You know the IP-TV business is getting serious when there’s an IPTV World Forum happening in London. Of course, Nortel will be there demonstrating “how real-time multimedia and entertainment services can be converged onto the TV to improve the user experience by providing greater control over the home communications environment.” Nortel will also unveil a new partner for developing new TV services.
On the IP-TV front, the biggest news recently was Ericsson’s intention to buy Tandberg TV for $1.4-billion – a 10% premium to Arris’s offier. In a recent report, UBS Securities said Ericsson’s flurry of IPTV deals recently illustrate how serious it has become about the business, although the investment firm suggests integrating these purchases may be a challenge. Of the other big telecom suppliers, UBS said Alcatel/Lucent may have to respond to Ericsson’s move by acquiring encoding/video-on-demand technology, while Cisco is well-positioned. UBS said Motorola lacks edge routers, metro and access technology, Nokia-Siemens’ portfolio does not include encoding/VOD and edging routing, while “NT’s competitive position in IPTV remains weak”.
“While Nortel’s public stance is to compete in the IPTV market, its competitive position is very weak in our view as it only has the Metro transport part of the solution,” UBS said. “While the company could pursue acquisitions to quickly enter the IPTV market, there would be many product holes to be filled in, including Access, Edge Aggregation/routing, Encoding/VOD, and Middleware, making any entry in to the IPTV market tough and likely irrational in our view. We believe Nortel shareholders would not view acquisitions in the IPTV market favorably.”
Update: Accenture recently released a study on IP-TV. Not surprisingly, more than half of communications industry executives believe IP-TV can generate significant revenue within the first three years of service.