U.S. communications tech company Lucent Technologies has inked a deal with leading Spanish telco Telefonica under which Lucent will market the international rollout of Telefonica’s broadband TV system, beginning in Brazil, Chile and the Czech Republic.
Lucent chairman-CEO Patricia Russo and Telefonica chairman Cesar Alierta signed the accord creating the strategic alliance on Wednesday in Miami.
Thanks to Spain’s relative market immaturity for low-end pay TV and triple-play services, Telefonica’s Spanish IPTV service, Imagenio, is one of the biggest in Europe.
Offering video-on-demand, interactivity and a basic package of niche TV channels, the ADSL TV service boasted at the end of 2005 some 207,000 subscribers — a figure bettered in Europe only by Italy’s Fastweb, which has 225,000.
Lucent and Telefonica aim to introduce Imagenio technology and services into markets where Telefonica has a strong fixed-line and mobile phone presence.
Deal also will see Lucent updating Imagenio’s proprietary middleware and establishing IPTV R&D centers in Madrid and the northern Spanish town of Huesca, as well as Latin America, linked to Lucent-owned Bell Labs.
The major question mark hanging over IPTV is how significant it could become as a pay TV system.
According to a Screen Digest report, IPTV reps 1.6% of Europe’s pay TV market, which could rise to 12.5% by 2010. IPTV may have better prospects in emerging markets, and Telefonica runs telco ops in 14 Latin American countries including Mexico, Brazil and Argentina.