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IPTV revenues to touch $512 million in 2007: Frost & Sullivan

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MUMBAI: Dwindling wireline revenues, consumer demand for greater control over viewing preferences, and the explosion of broadband in various high growth markets across Asia-Pacific represent the impetus for the development of IPTV in the region.

While service providers across Asia-Pacific have invested heavily in the network infrastructure required to offer such services, the key success factor for IPTV lies in the gamut of content that service providers are able to provide consumers.

New analysis from global growth consulting company, Frost & Sullivan Asia Pacific IPTV Market, reveals that revenues in this market - covering 12 major Asia-Pacific countries ex-Japan - is estimated to increase from $353.4 million in 2006 to $512.4 million next year. Growing at a compound annual growth rate of 37.5 per cent (2006-2013), the region's IPTV market is forecasted to be worth $3.3 billion by end-2013.

Frost & Sullivan senior research analyst Aravind Venkatesh says, "IPTV is the next notable wave in the consumer telecom space and service providers are planning to leverage this new technology to offer high quality interactive services to customers. While revenues from fixed-line services continue to decline, IPTV is likely to reduce churn, increase ARPU (average revenue per user) levels, and generate revenue streams in the long term."

IPTV is presently available in China, Hong Kong, Malaysia, Singapore, South Korea, Taiwan and Thailand, and is expected to be introduced in India and the Philippines in 2007. Countries like China, India and Australia are expected to be high growth markets by 2009.

China, in particular, holds immense potential as it has the largest broadband subscriber base in Asia-Pacific. Residential subscribers constitute approximately 70 per cent of China's 47.8 million broadband subscriber base. China together with Hong Kong, which is said to be one of the most sophisticated IPTV markets in the world, is expected to account for nearly 60 percent of the region's IPTV revenues by end-2013.

While initial response from end users has been positive, service providers face the challenge of procuring quality and regional content, most of which is exclusively offered by cable and satellite operators. The lack of quality content is a common problem for service providers across the region. Although partnerships with content providers and broadcasting companies aid in securing access rights, cable TV providers or IPTV market leaders already have exclusive access to the content.

Venkatesh adds, "The lack of sufficient bandwidth and highly skewed broadband distribution are major inhibitors for the growth of IPTV in Asia-Pacific. While Hong Kong, Korea, Singapore and Japan are mature markets for broadband, developing markets like China, India and Malaysia have dismally low broadband penetration."

The lack of bandwidth in developing markets requires the implementation of high compression codecs and watermarking technologies to achieve the expected quality of service (QoS) levels. This may however be only a short-term solution. Service providers should scale their networks rapidly to offer bandwidth-hungry applications to consumers.

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