Video software

Ericsson Claims AlcaLu IPTV Scalp

Ericsson AB (Nasdaq: ERIC) is claiming something of an IPTV coup by saying it has replaced Alcatel-Lucent (NYSE: ALU) as the IPTV systems supplier at Taiwan's national operator, Chunghwa Telecom Co. Ltd. (NYSE: CHT), one of the world's most experienced telco TV players.

Addressing the media at a London briefing late Thursday, Ericsson's Head of Solution Area TV Staffan Pehrson said that Chunghwa, as part of its strategy to deliver its IPTV services to multiple screens (and not just the TV), is replacing AlcaLu's IPTV delivery systems with Ericsson's IPTV middleware and video equipment and that a contract for Phase I of the project, worth US$37 million, had been struck.

Pehrson noted that this was the second time Ericsson had replaced AlcaLu at an IPTV deployment -- the first being at Telekom Austria AG (NYSE: TKA; Vienna: TKA), where the Swedish giant ousted AlcaLu in early 2010. (See Telekom Austria Goes for Ericsson IPTV and TA Does IPTV With AlcaLu.)

An AlcaLu spokesperson says the vendor understands that Chunghwa has "launched a new bid and will have two suppliers for IPTV."

Chunghwa confirmed to Light Reading that Ericsson is "the successful bidder of our 'new' IPTV platform. The bid process was under our standard operating procedure. Now we still use Alcatel-Lucent for the 'old' platform. We will maintain both platforms for years."

The Chunghwa deal is significant as the operator is one of the most experienced IPTV service providers in the world, having launched its Multimedia On Demand (MOD) offering in 2003. It currently has more than 930,000 MOD customers, a significant total in a country of 7.7 million households and a population of about 22.2 million, where it competes against strong cable operator rivals that dominate the pay-TV market.

The deployment is a major coup for Ericsson in the IPTV sector, which it joined relatively late (compared with its rivals) in 2008. (See Ericsson Takes On IPTV Giants.)

In his recent Country Intelligence Report on Taiwan, Pyramid Research Senior Analyst Daniel Yu noted that Chunghwa has been strengthening its HD content offering to set itself apart from the cable operators, which haven't invested too much in digital plant so far, and has started offering bundled content packages that include discounts, "a move that is gaining traction." Yu believes Chunghwa will grow its MOD customer base to 970,000 by the end of 2011.

Further gains for Ericsson?
Pehrson believes that, in terms of the number of subscribers, his company's IPTV delivery platform is now serving (more than 5 million), Ericsson is now "at least number three, maybe number two" in the global market, where Microsoft Corp. (Nasdaq: MSFT) is the clear market leader with its Mediaroom system. (See The Other Microsoft.)

And he told Light Reading that Ericsson is kicking Technicolor (Euronext Paris: TCH; NYSE: TCH) (formerly Thomson) out of an IPTV deployment that he declined to identify. He said many of the world's major IPTV service providers are once again reviewing their IPTV technology deployments with a view to delivering video content to multiple screens (TV, PC, mobile device) and that's he's confident of further success because Ericsson's IPTV platform was developed with multiscreen deployments in mind, "unlike the systems from other companies." (See Ericsson Tackles Multiscreen TV.)

But the Swedish giant has plenty of competition. In addition to Microsoft, AlcaLu and Technicolor, Huawei Technologies Co. Ltd. , Nokia Networks and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) are also in the IPTV service platform market, along with a host of specialist players including BeeSmart Ltd. , Dreampark AB (which is in the process of being acquired by Motorola Mobility LLC ), Espial Group Inc. , Innovative Systems , Latens Systems Ltd. , Minerva Networks Inc. and Orca Interactive Ltd. (See Vodafone Iceland Uses Espial for IPTV, Dream Move for IPTV Firm, PTK Uses BeeSmart for IPTV, Innovative Systems Lands Middleware Deal and Minerva Claims IPTV Milestone.)

They're all chasing a limited but growing slice of the pay-TV market, as, according to Pyramid Research, there were 47.3 million IPTV subscribers globally at the end of 2010, but that number is expected to rise to more than 130 million by 2015.

— Ray Le Maistre, International Managing Editor, Light Reading

digits 12/5/2012 | 4:54:47 PM
re: Ericsson Claims AlcaLu IPTV Scalp

The story has been updated with the comment from Chunghwa - Ericsson is the supplier of the 'new' IPTV platform that, for several years at least, will run in tandem with the Alcatel-Lucent system.

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