Belgacom Considering New IPTV Middleware

Light Reading published an article saying that Belgacom is considering replacing its Nokia Siemens middleware. Light Reading thinks that Microsoft is the leading contender. The other major vendors supporting Microsoft are Arris/C-Cor for video on demand, Amino for set-top boxes, and Verimatrix for content security.

The Nokia Siemens middleware came from its acquisition of Myrio. Myrio's middleware was originally designed for the small U.S. independent telcos.

This is an interesting situation. It does not appear that Nokia Siemens has made the investment in the Myrio middleware to allow it to scale to meet Belgacom's needs and to support the next generation of interactive applications.

Microsoft's Mediaroom is an obvious candidate. I expect that Alcatel-Lucent will use its strong relationship with Belgacom to push the MyView middleware that it acquired from Telefonica. Thomson's middleware that is used by France Telecom should be another strong candidate.

It will be bad news for Arris/C-Cor, Amino, and Verimatrix if Belgacom its replaces Nokia Siemens middleware.

Nokia Siemens Introduces Middleware SDK

Nokia Siemens introduced a software development kit (SDK) as part of its latest IPTV middleware software release. This SDK allows for third party customizable user interface development on HTML and Java platforms. Operators and third party developers can customize and enhance IPTV offerings.

This SDK has been used by both Belgacom in Belgium and KPN in The Netherlands to customize their IPTV offerings for the last couple of years. Nokia Siemens in December will make this capability available to its other middleware customers and its small U.S. telco customers, in particular.

Belgacom has used the SDK to give the broadcasters the ability to provide a customized interactive interface along with its programs. The Belgian Idol program uses this capability to give viewers the ability to vote through their TVs for a price of one euro per vote. It shows the real time results of the voting, which creates an auction environment that encourages viewers to vote multiple times to support their favorites.

Belgacom also uses the SDK to provide a mosaic based electronic program guide (EPG). When using this mosaic EPG, the program is viewed using 65 percent of the screen. A mosaic of picture in picture windows of 16 channels around the TV window in the remaining space on the screen. The user then can request the next group of 16 channels or select one of the channels being displayed.

Nokia Siemens is taking the right approach. What it is trying to do is difficult and there are often limitations in these SDKs that limit their applicability. The proof of the pudding will be to see how successfully its customers are in using it to customize and enhance their services and to add applications.

Nokia Siemens Network Vision

Nokia Siemens held a webinar yesterday discussing its vision for Telco networks. It made a couple of interesting observations. One is that traffic will grow by a factor of 100. Since revenues are not likely to grow significantly, the cost of delivering this bandwidth has to decrease by a factor of 100. It said that somewhere around 60 percent or so of this cost decrease will come from Moore's Law and the increased density and performance of the chips. The rest of the savings will come from the flattening and simplification of these networks.

It also discussed the results of a service provider poll that it held with 900 respondents. Improving service quality is the number one factor over time. However, reducing cost and simplifying networks are expected to become the the number two and number three priorities, respectively, in three years.

Nokia Siemens also explained its decision to deemphasize GPON development. Its first reason is that the prospects for selling significant amounts of GPON over the next few years are not good. The market is sluggish and moving slower than expected. It also believes that VDSL is a very good alternative to GPON in the short run.

What Nokia Siemens does believe is that new technologies such as Hybrid PON and DWDM PON will start to appear in 2012 and will provide major improvements over PON. In addition to increased performance, these technologies will have the capacity to support unicast IPTV and to enable a significant network consolidation by eliminating the need for the current end offices.

There is a lot to what Nokia Siemens had to say. I think its PON strategy will be a good one if it can maintain its focus and be a leader in the introduction of these new technologies and if the GPON market does not heat up in the mean time.

Nokia Siemens Gives Up on GPON

Nokia Siemens announced that it will limit its investment in GPON because it does not expect mass market rollout of FTTH in the short term. Instead, Nokia Siemens will focus on ADSL-2+ and VDSL along with the development of next generation PON technology.

These next generation technologies include DWDM PON that can significantly expand the capacity of each fiber along with Hybrid PON that can extend the range of PON loops and facilitate the deployment of non-blocking IPTV aggregation/access networks.

DWDM PON will be enable the deployment of much higher speed PON services to each home and business. This will enable PON to meet future bandwidth requirements and extend PON into a broad set of business and enterprise applications.

Hybrid PON will permit the OLTs to be collocated in IPTV regional video headends, for example and create a network of dedicated connections to each subscriber. This will provide non-blocking access to each subscriber for unicast, on demand content. A 100 percent unicast service, such as this, will be required to support network PVR and interactive advertising applications.

This is a risky bet. If Nokia Siemens can beat it its competition to these new PON technology, it should be a winning bet. On the other hand, it will be hard for the company to maintain a strong focus on PON when it is not actively participating in the market.

Nokia Siemens Coming Together

I was at a Nokia Siemens Networks (NSN) analyst meeting in Munich last week. NSN spend one day discussing its optical transport/Ethernet switching strategies and a second day on its wireline access strategies.

What was most apparent was that NSN appears to have done a good job of integrating its two parts over the last year and has developed a strategic framework that makes sense and is quite consistent with that of Nokia itself. The key tenet of this strategy is that 5 billion people globally will be accessing the Internet by 2015 and that they will generate a 100 fold increase in traffic by that time.

NSN made a couple of interesting points about this:

• While wireless speeds will increase significantly over that time, so will wireline speeds. Wireline systems will maintain its 100 times performance margin over wireless and will continue to generate 99 percent of the traffic.
• 70 percent of revenues come from voice. While total customer spending may double based on the use of new data based services, the cost/performance of network elements will have to improve significantly in order that the telecom companies can maintain profitability.
• Networks will have to become more energy efficient over this time as well. Most network energy consumption is in the access network.

I have gotten behind in posting a number of interesting year end results announcements over the last week. Blogspot would not let me make posts yesterday afternoon. Everything is working now, so I will get back on track.

Siemens Developing Fiber IPTV Distribution Network

I had a hallway conversation at its analyst conference in Amsterdam this week, Nokia Siemens told me that it is developing a long reach PON system that will permit the OLTs to be located in the regional headends rather than the central offices serving the subscriber. There will then be an optical connection from the head end to each subscriber, which will eliminate any chance for the congestion that now can occur in Ethernet or IP metro/aggregation networks, especially when the demand for on demand unicast services is high.

This architecture is right in line with the report Networking Strategies for TelcoTV Services that we published a few months back. The conclusion in this report is that IPTV service providers will need to create a non blocking optical network rather than use an Ethernet or IP network to connect the regional headend to the OLTs in the serving central offices.

Few companies are stepping up to this requirement that is a direct result of the increasing amounts of personalization on on demand services that everybody expects to be part of the evolution of IPTV networks. It is good to see that Nokia Siemens is taking this seriously.

Nokia Siemens says Fiber is Green

Nokia Siemens stated that fiber is greener than VDSL in a presentation at its industry analyst meetings at Nokia World in Amsterdam this week. The main part of the presentation was about reducing the carbon footprint of mobile networks, primarily by reducing the power consumption of the base stations as well as by using techniques for turning off unneeded capacity.

In response to my question it pointed out that PON based FTTH architectures also reduce carbon footprint. On the other hand, VDSL increases the carbon footprint of a network because of the large number of remote systems that must be deployed.

I guess this means that fiber is just good all around. This is one more reason to select fiber.

Belgacom Retaining Nokia Siemens Middleware

Belgacom has extended its contract with Nokia Siemens for middleware software and integration services for another three years. Nokia Siemens will also provide set-top boxes to Belgacom to support HD services using MPEG-4 compression. Nokia Siemens has been providing these services to Belgacom since 2004. Belgacom had 191 thousand IPTV subscribers at the end of June 2007.

This settles this issue for Nokia Siemens. We had picked up rumors that Belgacom would move to the Alcatel-Lucent MiView middleware software. Clearly, this has not come to pass.

Nokia Siemens Chasing Tellabs?

There are rumors that Nokia Siemens Networks is trying to acquire Tellabs for about $7 billion, about a 40 percent premium over its stock value.

This acquisition would really push Nokia Siemens ahead in FTTH and IPTV access systems, especially in North America. Tellabs is doing well at Verizon and has excellent growth prospects, just on the basis of that one account.

Nokia Siemens Networks Starts Up

Nokia Siemens Network started operation yesterday, April 1. It is a combination of the telecommunications operations of its two owners, Nokia and Siemens. The company expects very slight market growth for both fixed and mobile infrastructure globally. Consequently it is updating its view of the outlook for these services.

This merger is likely to have a strong effect on Siemens IPTV efforts. Nokia has not had any significant participation in the IPTV market globally. It seems likely that the company will increase its focus on Tier 1 carriers globally.