Monday, April 30, 2007

Telefonica buys into Telecom Italia

A consortium led by Telefonica is poised to spend 5.15B euros for a 23.6 percent stake in Telecom Italia. The consortium will buy Olimpia, the holding company that owns 15 percent of Telecom Italia. The members of the consortium already own 5.6 percent of Telecom Italia.

This is a bit outside of what I usually include in the blog, but I wanted to mention that this could affect Microsoft's prospects. Telecom Italia is using Alcatel-Lucent's OMP IPTV middleware but is still evaluating Microsoft's IPTV Edition middleware in its labs.

Alcatel-Lucent also the MiView TV IPTV middleware which was originally developed by Telefonica. I expect that Telefonica will encourage Telecom Italia to adopt this middleware software.

4 comments:

Ohad said...

Bob,

What happened to the MSFT-ALA alliance? first the lawsuit and now depriving MSTV of one of the biggest accounts it is pursuing at the moment?

Your piece 2 weeks ago about MSFT needing 600 (!!!) servers to support 1 million subs really blew me away. how can they be so inefficient? is it set-top box dependent or server dependent?

thanks

Bob Larribeau said...

It is not clear what is really going on between Microsoft and Alcatel-Lucent. I think the push to move to MiView will come from Telefonica and not from Alcatel-Lucent. Clearly, it will be happy to help if that is what Telecom Italia wants.

The big difference between Microsoft and everybody else is that all of the broadcast content goes through the servers. Microsoft does this so it can provide picture in picture and other features. Some of the encoder manufacturers such as Harmonic are implementing picture in picture and other features in the encoder. This helped reduced the server count to 600.

Ohad said...

you mean that in IPTV deloyments where HLIT is involved, they transfer some of the load from the MSTV servers to the encoders and 600 is as low as they can go???

Bob Larribeau said...

Ohad,

That is right. There are a lot of rumors floating around that the actual number of servers required is much higher. I quote the number Microsoft gave me.

The number of servers also depends on user behaviour. If the number of channel up and channel down commands is higher than expected, then more servers will be required to support fast channel change.

Using the Electronic Program Guide is a much smaller load because the viewer goes directly to the channel. The channel up and down buttons require many more channel changes. Microsoft's own consumer research indicates that the existence of fast channel change encourages the use of the channel up/down buttons.