Telstra this week dropped out of a Microsoft early adopter program for its end-to-end IP (Internet Protocol) TV software platform.

The carrier cancelled a deal to use Microsoft TV IPTV Edition for the deployment of its IPTV services, and is mulling using software other than Microsoft TV IPTV Edition for its IPTV plans.

Telstra could not be reached for comment Wednesday. However, Ed Gracyzk, director of marketing for the Microsoft TV division at Microsoft, said Telstra's pullout from the program does not preclude the carrier from working with Microsoft in the future to provide IPTV services.

"[Telstra] made it clear it had nothing to do with us or how they felt with the technology; it has everything to do with their readiness [to deploy it]," Gracyzk said. "I can't say they will [use our platform], but I will say that it's our business to lose, and when Telstra is ready to roll out IPTV we'll be ready to be there right with them."

By leveraging IPTV software platforms such as Microsoft's, carriers hope to roll out a range of advanced TV services, such as video-on-demand, HDTV and remote DVD recording.

Microsoft currently has two signed commercial software licensing agreements with two U.S. carriers, SBC Communications and Verizon Communications, to provide IPTV services using Microsoft's platform. Other companies in the early adopter program but which do not have commercial agreements with Microsoft include BellSouth, BellCanada and Deutsche Telekom.

Telstra is not the first company to hit a speed bump in its plans to deploy IPTV using Microsoft's platform. Swisscom, another Microsoft TV IPTV Edition early adopter, in May delayed the full commercial launch of its IPTV service from the second half of 2005 to sometime next year. The carrier cited problems with finding suitable set-top boxes for the service, as well as technical difficulties with Microsoft software, for the delay. Set-top boxes for Microsoft's IPTV platform are provided by several vendors, including Thomson.

Prior to the delay, Swisscom had completed Microsoft's early-adopter program and tested Microsoft's IPTV platform with 600 Swiss households in anticipation of the mid-2005 launch of the service, called Bluewin TV.

Gracyzk said early adopters have not had problems using Microsoft's IPTV platform that the vendor "can control" because there are myriad technologies involved in the deployment of IPTV carrier services. "Think of IPTV as this complex puzzle, and it's different from operator to operator," he said.

Microsoft is still on target to deliver the first version of Microsoft TV IPTV Edition in the fall, Gracyzk added.