Swiss national carrier Swisscom AG (NYSE: SCM) is joining Europe's TV-over-DSL club with a 600-home trial that's due to start next month (see Swisscom to Trial IP TV Service).

While not the first to trial or launch such a service, Swisscom is the first European operator to do so using Microsoft Corp.'s (Nasdaq: MSFT) IP TV platform (see Italians & Triple Play: It's Amore, France Telecom Intros TV Over DSL, and Neuf Telecom Plans TV Over DSL).

The software, which manages and delivers TV and video content over broadband access networks, was launched last year (see Microsoft Sells IP TV to Carriers and Alcatel Demos IPTV Using WM9). Swisscom's Bluewin unit is teaming Microsoft's software with set-top boxes from Thomson and a TV signal encoding system from Tandberg in a four-month trials, with a view to launching commercial services in 2005.

Swisscom is the first carrier to go beyond a lab or "affiliated users" trial with the Microsoft system, says Ed Graczyk, director of marketing at the software giant's TV division. Swisscom first announced it was checking out Microsoft's system last November (see Swisscom Picks Microsoft IPTV).

Graczyk says Microsoft's other named carrier customers -- Canada's BCE Inc. (NYSE/Toronto: BCE), India's Reliance Infocomm Ltd., and RBOC SBC Communications Inc. (NYSE: SBC), -- are at various stages of deployment. He adds that SBC is planning field trials before the end of the year. (See Bell Thinks Outside the Box, Reliance, Microsoft Team on IP TV, and SBC's $6 Billion Banquet.)

In addition, Graczyk claims that a number of other "brand-name carriers" that don't currently want to be named, including European and Asian operators, are also testing the system.

So is this the software that will finally give Microsoft credibility with carriers? It could be, says Scott Clavenna, chief analyst at Heavy Reading, who has been delving into the triple-play space (see Telco Video & VOIP Stakes Rising and Video Profits on Pause?). He says, "the recent endorsement from SBC is huge," and reckons there's a "very large market opportunity" for Microsoft's platform as it also works over FTTP and cable networks (see Microsoft TV Launches Cable Software).

Naturally, Graczyk is bullish about his company's prospects and dismissive of the possibility for any head-on competition. He says that, although there are "niche" players, such as Kasenna Inc., Myrio Corp., and SeaChange International Inc. (Nasdaq: SEAC), that compete with part of Microsoft's platform, "no other provider has the end-to-end system, from encoding to the user, that we do."

But what about Alcatel SA (NYSE: ALA; Paris: CGEP:PA), which has made acquisitions, developed a middleware system (the Open Media Suite) for the delivery of TV and video signals over telecom networks, and made solid progress with operators? (See Alcatel, Acer to Deploy IP TV in Taiwan, Neuf Says Oui to Alcatel, Belgacom Selects Alcatel, Telenor Opts for Alcatel's DSL, Alcatel Unveils Open Media Suite, and Alcatel Denies iMagic Fadeout.)

Graczyk says Alcatel is no more of a competitor than the other video system vendors, and that Microsoft has an advantage over the French vendor because "we are a software company, and this is a software solution. Alcatel is a hardware firm. We have the know-how and the experience."

He adds that Alcatel is considered more of a partner, as "many of our customers use Alcatel products. It's more of a 'coopetition' scenario." No one from Alcatel was available for coopecomment.

However, others in the carrier video systems sector are skeptical of Microsoft's potential. Talking at this year's Supercomm tradeshow in Chicago, Roger Shanafelt, VP of marketing at middleware vendor Myrio, said that "Microsoft has made announcements like this in the past, but they've never come through. We're waiting in the wings to see how they do. They have a great concept, but at the end of the day it's a Microsoft product." (See Myrio Rides Triple Play Wave.)

This isn't the first time Microsoft has had a crack at breaking into carrier networks, though its IP TV system looks likely to bear more fruit than its partnership with IP billing specialist Portal Software Inc. (Nasdaq: PRSF). (See Portal Gets Jiggy With Microsoft.)

— Ray Le Maistre, International News Editor, Light Reading