Published:
24-Nov-08
The IPTV technology market is continuing to consolidate with UK-based IPTV set-top box (STB) specialist Amino purchasing Swedish manufacturer Tilgin's IPTV STB business. The deal will cost Amino around €2.9m, paid for by its cash reserves, and is expected to be completed on December 1 2008. Traditionally, Amino has only produced STBs for pure-IPTV services where all content, including linear channels, is delivered via an IP connection. Recently, the company has announced its intent to move into the hybrid-IPTV space, where linear channels are delivered via more traditional broadcasts such a DTT or satellite with the on-demand aspects delivered via IP. The acquisition of Tilgin gives Amino access to hybrid-IPTV technologies, including deals with Greek IP-DTT operator On Telecoms. In addition, Tilgin will bring existing relationships with middleware vendors such as Ericsson and Nokia-Siemens, and experience designing STBs around STMicro chipsets.
Our take...
Tilgin has struggled to make a success out of its IPTV STB business making a net loss of €19m over the last 4 years of operation despite shipping 441,000 units and generating €84m in revenue over the same period. Around 300,000 of these units were standard definition PVR boxes shipped to Belgacom, for which Tilgin was the exclusive supplier. However, Tilgin lost this contract at the end of 2007 and has not shipped STBs to Belgacom in 2008. Shipments during the first half of 2008 fell by 93 per cent over the same period in 2007 to just over 4,000 units generating revenue of just under €1m and a substantial net loss of €3.5m, hence the relatively low valuation of the business at €2.9m.
In stark contrast 2008 has seen Amino post its best ever first half results, shipping 255,000 units and collecting revenues of €18.5m. The companies 4.2 per cent operating margin for the half of 2008 is in the same league as more established STB companies such as Pace. Amino's success has come from pure-IPTV only mainly basic standard definition MPEG-2 non-PVR STBs. Robust volumes have generated from building a large customer base rather than, like Tilgin, relying on a few key customers. Amino will look to build on its success by utilising Tilgin's hybrid-IPTV technology to expand its customer base rather than by any exploiting any specific customer relationships that Tilgin will bring with it. The most significant of which will be with UAE operator Du which accounted for around 40 per cent of Tilgins shipments in the first half of 2008.
Sweden,
UK,
