Source: SBC Plans IPTV for Businesses

After SBC gets its arms around selling IPTV to households, the RBOC plans to sell an enterprise video service to corporations

October 19, 2005

4 Min Read
Source: SBC Plans IPTV for Businesses

SBC Communications Inc. (NYSE: SBC) will announce later this year plans to extend its IPTV service from residences to its high-value corporate customers, a technology supplier close to the situation tells Light Reading. (See SBC: IPTV's Day Has Come.)

SBC's coming enterprise video service will leverage the RBOC’s work with Microsoft Corp. (Nasdaq: MSFT) TV, its existing enterprise relationships with companies in 13 states, and several new business customers it will get from the acquisition of AT&T Corp. (NYSE: T). (See IPTV: Microsoft's Window to Carriers.)

SBC’s enterprise product will originally deliver video and data over fiber, the source says, and may initially include AT&T’s VOIP service. Later on, services from Cingular Wireless LLC, which SBC co-owns with BellSouth Corp. (NYSE: BLS), may be bundled into the offering as well. (See Enterprises: More Fiber in the Diet? and Vetting SBC's VOIP.)

SBC is planning a limited rollout of its U-verse residential IPTV service in November, our source says. The company will begin adding features and stability with a second release in the first half of 2006, then another in the second half of 2006 if everything goes to plan. SBC also says it wants to "enter more markets beginning in mid 2006."

IPTV's bi-directional nature, which allows a subscriber to become a content provider, is particularly important in developing an enterprise video product. SBC's system, as described to Light Reading, employs a hierarchy of "content contribution" privileges to people at various levels in the organization. The solution provides selected users with tools, as well as a special user interface, with which they can create and distribute content to other employees.

In the enterprise setting, the SBC IPTV product is a system of building and hosting data, in contrast to the residential product which is largely a distribution channel from pre-existing outlets (studios, broadcasters, and movies-on-demand services). However, SBC did boast that users of its residential IPTV service could create their own channels that friends and family could watch -- a feature that sounds like an early blueprint to our source's description of SBC's enterprise video service. (See Inside SBC's IPTV Factory.)

There will likely be ample opportunities for SBC's brand of "business TV" in the enterprise world. For instance, an airline might use the system to distribute entertainment and safety content to passengers in its terminals. Using the same distribution system, the airline could also serve up policy and training videos to employees in its corporate offices.

Universities might host content for students that can only be contributed by instructors or administrators. And a big company, like IBM, might use the IPTV product to roll out sales or training videos to its salespeople and field technicians.

SBC's eventual offering of video services to enterprises is no surprise to many in the IPTV community. With its existing IPTV product and deep corporate relationships, SBC is well-positioned for the market. But with Wall Street waiting to see if SBC's residential video gamble will pay off, the enterprise market may come to be seen as insurance money for the RBOC.

And some wonder if SBC will first target offices full of cubicle dwellers, or perhaps more public places. "There are a couple of ways businesses use TV but I'd assume that the initial target would be businesses that have public areas where they want to show TV, like sports bars," says Matt Cuson of middleware provider Minerva Networks Inc..

SBC has long planned on going after the enterprise market with its integrated video, voice, and data product bundle. The RBOC may have chosen to pursue the residential market first in order to shore up its triple-play offering against the threat of non-traditional voice providers like cable companies and VOIP services. The result of that competition, along with advances in voice technology have lead to a flattening of voice revenues, which has long been the RBOCs' meal ticket.

While cable MSOs are now making an effort to penetrate the enterprise market, SBC has a clear edge. SBC and AT&T have far more connections to, and far deeper relationships with, corporate America than do the cable guys.

Microsoft denied that they are developing an IPTV solution for enterprises. An AT&T spokesman pled the fifth by saying his company is "not part of SBC... not yet."

And SBC was less than forthcoming on its future enterprise video offering, but it didn't smack down the idea. "Down the road we will explore whether to introduce business offerings that take advantage of the platform and the greater bandwidth," says SBC IPTV spokeswoman Denise Koenig. "But for competitive reasons all I can say is that we're really focused on consumer offering right now, and I cant really go into details beyond that -- for competitive reasons."

— Mark Sullivan, Reporter, Light Reading

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