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Sources: Nortel Planning IPTV Acquisitions

PARIS -- TVoDSL 2007 -- Nortel Networks Ltd. is planning a number of IPTV-related acquisitions as part of a shift in its telco video strategy, according to industry sources here in Paris.

Experienced IPTV executives, who requested anonymity, say the Canadian giant has decided the only way to make any headway in the IPTV market, one of the key areas of development identified by CEO Mike Zafirovski in February 2006, is to own some of the key enabling technology. (See Nortel CEO Maps Out His Vision.)

"Nortel has revisited its IPTV strategy" because it hasn't been delivering the required traction, says one source, who believes Minerva Networks Inc. is the most likely first move for the giant vendor.

Nortel's strategy to date has been to forge a number of partnerships to create an IPTV ecosystem, though this has so far delivered little in the way of customer engagements. Its lead partners are: Minerva for IPTV middleware; Kasenna Inc. for video servers; Irdeto Access B.V. for content security and conditional access; Amino Technologies plc (London: AMO) and Tilgin AB for set-top boxes; and Terayon Communication Systems Inc. for ad insertion capabilities. (See Nortel, Minerva Team on IPTV, Nortel, Minerva Find IPTV Partners, Nortel Touts IPTV, and Irdeto, Nortel Team.)

It also has a partnership with BroadStream Communications Inc. for content aggregation and delivery. (See Nortel, Broadstream Team.)

Nortel admits it has been reviewing its IPTV strategy, but adds that it hasn't announced whether acquisitions might be part of any new approach to the sector.

Minerva says it "cannot comment on any investment or acquisition rumors."

Another senior IPTV industry executive, who says he's aware of Nortel's acquisition intentions, says the Canadian giant has to shift its strategy if it's to be taken seriously by any major carriers.

"You have to be seen to be committed to the market," says the exec. "Look at Alcatel-Lucent (NYSE: ALU), Siemens Communications Group with its Myrio acquisition, and Microsoft Corp. (Nasdaq: MSFT). These companies show a lot of commitment to IPTV with resources and have backing and involvement right up to the top levels of management, with big-name individuals closing deals. So far, Nortel hasn't shown that sort of commitment, but some acquisitions would change that."

To date, Nortel has announced just one IPTV-related deal, at Canadian carrier Telus Corp. (NYSE: TU; Toronto: T), where it is providing integration services and has, according to Nortel, taken Minerva into the carrier as part of the deal. (See Nortel Helps Telus With IPTV.)

But Telus says its IPTV service, which is believed to have about 40,000 subscribers, is running on legacy iMagic middleware -- a platform acquired, and still supported, by Alcatel-Lucent -- and that no other IPTV service delivery platforms are in live deployment. (See Alcatel Denies iMagic Fadeout.)

Nortel says it has some other IPTV-related deals that it can't yet announce. Light Reading has found one of them here in France, where it is one of a number of companies that is providing a triple-play platform to service provider Completel S.A.S. (Paris: CPT). That carrier is selling a pre-integrated service based around a Sagem Télécommunications SA set-top box through French electronic goods retailer giant Darty. Sagem is the lead vendor, while Nortel and IPTV middleware player Orca Interactive Ltd. are also part of the mix.

Nortel and Orca already have a relationship though Orca's Interactive Alliance. (See Orca Launches Program.)

Orca says it's currently in takeover talks with a number of potential buyers. Comverse Inc. (Nasdaq: CNSI), though, is regarded as the clear favorite to snap up Orca. (See Orca in IPTV Takeover Talks.)

If Nortel pulls the IPTV acquisition trigger, it will be just part of an ongoing consolidation process that is sweeping the telco TV sector. (See Will Harmonic Keep Singing Solo?, Arris Pounces on Tandberg TV, Moto Taps Tut for $39M, IPTV Drives Ericsson to Redback, NDS Extends to Gateway With Jungo Buy, Sources: Moto's Shopping for IPTV Middleware, Will Cisco Make an IPTV Middleware Move?, Harmonic Spends $45M on Entone VOD-Ware, Cisco Snatches VOD Vendor Arroyo Video , and Motorola Scoops Up Broadbus.)

— Ray Le Maistre, International News Editor, Light Reading

mocelet 12/5/2012 | 3:15:56 PM
re: Sources: Nortel Planning IPTV Acquisitions
As far as I know Nortel (cisco as well) lacks a good access story for IPTV deployement. If NT wants to be a one-stop shop, they need to cover that piece either through partnership/JV or M&A.

I've seen Minerva demos few times and I still don't think that they have the wow factor above MSFT or Siemens (Myrio).

Does NT have any live IPTV customer? If there's, what's the vendor line-up for end-to-end solution?
Pancakes 12/5/2012 | 3:15:56 PM
re: Sources: Nortel Planning IPTV Acquisitions
Ad Localization is a goldmine just waiting to happen. Just think of all the revenue generating possibilities, at any service level customer, MSO, etc! And Terayon's CherryPicker is being eyed for its years of experience and technology.
LightWarrior 12/5/2012 | 3:15:55 PM
re: Sources: Nortel Planning IPTV Acquisitions I agree. I am not sure why Nortel would want to align itself with older monolithic technology from Minerva, especially if they are trying to differentiate from Microsoft IPTV. Minverva has seen uptake by Tier 3's but haven't seen anything bigger than the SureWest deal. You would think Nortel would try to leapfrog MS and Cisco and Moto through acquisition of a "next-gen" middleware player with proven scalability and an opennes story... Orca and Espial would be the top two targets, but smaller guys like Zignal could work too.

Worse than Nortel's current partnership strategy would be anchoring itself to closed/outdated technology.

The new management team at Nortel can do better than this I think.

Just my two cents.
olsen 12/5/2012 | 3:15:54 PM
re: Sources: Nortel Planning IPTV Acquisitions Once again, the JV between LG Electronics and Nortel seems to be forgotten, or not taken into consideration.
On the 23rd of january, an agreement between Irdeto, Alticast, Kaon Media and LG-Nortel was announced.

http://www.irdeto.com/page.php...
mocelet 12/5/2012 | 3:15:51 PM
re: Sources: Nortel Planning IPTV Acquisitions
I liked Espial's solution.

I think service provider would first ask for an access infrastructure solution to provide IPTV service, before it goes through the whole end-to-end functions. I'm not sure if Nortel has anything to offer in access.

As far as I've seen, access vendors play an important role in bringing in their IPTV gang (middleware, vod server, ca, set-top box, etc.).

I think BT tried to close the access GAP first with Calix partnership. That didn't work out. Then it tried JV with Huawei. Again ended up with divorce. I guess they keep increasing their commitment level with each trial. This time they make take the plunge and pop the question: M&A
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