February, 2003
iMagic Purchase by Alcatel - the Start of a Trend?
by Ken Pyle
Does the take-over a Canadian-based company by a French-based company mean the resulting company will be French-Canadian? This and other questions came to mind as I found this to be an interesting development since it could signal the beginning of further consolidation between middleware and equipment providers that supply the components necessary for independent telcos to deploy interactive and on-demand television.
What does this development mean to independent telcos?
In one sense, it is probably a positive development as it indicates that this service is being taken seriously by the largest of telecom providers. The seriousness of these larger telecomm manufacturers with regards to this market is further evidenced by Motorola’s proposed takeover of Next Level and Tut’s acquisition of Videotele late last year.
It also indicates a maturing of the marketplace. It is very typical in new technology to see the early pioneers absorbed by more established and larger organizations. As the acquiring company absorbs the new entity, they are able to reduce overlap and, potentially reduce costs for the telco. From a telco perspective, the good news is that some real industry heavyweights are getting behind their efforts to help them bring television over their existing plant.
The cautionary note is whether vertical consolidation, from middleware to access to, potentially, set-top boxes, will slow innovation and stifle competition? Will there be efforts to create standards and interoperability for interactive telco television, much like the cable industry has done with CableLabs or will each vertically integrated supplier create proprietary solutions. Should the independent telcos have their own version of CableLabs to address these questions, especially with regards to consumer electronics interface issues? Lots of questions to be answered going forward.
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