The Media Distribution Caching Service, available only in Europe, allows customers to use Deutsche Telekom's IP (Internet protocol) network to store and deliver video and audio content. Company spokesman Hans Ehnert said Monday that Deutsche Telekom used IBM servers to build a system large enough to cope with the bandwidth-hungry process of sending media files to homes and offices.
The German telephone and wireless giant is selling network time to Internet service providers and other Web companies that want to supplement their consumer and corporate services with on-demand video.
So far, there's only been one customer: Deutsche Telekom's subsidiary T-Online, which sells high-speed Internet access in Germany. But others are expected, Ehnert said.
With the launch, Deutsche Telekom--which offers landline and wireless phone plans as well as broadband services--becomes one of the first telephone companies to move into large-scale video delivery. A handful of cable companies have already completed the threesome, using their pipelines to deliver high-speed Net access, telephone connections and cable television and movies on demand.
Analysts say telephone companies have to answer with a similar threesome of services to fend off the cable industry's growing competitive threat.
Some major telephone companies have announced they are, but IBM Vice President Mike Maas said Deutsche Telekom may be the first telephone company to actually do so.
Others that look likely to follow are European carrier Orange and FarEasTone, both of which use some of the same as Deutsche Telekom.
"There is no question we are on the verge of a fairly significant change in terms of how consumers and business access information," Maas said.