Media companies, telecom rapidly converging

The growth of broadband networks is providing an anchor for a frenzy of activity between telecommunications and media companies trying to find ways to deliver personalized media content, Internet access and phone service to consumers, industry experts said Thursday.

Broadband is finally hitting the mass market, and is now connecting the traditionally separate universes of television, mobile communication, broadband Internet access and fixed telephone services, said Charlie Davies, senior industry analyst for Ovum Ltd. Belgium leads in broadband penetration at around 39 percent of the European market while Germany brings up the low end at 20 percent.

Davies was one of several speakers at "SunLIVE Telco and Media 2006," a half-day seminar in London hosted by Sun Microsystems Inc. focusing on IT strategies telecom companies are using to deliver digitized media content and services.

The market dynamics are moving quickly now because of broadband, driven by price competition and consolidation by businesses, Davies said. Consumers want cheap prices, more services and personalized content, she said.

Content providers will have to deliver functional technology that's simple, content that's friendly and on one bill, what could be called the "holy grail" of convergence, Davies said.

Sun is preparing for the day when every consumer item will be connected to a network, said Caroline Ward, U.K. and Ireland business manager for telco and media with Sun. The company is positioning itself as a content management player over an Internet multimedia subsystem of IP (Internet Protocol) networks, said Darrell Jordan-Smith, a vice president for global telco industries for Sun.

"The whole market is changing," Jordan-Smith said. "The way you meet your customers is changing. How you get content to them is actually changing."

Sun has created a new business unit that combines media and entertainment, Internet and telecom, he said. That unit also works with network equipment manufacturers, system integrators and device manufacturers, all of whom are dealing with friction in the market, Jordan-Smith said.

"What we are seeing in the marketplace is a tension," Jordan-Smith said. "They all need each other, but they all kind of hate each other at the same time. Content aggregators are often saying to the device manufacturers 'Why are you stealing my stuff?'"

Additionally, content aggregators are sometimes at odds with carriers over who lays claim to customers, he said. From a technology perspective, however, Sun is working to create deployable content-management platforms that incorporate wireless, DSL (Digital Subscriber Line) and cable networks.

"We are looking to try and simplify the user experience, simplify the service-delivery platform," Jordan-Smith said.

IDG News Service

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