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Alcatel's Olivier Baujard Talks Interactive TV

His company wants half the market for IP television.

TEL AVIV, Israel -- At a gathering of European investors and Israeli tech companies last week, Olivier Baujard, chief technology officer of



, spoke to

about his vision of the "triple-play" telecom revolution -- the convergence of voice, high-speed Internet and video over any device, anywhere.

As one of the world's leaders in broadband access networks, Alcatel strives to outfit "as many operators as possible" in the race to equip the home with interactive, Internet protocol-based television, or IPTV, Baujard said.

Alcatel is shooting for an IPTV market share of at least 50% worldwide, concerned that "wherever there are too many players, there is no money to be made."

How much of the triple-play revolution is already here and happening?

Triple play has been talked about for years; it is not a new concept. But today, both the competitive environment and the technologies are ready for it; the trend is now materializing in the markets.

A certain number of major operators have already decided to completely rejuvenate and migrate their networks just to be able to accommodate triple-play services, and each of these rejuvenating plans are in the billions of euros.

Two operators that have already made multibillion-dollar commitments to moving their networks to IPTV are SBC, which at the end of 2004 -- prior to its merger with


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-- announced the deal with Alcatel; and


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, the Australian telecom company.

Many other are going to follow. Because it is not just a regional thing, it is the complete rebuilding of the fixed carrier. Fixed carriers see that they are being attacked by the mobile carriers ... and by the free VoIP services.

How are these carriers going to respond, or "reinvent their future," as you say?

It means that the fixed carriers are making sure they have the capabilities to offer a true broadband, interactive relationship with the customers, and provide them with a bundle of new services. No longer voice-only, or high-speed Internet-only, but whatever they can imagine to push to the customers: gaming, TV, video-on-demand, e-commerce, everything that goes into an enhanced customer experience.

Tell us about "AmigoTV"

This service is the personalization of the TV. It lets viewers exchange information and impressions of programs they watch.

For example, you can see when a friend of yours is watching the same soccer game on TV as you are and exchange your impressions with him by a little icon on the screen that tells you he is watching the game, too.

So, who is using this new service?

It is being currently labbed in several client sites in Europe and will be announced in the second quarter of this year.

Baujard expects between three to six service providers in Europe and "maybe" in the U.S. to launch the AmigoTV service in 2006. Revenue from this service is expected to be several euros per user for each IPTV feature.

What is IPTV all about?

The TV is an Internet protocol, which makes e-commerce over it possible. Say you are watching the fashion channel, and you want to know more about a dress or a jacket you see there. You can click on it and a pop-up will appear with the information you want. In an IP session, you can link different applications to the TV experience. This type of feature will be pushed to the market in 2006 for the very first time.

How many IPTV users are out there right now?

There are probably 2 million subscribers worldwide for IPTV. As for broadband access, there are probably 20 million. Alcatel owns about 50% of the IPTV market share, considering that we provide either the entire service, or the software package we created with


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, or the access layer.

According to Baujard,


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is Alcatel's major competitor, while the rest of the competition is very fragmented.





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have many other things, but in IPTV they have nothing to be noticed. For the time being, the big value in our competitiveness is from Microsoft being with us.

What is your vision for the IPTV future?

First, wherever there is a fixed line, it will most likely become broadband. Secondly, wherever there is broadband, there will be IPTV, because everyone will compete for that space. Telcos, cable companies, wireless operators. Providing a true triple play, interactive IPTV is, most probably, where all the service providers will go.

When will this revolution happen?

In the U.S. and Western Europe, I will not be surprised if more than 50% of the homes in the next five years are equipped.

What milestones to you expect Alcatel to achieve this year?

The big thing for 2006 will be the opening of commercial service by SBC. I can't reveal the precise nature of the services, but once it is launched I am sure


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will try to do their own deployment in the same time frame.

So who does Verizon partner with for IPTV?

Verizon is partnering with other vendors such as Lucent. For the access network they are not with us yet, but we are working on it.

What's the outlook for fiber?

There is ADSL, fiber to the node, and there is fiber to the home. This will be another crucial year, in which we will see much larger implementation of fiber to the home more than ever before, because the technology is more mature and the economics for triple play are good for the fiber-based systems.

How is this different than the late-1990s fiber-optic mania that eventually led to the glut in the long-haul market?

You had everybody betting on the long-distance, super-high-capacity systems. So when everybody has the same idea the market shrinks. Yes there was traffic, but since there were six companies who laid submarine pipes instead of two, they had to lower prices.

Now we are talking optics in the access level, which is not the same product, though it's the same technology. We are talking now about volumes of millions of new homes each year, a market that is differently positioned than that of long-distance. Optics are booming again because the demand for DSL has grown exponentially in the metropolitan area.

We are emerging from a period where we had a multiplicity of connectivity sources. This connectivity world of separate mobile operators, voice and TV-service providers is behind us now. We are now in the middle of a broadband wave where we see broadband reaching the home via various technologies. This is the first step towards the unification of all the services and all the access capabilities, so that ultimately the end user will have a very simple environment of communicating with the rest of the world, via any device, any protocol, anywhere.