IBC2007: Verimatrix Is Securing Cable IPTV Services with GoBackTV’s CMTS Bypass

On September 4th Verimatrix announced an OEM partnership with GoBackTV to integrate the Verimatrix Video Content Authority System (VCAS) with GoBackTV’s CMTS bypass technology, providing a cost-effective solution for cable operators to meet the increasing demand to deliver HD and VoD services by delivering secured IPTV streams. The combined solution converts existing cable systems into asymmetric IP networks, enabling cable operators to avoid costly infrastructure upgrades, reclaim bandwidth, and reduce cost via access to a wide variety of IPTV consumer premises equipment.

Analytical Summary

► Current Perspective: Positive on Verimatrix announcing its entry into the cable market via an OEM partnership with GoBackTV, because the combined solution will enable smaller cable operators to meet increasing demands for high-definition (HD) and video-on-demand (VoD) services by delivering secured IPTV streams without costly upgrades to their cable modem termination system (CMTS) infrastructure. The launch of the Verimatrix content security solution for cable IPTV is well timed to leverage IBC 2007, broadening the marketing reach of the new offering, which also promises to enhance cable subscriber acquisition potential by providing access to a wide variety of IP set-top-boxes (STBs).

► Vendor Importance: High to both Verimatrix and GoBackTV, because the integration of the Verimatrix Video Content Authority System (VCAS) with GoBackTV’s “CMTS bypass” technology enables Verimatrix to expand its downloadable content security leadership into the cable market with a cost-effective solution for delivering secure IPTV services that provides cable operators with efficient bandwidth management capabilities. The announcement provides Verimatrix with a first-mover advantage, by entering the low-end of the cable market with a disruptive cable delivery technology (i.e., CMTS bypass), without disrupting its established partnerships and channels at the high end. GoBackTV gains Verimatrix’s proven experience delivering content security solutions to IPTV and hybrid broadcast/IP environments, as well as the global installation, training, and support provided by Verimatrix.

► Market Impact: Moderate on the content security and CMTS market segments, because while Verimatrix’s VCAS solution is widely deployed in telco IPTV solutions, the VCAS for Cable IPTV solution enters Verimatrix into a new market (i.e., cable) with a video headend/CMTS partner that brings an innovative technology proposition but limited footprint. Indeed, while GoBackTV’s CMTS Bypass technology has been successfully tested at BKG-Neuruppin in Brandenburg, Germany, the VCAS for Cable IPTV announcement lacked a customer endorsement, indicating that converting opportunities in this new market niche (i.e., smaller analog-based cable operators looking to add IPTV services) will take time.

| Client Access - Digital Media Infrastructure | Client Access - Carrier Infrastructure |

Tellabs Adds Ethernet Switching and Aggregation to 7100 OTS

On August 21st Tellabs announced that it is incorporating Ethernet switching and aggregation capabilities into its 7100 Optical Transport System (OTS). New Ethernet capabilities, including a native packet switch fabric, are designed to make the 7100 OTS platform more capable of handling TDM-to-packet migrations as carriers seek to leverage Ethernet in their optical transport networks. The new features are slated for general availability in Q4 2007.

Recommended Competitive Responses

► Alcatel-Lucent and FNC-Fujitsu will contend that their universal switch fabric approach to TDM-to-packet switching migration is more elegant than what is most likely a dual-switch fabric approach taken by Tellabs and others. In theory, a universal switch fabric supports any mix of TDM and packet switching within the same switching matrix. As such, both vendors can make the argument that investment into a single switch fabric saves on CapEx and OpEx compared to products that require two separate switch fabrics to deliver both TDM and packet switching capabilities.

► All competitors should point out that most of Tellabs’ traction for the 7100 OTS is the result of legacy WDM deployments, rather than as part of new deployments aimed at facilitating TDM-to-packet migration. Toward that end, because most of the 7100 OTS chassis currently in service are older-generation products, the path to incorporating new features into existing gear will likely require more than a simple line card insertion and software upgrade.

► All optical competitors with existing Ethernet aggregation capabilities – via either MSPP or standalone Ethernet aggregation devices – are already a common aspect of most packet optical transport platforms. As such, a good portion of Tellabs’ announcement points to the vendor’s attempt to catch up with the market, rather than lead with cutting edge features that provide capabilities that are not already widely available from rival equipment providers.

► Carrier Ethernet equipment suppliers should highlight their purpose-built platforms that provide carrier-grade Ethernet services with greater densities and features such as extensive QoS and OAM capabilities that are more cost-effectively performed in a dedicated switching and aggregation platform. Most next-generation Ethernet platforms provide 10 GigE interfaces that can interoperate directly with existing optical gear, which would provide a cost-effective approach to transporting Ethernet traffic over the optical infrastructure.

| Client Access - Optical Infrastructure |

Advisory Report

Is Sprint Bad for WiMAX?

| Module: Wireless Infrastructure | August 29, 2007
| Analyst: Peter Jarich, Research Director, Telecom Infrastructure, Mobile Networks and Carrier Core

Recommended Competitive Responses

With initial markets planned for launch by the end of this year, Sprint has spent the last few months aggressively telegraphing its WiMAX plans. Following an announced deployment, sales, and branding tie-in with Clearwire, Sprint gathered the media and analyst community together to unveil the brand for its WiMAX business (XOHM), provide further details on its WiMAX business model, and demonstrate planned user scenarios. Shortly afterwards, Sprint announced that Samsung had been awarded the New York City WiMAX build-out, signaling that network construction planning shows no signs of slowing. It is no exaggeration to suggest that Sprint has shifted its WiMAX marketing machine into overdrive, doing all it can to link its name to the future of WiMAX and mobile broadband.

Yet, as much as Sprint has driven WiMAX into the market’s thinking over the past year, there is no shortage of valid concerns about its strategy. Can it execute? Can it execute in-line with the expectations it has set? How representative are its plans of operators elsewhere? How representative are its assets? What do the answers to these questions mean for WiMAX more broadly?

Current Analysis Perspective

While Europeans are still clamoring to get their hands on the iPhone, rumors are already beginning to circulate about an upcoming 3G model. Forget them. Something better is on the horizon.

Identical in form to the current 8-Gig device, the new wiPhone will support WiMAX instead of EDGE. Yep, no more molasses-like downloads. The promise of full, open Internet access on the go will be fully realized. Users will still benefit from Sprint’s work with Google, but they will not need to rely on a specially designed portal to enjoy the Web. The wiPhone will not be subsidized, but it will not be connected to any specific operator either. Sure, it will be expensive, but it will be worth it.

For the record, I’m joking. Still, there is a point.

| Client Access - Wireless Infrastructure |