Siemens Pushes IPTV

Siemens Communications Inc. is tapping Tut Systems Inc. to roll out Siemens SURPASS Home Entertainment middleware services to telephone carriers in North America, the company said Monday.

Siemens' Internet protocol television (IPTV)platform is from Myrio, a Siemens company. The package includes Myrio Interactive, a set-top box application, and TotalManage, software for subscriber and content management.

Tut Systems packetizes content from satellite broadcasters, such as TNT, CNN, and HBO, and makes it available for use on IP networks. Ryan Petty, vice president of product line management at Siemens Home Entertainment said the company also re-encodes the content into H.264, an ITU standard for compressing video.

"The agreement with Tut shows our commitment to the independent carriers in the United States," said Petty. "There already are more than 100 U.S. carriers quietly deploying IPTV to subscribers."

H.264 promises to deliver content at about half the bit rate of MPEG 2, which is approximately 1.5 Mbit/s. Petty said a faster bit rate is important for telephone carriers attempting to add channels to IPTV over DSL offerings and deliver to more set-top boxes. The two-way digital data and video streams between carrier and subscriber requires faster transmission speeds to maintain high quality of service (QoS).The two-way streams also give telephone carriers the ability to collect data from subscribers, which industry experts said is nearly impossible to do on a satellite network and difficult on cable. The data could be used to help determine the type of content subscribers want most.Siemens's long-term strategy is to push out the service through electronic retail stores, such as Best Buy Inc., but the nascent technology is changing rapidly and the market is still too small, Petty said.

Despite future plans, Siemens is relying on Tut Systems's media content and system integration services for data and video services over broadband networks to build out the North American IPTV market. The agreement could increase net income for both companies.

Tut Systems would welcome the boost. On Jan. 30, the content provider delivered improved annual revenue for 2005, but reported an operating loss. Revenue for 2005 reached $37.4 million, with an operating loss of $17.5 million, or 60 cents per share; compared with $25 million and $13.4 million, or 63 cents per share, respectively, in the prior year.

Siemens has about 85 commercial customers worldwide that offer IPTV to "tens of hundreds" of connected subscribers, Petty said. Many of the operators are overseas, such as KPN Royal Dutch Telecom and Belgacom in Europe and Advanced Datanetwork Communications (ADC) in Thailand. Today, Siemens’ IPTV contracts cover more than 38 million broadband lines worldwide.

China’s Shanghai Telecom Co. Ltd., and Shanghai Media Group (SMG) in December reported collaborating with Siemens to offer IPTV services to a market that includes 25 million broadband users and 360 million television viewers.0