Microsoft Wants Closer Operator Ties

Microsoft wants to expand its relationships with telecommunications operators, part of a plan to win more consumer business by bundling software and other products with telecom services, according to a company executive.

“If you want to reach consumers in the largest possible way, it’s still the retail channel. But for us, it’s a great, extra channel for us to reach consumers with telcos,” said Michiel Verhoeven, general manager of Microsoft’s Communications Sector group in Asia-Pacific, Greater China and Japan.

One of the most visible components of Microsoft’s work with telecom operators is Windows Mobile, which powers a growing number of smartphones aimed at business users. But that is only part of the story. Major consumer offerings that Microsoft provides through operators include set-top boxes that run Windows XP Media Center and Windows Media Player licenses for device makers.

These offerings also include Microsoft TV, which lets operators add interactive services, like video-on-demand, to their cable television or IPTV services. Nine operators worldwide have so far signed agreements to offer IPTV services based on Microsoft TV, and several additional trials are under way with other operators, Verhoeven said.

The relationship between Microsoft and operators also extends to the Xbox 360 game console. In Singapore, Microsoft has an Xbox 360 distribution agreement with cable operator StarHub. Under that arrangement, StarHub bundles sales of the Xbox 360 with broadband Internet services.

“Xbox distribution with StarHub here in Singapore has been tremendously successful,” Verhoeven said. Microsoft hopes to strike similar deals with operators in other countries, he said.

To make this and other deals happen, Microsoft has a dedicated group that works with operators. The Communications Sector group acts as a single contact point for the Microsoft products that operators want to offer their customers as well as for the Microsoft products, such as Windows XP or Office, that the operator uses internally.

-Sumner Lemon, IDG News Service (Beijing Bureau)

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