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UPC Taps Open TV For Direct-to-Home Launch

Making another mark in the intensely competitive interactive-television software market, OpenTV Corp. forged a deal to provide ITV software to United Pan-Europe Communications N.V.'s direct-to-home satellite-television venture in Eastern Europe, an area noted for less-than-perfect cable infrastructure.

Using OpenTV's "OpenStreamer" applications launcher, UPC plans to initially offer interactive-television applications such as electronic program guides, enhanced sports and games to Wizja TV subscribers in Poland. Rollouts in Hungary, Slovakia and the Czech Republic will follow next year, the companies said.

The deal was not surprising, as most of OpenTV's successes have occurred over British Sky Broadcasting Corp.'s satellite platform, noted The Carmel Group analyst Jim Stroud.

"OpenTV's reputation is on the satellite side," Stroud said.

This latest agreement expands on an existing relationship between UPC and OpenTV. Earlier this year, PrimaCom AG-a German cable operator with more than 1.35 million subscribers that is partly owned by UPC-selected OpenTV for an interactive-television rollout.

"We feel this latest announcement with UPC is an important deal for us," said OpenTV spokesman Michael Anderegg. "We're expecting that late this year or sometime next year, we'll be downloading our software to about 300,000 existing set-top boxes."

Anderegg said those software-deployment levels are expected to increase over the next 12 months as UPC expands its interactive, direct-to-home footprint.

The latest move also maintains UPC's practice of tapping multiple software vendors for advanced set-top box applications.

Following delays in Microsoft Corp.'s "Microsoft TV" ITV software, UPC last month tapped Liberate Technologies Inc. as a second-source supplier. It said it would offer the "Liberate TV Platform" on Motorola Broadband Communications Sector boxes in Vienna early next year, with "walled-garden" applications such as electronic mail, chat and electronic commerce.

The Vienna system, with about 480,000 subscribers, is one of UPC's largest.

UPC, the European cable arm of UnitedGlobalCom, still plans to add Microsoft TV functionality to Philips Consumer Electronics Co.-built advanced digital boxes in Amsterdam, Netherlands, via downloads, when that software is ready for mass deployment sometime in the first-quarter of 2001. Microsoft owns about 8 percent equity in UPC.

While the satellite-TV software deal opens the door for possible future OpenTV deployments, Anderegg said it would be premature to say which vendor would take a prominent set-top box software role with UPC.

"They're still in the process of evaluating which [ITV platform] is the best," he said.

While software vendors fight over deployments in Europe, it's still a fierce, albeit wide-open, game in the U.S.

Though OpenTV has yet to announce any deals with U.S. cable operators, the company is confident that eventual advanced set-top box deployments will spark some agreements.

"Liberate has made some visible announcements, but nobody has any significant deployments," Anderegg said. He referred to AT & T Broadband's recent decision to try Liberate's middleware in an undisclosed market, and BellSouth Corp.'s planned use of the Liberate platform for its forthcoming satellite-TV service, which could reach 50 million marketable homes if the telco opts to seek customers outside its Southeastern U.S. territory.

Still, OpenTV has made some domestic progress, most notably a relationship with EchoStar Communications Corp., which serves more than 4.3 million Dish Network satellite customers.

OpenTV is currently demonstrating its products to the cable industry, said OpenTV president and COO James Ackerman, noting that the company has already ported its platform to widely deployed 2000-class boxes.

"We have a large base of boxes to present to consumers to create new revenue for the content providers and services that we think will reduce churn or manage churn," Ackerman said. He also said giving customers access to applications and services over the TV such as e-mail and electronic-banking will make subscribers think twice before switching to a competitive broadband services provider.

OpenTV's recent absorption of SpyGlass Inc. will also bolster the company's domestic aspirations. With that acquisition, OpenTV gained access to "Mosaic," a Web-browsing application.

That deal was critical for OpenTV in the U.S., because the other major middleware providers, such as Liberate and Microsoft, have incorporated or have announced plans to incorporate Web browsing.

"That acquisition was more targeted to the U.S. market to step up and compete with the likes of Liberate and Microsoft and some of the other players like ICTV and WorldGate," Stroud said.

OpenTV's track record in the satellite television arena is also turning heads.

"It's hard to argue with 10 million set-top boxes deployed," Stroud said.