SBC Communications Inc. last week awarded Internet-protocol TV set-top contracts to Scientific-Atlanta Inc. and Motorola Inc. for its video rollout, slated for later this year. No financial terms of set-top shipment orders were released for the contracts that run through the end of 2008.
“This is a major technology milestone for IPTV,” SBC senior executive vice president of IP operations and services Lea Ann Champion said in a statement. “A number of different technology components have come together to ensure the set-top boxes can efficiently support the features and functionality we plan to deliver to our customers.”
The set-tops won’t have tuners, allowing multiple video streams to be sent to one set-top. SBC plans to use two advanced compression standards, MPEG-4 and VC-1, to make DVR storage more efficient.
Both boxes will use Microsoft TV IPTV Edition software. Sigma Designs Inc. and STMicroelectronics are supplying chip sets.
SBC is currently testing IP video-network equipment from S-A, including the IP-switching infrastructure it will use. SBC said it expects to use Motorola set-top boxes initially when it scales the service, followed by S-A.
The other two major technology pieces still outstanding are vendors for the IPTV residential gateway and VOD servers.
SBC didn’t release figures, but it appears the set-top order could amount to 1 million to 2 million boxes per vendor.
The telco projects its Project Lightspeed will pass 18 million homes by the end of 2008. At roughly 10% penetration, that would place video service in 1.8 million homes. At two set-tops per home, on average, SBC would need 3.6 million to 4 million set-tops, seemingly split between S-A and Motorola.
A blended set-top box price of $200 across various models, multiplied by 4 million, would amount to $800 million.
It’s the first announced IPTV set-top contract for Motorola. Motorola Connected Home Solutions vice president of product management, IP set-tops Federico Sanchez said the vendor’s IPTV box road map looks similar to its cable product line, with basic standard-definition or HDTV boxes, followed by a tier of combined boxes with digital video recorders and then home-networking configurations with HD DVRs.
Motorola’s basic IPTV box supports various middleware companies, contains standard digital and audio outputs, features processing speeds between 300 and 400 millions of instructions per second (MIPS) and a base level of 32 Mb of flash memory.
Sanchez said Motorola’s prior work with Microsoft, its set-top history and SBC’s contract with Motorola on the wireless side helped clinched the deal. With SBC and other potential deals, Sanchez expects Motorola’s IPTV business to be strong.
“We expect a large volume,” he said. “We’re very optimistic.”