news bombshell by announcing a trial of Microsoft's IPTV system (see BellSouth Trials Microsoft's IPTV).
The RBOC took the opportunity to talk about how it'll put its new technology toys to work by unveiling its multimedia service plans at the Consumer Electronics Show (CES) in Las Vegas last week (see SBC: 'Let Us Entertain You!' and SBC Launches U-verse).
So is Bill's brigade set for an RBOC IPTV double whammy? Not necessarily, says BellSouth spokesman Jeff Battcher. The Microsoft trial is not exclusive, and "without mentioning any names, we're investigating all manner of ways we can deliver [video and TV] services over our copper and fiber networks." (See BellSouth: Access Will Rise Again.)
Battcher says Microsoft's middleware system is in technical trials at present and will advance to field trials later, but "I can't say how far down the road we are with other suppliers."
So why announce Microsoft? Battcher says it was because Bill Gates was at CES and was mentioning the IPTV trials in his presentation, "so I thought we'd better say exactly what it is we're doing. It's only a trial, and it ended up getting more coverage than it really deserved. And you won't hear a PR guy say that very often!"
That's so true, Jeff. In fact, you may have just made PR history!
India Preps for IPTV Explosion
Another market that may prove fruitful for Microsoft TV is India, where Reliance Infocomm Ltd. has been trialing the software giant's system for some time now (see Reliance, Microsoft Team on IP TV).
But Reliance isn't the only operator with IPTV plans. This week Chinese vendor ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763), which includes Microsoft's middleware in its Telco TV offering, announced a $25 million triple-play equipment contract award with Atlas Interactive (India) Pvt. Ltd. (see ZTE Wins Triple-Play Deal in India and ZTE Will Unveil IP TV in Venice).
ZTE is providing equipment for the service provider's rollout of its NetTV services in the Delhi area. Atlas has plans to launch its service all over India, with analysts estimating the project will cost about $200 million initially.
So is this another score for Microsoft? Not this time. Rival middleware vendor Orca Interactive Ltd. has this deal in the bag (see Orca Wins IP TV Deal in India).
Another middleware player, Kasenna Inc., is also talking of success in India, though it's not known yet whether the deal is for a broad suite of Telco TV systems or just the firm's video servers (see Kasenna Launches TotalTV System). "India's going to be a very big [IPTV] market in 2005," predicts Kasenna sales director Robert Hopkins.
Harmonic Soars on Q4 Update
Digital video and optical system vendor Harmonic Inc. (Nasdaq: HLIT) today updated its fourth-quarter guidance and saw its share price leap a whopping $1.61, nearly 22 percent, to $9.10.
The company says stronger bookings in the final three months of 2004 mean it will post revenues of between $83 million and $86 million, exceeding its previous guidance of $72 million to $78 million (see Harmonic to Beat Q4 Guidance). Analysts had been expecting revenues of $73.8 million.
CFO Robin Dickson told a business conference today that the fourth quarter had been bolstered by the "fallout of two big orders" that just missed the third quarter (see Vendors: Cable Clouds Are Clearing).
He added that Harmonic was also set to beat its second-half revenue target of $125 million to $130 million, with six-month sales of about $135 million, and would post a net profit for the full year.
Harmonic is a much prized partner for vendors targeting the IPTV sector, particularly for its encoding system that sits at the headend and converts broadcast signals into the formats needed for service provider networks (see Microsoft Sells IP TV to Carriers and UTStarcom, Myrio Have Their IPTV ).
China Mulls IPTV Licenses
China's State Administration of Film, Radio, and Television is likely to issue IPTV licenses this year, according to China Daily newspaper. The major operators are all engaged in various trials, and are waiting for the green light from the government agency to take their services commercial (see China Telecom Launches IPTV).
China Netcom Corp. Ltd. (NYSE: CN; Hong Kong: 0906), which has set up a joint venture called Tiantian Online specifically to develop its IPTV service, should have direct access to commercial IPTV experience by the time the licenses are issued. It is in the process of acquiring a 20 percent stake in Hong Kong operator PCCW Ltd. (NYSE: PCW; Hong Kong: 0008), which already has more than 350,000 IPTV subscribers (see China Netcom Eyes PCCW Stake).
Other IPTV news of interest:
- Arroyo Touts MSO Customers
- Tut Takes On CoSine
- Ciena Targets Cable MSOs With 4350
- mPhase Helps Reduce OpEx
- Tandberg TV Names New CFO
- Tandberg Demos MPEG-4 AVC
- Espial Integrates With Broadcom
- DaveTV Launches IPTV Device
- BitBand Raises Another $4.75M