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March 9, 2007
The successful acquisition of Tandberg Television would help Ericsson AB (Nasdaq: ERIC) play catchup with some of its main telco TV rivals in terms of technology, customers, and deployment experience, says one of the executives behind the bid for the encoding systems specialist. (See Tandberg Board Backs Ericsson Bid , Arris Drops Tandberg TV Bid , and Ericsson Offers $1.4B for Tandberg TV.)
Speaking to Light Reading at the IPTV World Forum event in London this week, Anders Bergtoft, who is head of Content and Media within the vendor's Multimedia Solutions Business Unit, said he isn't concerned by suggestions that Ericsson is trailing the likes of Alcatel-Lucent (NYSE: ALU) and Siemens Communications Group in the IPTV world, as "this is still a small market at the very early stages of development." (See Europe to Dominate IPTV Growth.)
However, he said that adding Tandberg TV to Ericsson's business would deliver important benefits, including a ready-made video systems customer base that includes BT Group plc (NYSE: BT; London: BTA), Telus Corp. (NYSE: TU; Toronto: T), China Telecom Corp. Ltd. (NYSE: CHA), BCE Inc. (Bell Canada) (NYSE/Toronto: BCE), Swisscom AG (NYSE: SCM), and T-Com . (See T-Com Croatia Uses Tandberg TV.)
"Tandberg TV has been involved in a lot of deployments -- they have a lot of experience," he states.
But that's not all. In addition to the high-capacity video encoding and compression systems for which it is best known, Tandberg TV also has important applications-focused technology, such as headend-based advert insertion capabilities, which Tandberg acquired when it bought GoldPocket in late 2005. (See Tandberg TV Buys GoldPocket.)
In fact, Tandberg TV has been on quite a spending spree in the past 18 months. (See Tandberg Compresses SkyStream and Tandberg TV Buys Zetools.)
Those capabilities would significantly bump up Ericsson's portfolio in terms of video-specific technology, integration experience, and reference customers, areas where Ericsson has some catching up to do.
Like Nortel Networks Ltd. , Ericsson was relatively late in committing itself to the IPTV space, having announced its intention to be a major telco TV player in the summer of 2006. And it only recently announced its first public telco TV engagement, a relatively small deal in Iceland. (See Ericsson Brings the IPTV and Ericsson, Nortel Push on IPTV.)
Since then, though, Ericsson has cited its desire to be involved in carriers' video service plans as a driver behind two significant infrastructure acquisitions, of IP equipment vendor Redback Networks Inc. and fiber access technology specialist Entrisphere Inc. . (See IPTV Drives Ericsson to Redback and Ericsson Buys Entrisphere.)
So will Ericsson beef up its in-house IPTV capabilities even further? Many industry executives believe the company will also look to tie down video server partner Kasenna Inc. , but Bergtoft declines to comment on whether there will be an acquisition or not. "All I can say is that we have an OEM deal with Kasenna and we're very happy with that situation."
What he can confirm, though, is that there won't be any money spent buying a set-top box company. And there won't be a need to buy an IPTV middleware player either, as Ericsson has developed its own platform.
While partner Kasenna has a middleware product that Ericsson can resell, "we are doing a lot of software development work, and have developed our own IMS-based IPTV middleware," says Bergtoft, developed using in-house experience from Ericsson's mobile TV business and from hiring some experienced new blood.
The IP Multimedia Subsystem (IMS) part of the equation comes from the middleware's ability to interact with network elements that incorporate CSCF (call session control function) and PDF (policy decision function) capabilities to manage sessions and bandwidth availability. (See IMS Guide.)
Bergtoft says that product is due to be trialed this year and go into commercial deployment in 2008.
Ericsson has also been working with its mobile handset partner, Sony Corp. (NYSE: SNE), to develop IPTV user interfaces that "have the same look and feel as the Sony Playstation in terms of the look and feel for navigation. We're going to do a lot of customer research to find out exactly what consumers want."
The Ericsson exec couldn't help but take a swipe at his former employer and IPTV system rival, Microsoft Corp. (Nasdaq: MSFT), Alcatel-Lucent's main ally in the telco TV world and the sector's leading proponent of the importance of fast channel change capabilities.
Bergtoft noted that "some companies talk about how important fast channel change is, but that's not going to be an important feature [to develop] because many people already have that, and in a few years everyone will have fast channel change capabilities. I don't think that's going to be a big story."
— Ray Le Maistre, International News Editor, Light Reading
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