There are industry reports of a potential alliance that could result in Alcatel reselling the Microsoft TV system.

Both companies have been competitors in the emerging market for internet protocol television that allows operators to deliver television and video over broadband data networks.

Alcatel is an integration partner with Microsoft at SBC, which recently announced a major IPTV contract with Microsoft as part of its next-generation network.

There is speculation that Alcatel, a major telecommunications equipment company, could end up reselling the Microsoft software solution, potentially creating a significant competitor to other IPTV middleware providers.

Neither company has commented on the news.