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Nortel not the only winner at Telus IPTV deal

Small fry win out over big guns

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Comment If Nortel was unable to unearth a telco willing to give it a shot at building an IPTV service in its native Canada, then it would surely have been frozen out of the market forever.

And when a quite a few years ago Telus chose to go with OMP and Alcatel, a major chance appeared to have slipped through its fingers.

But now it is back as the main contractor in an IPTV deal at Telus - a move that sees the Alcatel system thrown out or sidelined, the Microsoft Alcatel partnership that is dominating tier one telcos, snubbed, and a number of the small fry of the IPTV market getting access to the tasty 5.5m Telus customers this system is aimed at.

What the Nortel announcement doesn't tell us is that the system will be built around Minerva middleware, Widevine DRM, use its old existing VoD servers that are built around a defunct Oracle offering, and the encoders at its head end will remain in place, while Telus is still out to tender for set tops, with Thomson apparently already in the frame and Cisco's Scientific Atlanta likely to get the second berth.

Nortel itself gets to sell a few switches, and perhaps upgrades the Telus IP network, and the access network is presumably still built around Alcatel DSLAMS and ISAMs, all with Nortel as prime contractor.

Faultline gave a heads up about this contract in May, when we heard that Microsoft's solution was internally rejected.

"Telus is working closely with Nortel to create a unique communications and entertainment experience for our customers that we call the Future Friendly Home," Telus chief technology officer Ibrahim Gedeon said.

"We are building an innovative platform that will provide us differentiated services today and as we move into the future with a converged multimedia-centric infrastructure.

"It was important to find a partner like Nortel who could provide an evolution path to a converged services environment that incorporates IPTV as one of many applications.

"To facilitate the rapid adoption of additional third party applications as they emerge, it is imperative that the environment be open and standards-based."

The significance of this contract is that all the big guns from Microsoft, Alcatel, Lucent and Siemens were in the bidding and fell by the wayside and that Nortel was able to leverage its strength as an IP player.

A 10 per cent or 20 per cent penetration of IPTV into this Telus network would mean it would become one of the biggest IPTV deployments outside the proposed system at AT&T in the US, which has yet to be scaled.

Telus remains a tier two opportunity, which perhaps didn't attract the same attention that a tier one carrier would have, but it is still indicative that the companies that have been in IPTV for the past five years can still win reasonably large contracts, when the market is not frozen by indecision.

That Minerva has won the all important middleware business must owe something to its strategy change this past six months, where it has dropped all pretence that it operates in the encoder market and gone about making friends with Harmonic, Optibase, Tandberg, and Tut systems and which was seen at IBC last week sporting Scientific Atlanta equipment in its demonstration.

Cisco's Scientific Atlanta is understood to be taking the Minerva software to heart to the point where it will build its own internal competence centre around it, and pitch it wherever Microsoft is not already the incumbent middleware offering.

If that results in any new business for Cisco then acquisition of Minerva can't be too improbable, and then it would own an end to end IPTV system, with or without Microsoft middleware.

Copyright © 2006, Faultline

Faultline is published by Rethink Research, a London-based publishing and consulting firm. This weekly newsletter is an assessment of the impact of the week's events in the world of digital media. Faultline is where media meets technology. Subscription details here.

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