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November 15, 2012
Telefónica SA (NYSE: TEF) has teamed up with Microsoft Corp. (Nasdaq: MSFT) to develop what it calls its Global Video Platform (GVP) for the delivery of all IPTV and OTT video content to its 300 million-plus customers in Europe and Latin America. (See Telefónica Does Video With Microsoft.)
The GVP has been developed by Telefónica Digital using Microsoft's Mediaroom technology and is already being used to deliver video content to Telefónica customers in Brazil and Chile, with Spain to follow shortly.
The move isn't unexpected: Speculation that Telefónica, already a critical applications partner for the software giant, was consolidating its video delivery strategy around Microsoft's technology emerged early this year. (See Euronews: MSFT Linked to Telefonica IPTV Deal and Microsoft Gives Telefónica an Apps Edge .)
Why this matters
This move is noteworthy for two reasons.
First, Telefónica has historically had multiple video delivery systems, each dedicated to particular markets, media and customer types. Now it has started the move towards having a single, unified system that will deliver third-party content (OTT) as well as managed video (IPTV) to any type of device across any type of network.
While that seems logical and sensible, it still represents a breakthrough in strategic and operational thinking for a traditional telco: It's no surprise that this process is being managed by the operator's Digital division, which is shaking off the shackles of legacy communications service provider (CSP) thinking and adopting more Web- and cloud-savvy application management techniques.
Second, it confirms Microsoft as the premium telco video delivery technology partner. Telefónica, one of the first major operators to launch commercial IPTV services, began with an in-house developed IPTV platform, which it then handed over for further development to Alcatel-Lucent (NYSE: ALU). Now Microsoft is the preferred partner and that decision, along with Telefónica's video delivery strategy, will be noted by other major CSPs everywhere.
Kurt Steck, GM of Microsoft's operator TV, technology and services group, says Mediaroom is growing steadily and is now serving more than 11 million subscribers worldwide, up from 8 million, in the last 14 months. By comparison, competitor Minvera says its platforms power 2 million devices worldwide. The Telefónica deal also gives Mediaroom a bigger presence in Latin America, a market where it hasn't been widely deployed to date.
What will be interesting during the next few years is whether the Telefónica Digital team ends up working with any of the video application companies it's nurturing in its Wayra startup incubators and integrating those apps into its new video platform. (See Inside Telefonica's Startup Incubator.)
The Other Microsoft
5 Key TelcoTV Takeaways
Telefónica: A New Breed of Telco
Telefónica: Digital Dreamer?
— Ray Le Maistre, International Managing Editor, Light Reading
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