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EL SEGUNDO – Communications infrastructure equipment OEMs are engaging in a spate of mergers and acquisitions to become one-stop shops that can sell everything needed for telcos to compete in IPTV, according to iSuppli Corp.
 
At stake is a market for IPTV equipment that is expected to grow to $22.1 billion in 2011, up from $9 billion in 2007, the company says.

Leading the OEM M&A frenzy is Ericsson with its purchase of Marconi in 2005, Redback Networks Inc. and Entrisphere Inc. in 2006, and its current pursuit of Tandberg TV. The company is positioning itself to be a complete IPTV supplier, iSuppli says.
 
Also, Motorola Inc. has purchased Netopia Inc., Tut Systems Inc. and Vertasent LCC—a developer of Video-on-Demand and IPTV software—and has forged a strategic alliance with ECI Telecom Ltd. Cisco Systems Inc. has followed the same path with its purchase of Scientific- Atlanta, Linksys and Arroyo Video Solutions, a maker of video-networking software, continues the research firm.
 
Meanwhile, Nortel Networks Ltd. entered into an agreement to jointly develop middleware for the IPTV market with pay-TV software specialist NDS Ltd. During the same period, the merger that resulted in Alcatel-Lucent is a leader in the IPTV equipment space. Finally, Siemens and Nokia merged, creating another potentially powerful competitor, according to iSuppli.
 
iSuppli expects the M&A activity to sustain its fast pace in 2007. The focus of M&A activity in 2007 will be on middleware, VOD and possibly video encoding, the company predicts.

 
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