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Deutsche Telekom will Launch IPTV in 2006

In-Stat reports that Deutsche Telekom has agreed to use Microsoft�s IPTV Edition middleware platform for their deployment of IPTV in the second half of 2006. The Deutsche Telekom deal is Microsoft�s second largest with the largest presumably being the deal with AT&T for $400 million. Deutsche Telekom is upgrading its DSL infrastructure to VDSL2 in order to increase the bandwidth per home to up to 50 Mbps, enough for multiple HDTV streams.

The agreement with Deutsche Telekom brings the number of commercial agreements Microsoft has to 10. Three others, Bell Canada, Reliance, and BellSouth are for trials, not for commercial launches. Of course, if BellSouth is combined with AT&T, they are expected to use Microsoft in the former BellSouth territory.

The agreement is not surprising as T-Online subsidiary Club Internet began a pilot project with Microsoft in mid-2005. DT owns 90 percent of T-Online. T-Online also offers broadband in Spain as Ya.com, Portugal as Terravista, Austria, and Switzerland. Deutsche Telekom also has stakes in Slovak Telecom, T-Hrvatski Telekom of Croatia, and Magyar Telecom of Hungary, which in turn owns stakes in telcos in Montenegro and Macedonia. As the others launch video services, they too may follow the parent company�s choices. T-Online plans to offer triple-play services in France and Spain as well in 2006.

In Germany, T-Online has offered an entertainment service called T-Online Vision with on demand content available via the Internet for a few years. A set top box is available for those wanting to watch the content on their TV rather than their PC, but first-generation boxes were expensive so few were sold.

German cable operators have increased the pace of their network upgrades over the past year to offer their own triple-play services. There are 18 million cable TV households in Germany with 1.9 million digital subscribers. While the digital number seems low, it has doubled over the last 12 months.

About 15 million German homes do not subscribe to pay-TV, instead using satellite reception equipment to receive about 30 channels that are broadcast unencrypted via satellite. Deutsche Telekom will need to be a great improvement over traditional digital TV services in order to convince German households to become subscribers.

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