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$1B MMDS Deal Signed By Thomson


Branching out into a digital video area it sees as being even bigger than direct-to-home satellite, Thomson signed a three-year $1 billion agreement to deliver set-top boxes for a wireless microwave cable TV system being launched by a group of phone companies under the Tele-Tv Systems banner.


Tele-Tv Systems is a Multichannel Multipoint Distribution System (MMDS) joint venture between Bell Atlantic, NYNEX and Pacific Telesis to deliver [text]set-top boxes for a wireless microwave cable TV system being launched by a group of phone companies under the Tele-Tv Systems banner.


Tele-Tv Systems is a Multichannel Multipoint Distribution System (MMDS) joint venture between Bell Atlantic, NYNEX and Pacific Telesis to deliver wireless video service to a contracted initial audience of 3 million homes and apartments.


The home receiver being developed by Thomson will have a factory cost of less than $400 and "is one of the most technically advanced units ever built," said Jim Meyer, Thomson's product management senior VP.

Thomson plans to invest $40-$50 million in its product development and manufacturing capability to complete the project -- including a $15 million expansion of the Juarez plant that recently had its production capacity for Digital Satellite System (DSS) receivers increased to 2 million units a year.


During a telephone news conference, Meyer acknowledged that the receivers will not be sold at retail. But, he added, "the best way to distribute these boxes may be in multibrand TVs, led by RCA." He predicted retail will make the system a mass market product, "and by that I mean literally 50-100 million homes." Thomson has estimated the market potential for DTH satellite at about 20 million homes. Meyer noted that Thomson "will continue to be leading the market of DSS systems."

Tele-Tv Systems president Ed Grebow pointed out that unlike DSS, Tele-Tv will offer all local independent and network programming along with basic and premium cable services, "and that's how we are going to differentiate ourselves."
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