Video services

Lucent Sees IPTV Opening

CHICAGO – Supercomm 2005 – Sensing that IPTV deployments may be hitting some rough patches, Lucent Technologies Inc. (NYSE: LU) is putting together a set of products and a strategy for entering the video-over-broadband market.

On Tuesday Lucent announced a partnership with Orca Interactive Ltd., a supplier of video middleware and integration tools that has some deals in Europe and Asia (see Lucent, Orca Team on IPTV, IPTV Tidbits: Microsoft, China & More, and Ericsson Provides TDC With IMS). Lucent says it's integrated Orca's RIGHTv platform and will use technologies such as IP Multimedia Subystem (IMS) to add other applications to video in a carrier's suite of broadband services.

The partnerships represents a new phase of IPTV operations for Lucent, which suffered a big defeat when it lost the integration contract for IPTV at SBC Communications Inc. (NYSE: SBC) to Alcatel (NYSE: ALA; Paris: CGEP:PA). With some rumblings that IPTV deployments might not be going as smoothly as planned, it's clear that Lucent is using that as an opportunity to rebuild its IPTV strategy (see SBC, Microsoft Defend Lightspeed).

"The reason we chose Orca is that the solution is scaleable," says Rob Piconi, vice president and general manager of Lucent's broadband solutions group. "A lot of the delays in IPTV are being caused by scaleability issues."

Piconi also said another consideration with Orca was that its software platform is open and includes development APIs. Lucent would like to work with its customers to develop more sophisticated applications, using IMS, such as video conferencing.

Of course, Lucent's not the only one going after the IP video market, as the slew of IP video market news announcements here point to IPTV has one of the hottest areas (see Juniper Aims E-Series at IPTV, Spirent Latest to Tackle Video Test, and IBM Scopes Out IPTV Party). In terms of IPTV middleware and integration, however, the early dominance by Alcatel and Microsoft Corp. (Nasdaq: MSFT) is going to be difficult to overcome.

"Alcatel and Microsoft have got the big telephone companies nailed down," says Kermit Ross, principal with Millenium Marketing. "There might be scaleability issues, but Microsoft and SBC have an army of people working on it. Lucent's got no IPTV customers, and in broadband they only have a few."

Lucent says it's in IPTV trials with a "global Tier 1 player," though it's not revealing who that is.

It's clear that Lucent hopes to use its installed base of optical switching, Sonet multiservice, and DSL access equipment to get into the IPTV business. For example, Lucent executives point to a recent IPTV service at one of its DSL customers, Telefónica SA, which is supplying service to 40,000 subscribers. The system is being run in conjunction with Lucent's Stinger DSL platform, but Telefónica has built its own video middleware.

Because the North American market is perceived by some to be locked up, with SBC, BellSouth Corp. (NYSE: BLS), and Verizon Communications Inc. (NYSE: VZ) all going with Alcatel and Microsoft, Lucent may be focusing initially on the European market. Piconi says delivering IPTV in Europe will be quicker than in the United States, because HDTV, which requires more bandwidth, is not a factor there.

— R. Scott Raynovich, US Editor, Light Reading

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