Las Vegas-Pace Micro Technology plc will supply BellSouth Corp. with 200,000 digital set-tops, paving the way for it to become the first telco to enter the direct-to-home satellite business with a non-resale offering.
Pace will deliver the DVB-based (Digital Video Broadcasting) boxes-which will include integrated chips with embedded processors that can handle 175 million instructions per second (mips), as well as 16-bit graphics capability and software telco modems-within 12 months.
The two companies announced their agreement during the annual Satellite Broadcasting & Communications Association convention here last week.
"These boxes will allow BellSouth to offer more integrated services, opening the door for them to use different kinds of software so they can better compete against cable operators," Pace vice president for new business development Neil Jones said.
BellSouth will use the set-top boxes to launch its plans for offering DTH satellite services to 14 million households throughout its nine-state service territory.
"As the first telco to offer its own satellite service in the United States, we searched worldwide for a developer with broad enough experience in satellite technology, as well as in other digital platforms, and with sufficient speed to market to help us grow our business," BellSouth Entertainment president Bob Frame said in a prepared statement.
BellSouth originally planned to have Pace develop digital set-top boxes for the wireless cable service it offers in seven states-a business that has evolved into a satellite service.
For Pace, the agreement with BellSouth marks its first foray into the U.S. satellite business. It previously announced long-term deals to supply Time Warner Cable and Comcast Corp. with 750,000 and 350,000 digital boxes, respectively.
Jones said Pace "cut its teeth" on the satellite industry in Great Britain, where its largest customer is British Sky Broadcasting Group plc, England's largest satellite operator.
He added that with 14 million homes in its service territory, BellSouth will need more than 200,000 set-top boxes. "We're not limiting them to 200,000 boxes, and they're not limiting us to 200,000 boxes," Jones said.