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IPTV: New Signs of Life

Ray Le Maistre
1/27/2006

PARIS -- After a year of frustration, the European IPTV community expects 2006 to be the year in which concrete decisions are made and real budgets are spent, according to companies attending this week's TVoDSL 2006 event in Paris.

Vendors, carriers, and analysts alike believe the sector will get a kickstart this year from Orange (NYSE: FTE)'s expansion plans, both in its domestic market and internationally. This could spell good news for the likes of IPTV middleware provider Thales Broadcast & Multimedia , which is being acquired by Thomson S.A. (NYSE: TMS; Euronext Paris: 18453), and, once rollouts ramp up, a number of set-top box suppliers, with incumbent provider Sagem Télécommunications SA well placed to benefit. (See FT Plans Euro IPTV Assault and Thomson Buys IPTV Player.)

Here's a roundup of news snippets and thoughts from Paris as the show closes:

FT's ramping up
France Telecom has more than 200,000 users domestically. It sees the need for more advanced and intelligent set-top box capabilities for its future service. Although not publicly announced, the carrier has issued an RFP (request for proposal) specifically for set-top box client software that will allow the carrier to provide more personalized menus and faster response times to information requests.

The issue of personalization -- the ability to deliver unique user interfaces for each viewer on the TV, and to give subscribers greater control over the content they can access through networked personal video recorders -- was a constant theme here, stressed by carriers including Telefónica SA (NYSE: TEF), Fastweb SpA (Milan: FWB), and the U.K.'s Video Networks Ltd. (VNL) , as well as FT and the many vendors hoping for a slice of the action.

In his presentation to attendees, FT's Benjamin Schwarz, who is in charge of the carrier's IPTV strategy, said a number of service enhancements would be announced in the coming months as the company starts to roll out the service into more French cities. These will include the launch of some unique "free to air" TV channels (in addition to the regular broadcast channels it already delivers), high-definition television (HDTV) before this summer's soccer World Cup, and video on demand for PCs as well as TVs.

ADSL2+ not enough for Telefónica
Telefónica's Multimedia and TV Services manager, Jorge Ruano, says ADSL2+ cannot provide enough bandwidth for telco IPTV plans in the future, and that fiber-based options -- whether fiber-to-the-home or fiber-to-the-curb, with VDSL2 providing the final connection -- would be required.

Why? He says ADSL2+ is OK for now, as each of the 200,000-plus households using the carrier's Imagenio IPTV service only needs up to 6 Mbit/s for their standard-definition TV, Internet access, and VOIP service to work. But in the future, once multiple HDTV channels are being provided to each house, and the Internet connection is used for bandwidth-hungry services such as online gaming, up to 66 Mbit/s per household will be needed.

The Spanish carrier is already making moves to utlilize its sunk fiber in Spain's major cities. (See Eurobites: Light Me!)

Tiers on my pillow
With many of Europe's major operators now committed to their IPTV equipment partners, some vendors are now targeting the second-string carriers and ambitious broadband ISPs in a bid to make 2006 a kickstart year. Two middleware companies pursuing such a strategy include video server and IPTV middleware provider Kasenna Inc. and middleware provider Infogate Online Ltd.

Kasenna's international director of technology, Huw Price-Stephens, says the company has just won a deal with PrimeTel , an alternative carrier in Cyprus, to provide its video servers, and that Central and Eastern Europe provides the best hunting ground for Kasenna now.

But business is slow in coming. "There are far fewer decisions being made than everyone thought," says Price-Stephens. "There have been a lot of RFPs and RFIs, but the service providers are still looking at the dynamics and economics of the market."

Infogate's VP of marketing, Daniel Levy, says his company is also looking down the pecking order. "A few years ago the game was to catch a Tier 1 carrier. Now our focus is on the Tier 2 and 3 carriers in North America, and the broadband ISPs and multi-tenant dwellings in Europe."

Levy says his company, which now has eight commercial deployments, has just struck a deal with Indian operator Mahanagar Telephone Nigam Ltd. (MTNL) and has won a deal in Croatia, along with partners Kasenna (for its video servers) and content protection firm Widevine Technologies Inc.

Price-Stephens declined to comment on that piece of information.

Other topics of conversation here included the impact of standards developments with the long-awaited codec MPEG-4, which is set to replace MPEG-2 in the new HDTV world, and the emergence of a number of new startups in the IPTV world, especially in the test-and-measurement and service assurance sectors. Those topics will be covered in articles during the coming days.

— Ray Le Maistre, International News Editor, Light Reading

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