NDS, the provider of conditional access and interactive television middleware, has reported first quarter revenues of £86.1m, compared to £52m for the same period the previous year, with an operating income of £18.6m.

The company reports that there are now 47.8 million active digital television smart cards using NDS technology, up 8.6% on the previous year, and MediaHighway middleware is installed in a total of over twenty million set-top boxes worldwide.

Announcing first quarter results, president and chief executive Dr Abe Peled said that the company has also made significant steps to penetrate the nascent market for IPTV or internet protocol television, developing a new hardware solution for content protection known as VGS. This uses a processor in the set-top box to communicate with a remote authentication server, eliminating the need for a smart card.

In addition, NDS has formed an alliance with STMicroelectronics and Thomson, intended to create an open specification for secure content protection in digital home networks and consumer electronic devices. The content protection system, known as SVP or Secure Video Processor, relies on hardware embedded in compatible products. NDS says customers such as DIRECTV in the US plan to extend their reach by using the technology to allow consumers to receive, store and distribute content securely across home networks and other electronic devices.

The News Corporation controlled company reported quarterly revenues of £58m for its conditional access smart cards, with fees for integration, development and support at £9.3m. Royalties from set-top box manufacturers for MediaHighway middleware, conditional access and applications contributed £8.8m, up from £4.3m in the same quarter the previous year. In addition, the company separately reports revenues from new technologies of £9.3m, up from £6.9 million, reflecting increased penetration of MediaHighway advanced middleware and personal video recorder technology.