BT Group plc (NYSE: BTY; London: BTA) is putting multiple TV-over-DSL systems through their paces in its test labs with a view to trialing specific services in 2005, according to the carrier’s senior management.

During a media briefing, CEO Ben Verwaayen said BT is testing “multiple systems from brand-name suppliers and from some unexpected names, and they come from the West and the East."

The move is a natural step for BT as it explores ways of boosting revenues from non-traditional services over its increasing base of broadband subscribers. BT describes such services as "new wave" (see BT Reports Leap in New Service Revenues).

While Verwaayen declined to identify any specific vendors, that deliberate stress on suppliers from "the East" points clearly to two vendors BT has worked with previously when assessing access technologies and content delivery systems, Huawei Technologies Co. Ltd. and ZTE Corp. (Shenzhen: 000063). [Ed. note: Or mightn't he have meant Key Communication Systems Ltd. in the scenic East London borough of Bexley?]

Huawei is already well ensconced with the British carrier (see Huawei Gets BT's Blessing and BT Exact Tests Huawei Routers). In addition, it has proven to BT that it has in-house video capabilities with a video telephony system that’s already in use (see Huawei Helps BT Launch Video and BT Unveils Broadband Services).

ZTE, meanwhile, has forged a partnership with Microsoft Corp.’s (Nasdaq: MSFT) TV business unit to pull together an IPTV combined hardware and software system (see ZTE Will Unveil IP TV in Venice).

It also has a history with BT, having been shortlisted during at least one access infrastructure tender process, though without success. One BT executive noted that ZTE’s inclusion in the bidding helped the carrier force down the prices from other suppliers (see BT Moves Ahead With Mega Project).

Neither vendor had responded to requests for comment as this article was published.

Other vendors likely to be engaged in the IPTV system tests include Alcatel SA (NYSE: ALA; Paris: CGEP:PA), Kasenna Inc., and Siemens AG (NYSE: SI; Frankfurt: SIE), among others (see Alcatel Unveils Open Media Suite, Video Smokes in Amsterdam, and Siemens Gears Up for IPTV).

The end result, however, might not be a TV-over-DSL service comparable to those already available in Italy and France, where e.Biscom SpA's (Italy: EBI) FastWeb and Iliad's (Euronext: ILD) Free have blazed trails with their triple-play services (see Italians & Triple Play: It's Amore and Iliad Ramps Up Broadband to the Homer).

Verwaayen and BT’s chairman, Sir Christopher Bland, warned that the current U.K. market for interactive TV services, and the nature of the BT network, would likely limit any commercial services initially.

Bland noted that BT’s current access infrastructure was adequate for delivering most types of content with a high quality of service -- apart from live sport and what he described as “high-speed films” -- but not the best medium. "DSL is not really an efficient way of getting a TV signal to the home, so we're investigating opportunities for other content services."

Bland added that any service launched wouldn’t be available nationwide, due to the constraints of BT’s copper plant, noting that France Telecom SA’s (NYSE: FTE) network is more suited to the service (see French Say Oui to DSL TV).

"Paris has shorter copper lengths, and for some reason their copper is regarded as better quality than ours. We don't have that same advantage," he blandly stated.

He added that, while BT would be able to offer a service, it would be competing with already well entrenched and likely more efficient services currently delivered over the air, via satellite by BSkyB Group plc, and over cable by NTL Group Ltd. (Nasdaq Europe: NTLI) and Telewest Communications Networks plc (Nasdaq: TWSTY).

Verwaayen added that announcements of customer trials would be made in a few months, but that BT hadn't yet struck any agreements with content providers regarding any potential services.

Talks have been ongoing, however, and British Sunday newspaper The Observer yesterday claimed BT was talking to BSkyB, the BBC, and Universal Studios about securing content rights for a broadband TV service, though BT hasn't commented on the matter.

— Ray Le Maistre, International News Editor, Light Reading