Netgem, ZTE migrate fiber partnership from LatAm to Europe

French video software developer Netgem is one of the most peculiar vendors regularly covered by Faultline Online Reporter and keeping track of its latest movements can often prove tricky. Netgem’s most recent venture, as revealed this week, involves taking the European fiber broadband market by the horns – inking a deal with Chinese telco equipment giant ZTE.

We say strange in the nicest possible way, as Netgem has adapted quite admirably to a rapidly changing market where competitors around it have imploded, while Netgem continues to soldier on. As a quick example from its peculiar backstory, Netgem bought VoD service Videofutur in 2007, via a French DVD rental company called Glowria, but then a couple of years later Netgem floated parts of the company off, describing it at the time as an enterprise video play. Another four years later and Netgem essentially rebought Glowria all over again when it acquired the remainder of Videofutur in 2013. Fast forward to 2019 and rumors of Netgem selling off Videofutur for a second time have been loosely rumored. But considering the Netgem of today is much more focused on selling fiber services than video content, it makes perfect sense, as does this week’s deal with ZTE.

Hold that thought though, as video might not be an entirely forgotten fruit. Netgem says it will bring its software assets and relationships with content publishers to the collaboration, through its experience in integrating local systems for pay TV providers in Europe. ZTE hardly needs any introduction yet the specific products the Chinese company will contribute to the project have been omitted from the release, stating only that ZTE will provide its device portfolio and innovation roadmap, along with its cost-effective production capabilities and long-term financing facility, whatever that means.

We have touched base with ZTE to see if anyone is willing to shine some light on any specific products/technologies/services being brought to the table. It could span anything from switches and routers, optical transmission techniques and IP Transport Platforms, to Broadband Access products like passive optical network platforms, along with SDN (software-defined networking) and NFV (network function virtualization), and of course the CPE covering both broadband access and home networking. Netgem could tell us nothing more than, “Our collaboration with ZTE is not limited to fiber and can cover additional features and devices. The focus is home, and addresses needs in TV, video, music and smart home.”

In the meantime, essentially what we have here is ZTE providing the network infrastructure to the home, or perhaps to the basement or cabinet (we have enquired which), as well as the set top and/or gateway, while Netgem will supply its middleware to operators – likely small tier 2 or 3 contracts – along with much of the TV clout through its content connections. All in all, spinning up an appealing fiber plus IPTV bundle. We see the tie up with ZTE as an attempt to revitalize a stagnant IPTV market, as Netgem itself has admitted that operators are cautious about investing in IPTV, a trend which has hit the vendor’s financials.

For some reason though, the names ZTE and Netgem side by side made us feel uneasy and we soon recalled that ZTE has a track record of failing to deliver reliability anywhere outside of Asia Pacific.

That tarnished reputation may, however, have been rectified with Netgem’s assistance over at Mexican ISP TotalPlay, which shifted to ZTE hardware from May 2017 as part of its FTTH IPTV expansion plans, bringing in Netgem for set top middleware on ZTE set tops. The significance of this deal was that it marked the first time Netgem has licensed its middleware to a third party set top supplier and although this week’s announcement is decidedly vague, we expect a similar deployment set up in Europe to the one tested over in Mexico.

Beyond France, ZTE is a member of the Italian Ober Fiber initiative, supporting R&D activity as part of the extensive FTTH project aiming to reach 9.5 million homes in Italy.

Perhaps then the deal is a match made in heaven, with ZTE supplying its optical fiber network infrastructure portfolio, while Netgem sticks to its guns in software while maintaining its content roots. This may pave the way for a more straightforward future for Netgem than the convoluted back story we outlined earlier, although working with Chinese companies is anything but easy going by the tales told at various industry events.

“We have consolidated a long-term alliance with Netgem, whose software platform and content expertise on the European market will help ZTE address the ultra-broadband market” said Fang Hui, VP and GM of Fixed-Network and Multimedia Products at ZTE.