IPTV to face tough climate: research firms

MUMBAI: This is a piece of news that should put a word of caution on telecom firms like Reliance Infocomm and Bharti who are keen on IPTV. While the telcos are keen on leveraging the new media platform to augment revenues, two research reports indicate that they face severe challenges ahead.

One report from research firm Gartner says IPTV services will struggle for years against the established pay-TV and free-to-air (FTA) platforms. Subscribers for television services over the internet, which hit 1.7 million last year, is expected to grow at a 58.8 percent aggregate rate until 2010, when the service is expected to attract 16.7 million subscribers.

But despite this robust growth prediction, Gartner says IPTV will struggle over the next five years to become a mainstream revenue opportunity for carriers.

The other report from Multimedia Research Group (MRG) states that uncertainties in large carriers in the US and Asia holds the forecasts for these regions down. Europe should be the strongest IPTV market through 2009, with Asia catching up by the end of the forecast period. IP TV set-top boxes will dominate the capital spending for IPTV services and account for two-thirds of spending.

Europe is surging ahead with a large number of strong IPTV deployments that include France Telecom, Free, Neuf in France, Telefonica in Spain, FastWeb in Italy, and a number of strong competitive offerings in Scandinavia.

Gartner meanwhile notes that while the short- to medium-term profits from IPTV will be modest at best, carriers cannot afford to delay the deployment of the IPTV platform. Those who delay too long will risk undermining their ability to be long-term key players in the consumer 'infotainment' communications business.

There will be 3.3 million subscribers to IPTV services in Western Europe by the end of this year and 16.7 million within four years, according to the report.

The UK currently has one of the smallest numbers of IPTV subscribers in Western Europe with only 75,000 subscribers predicted in 2006.

Although this is set to increase fairly rapidly to reach 1.9 million by 2010 with the introduction of services such as BT Vision Gartner predicts that the UK will remain a weaker prospect for IPTV. This is mainly due to the existing pay TV landscape and dominance of Sky TV.

In contrast Gartner predicts that by the end of 2006, almost half of Western Europe's IPTV subscribers will be based in France - a total of 1.7 million generating revenues of €141m.

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