IPTV subscriptions set to take off

12 November 2007

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Reading, England - By the end of 2010, there will be 39.6 million subscribers to Internet Protocol Television (IPTV) worldwide, up from fewer than 4 million in 2006, according to analyst firm Canalys.
Canalys forecasts IPTV subscribers in the Asia Pacific will exceed 11 million by the end of the decade but notes the region’s huge potential will be restricted by regulatory issues, and infrastructure investment is needed to boost developing markets.
“The IPTV markets in China, Japan and South Korea are heavily constrained at present, although the 2008 Beijing Olympics may prompt Chinese authorities to accelerate plans,” says Canalys Vice President Alessandra Fitzpatrick.
Europe, the Middle East and Africa accounted for two-thirds of global IPTV subscribers at the end of 2006 and will remain the largest market through 2010, when the region will account for 38% of the worldwide total.
North American IPTV subscriptions are projected to reach 12.1 million by the end of 2010, accounting for 31% of the global total, up from 9% in 2006.
The IPTV market will be driven by low broadband prices and telecom operators’ desire to boost ARPU (average revenue per user) and counter the growing threat from competing triple-play providers—but rapid growth won’t translate to profits for everyone.
“IPTV will be a financial loss leader for many providers over the next five years when the costs involved with rolling out and evolving services are factored in, but if telecom operators are to retain their position as primary providers of consumer communication services, this may be a price they need to pay," said Fitzpatrick.
“It is difficult to see how the majority of IPTV providers will be able to generate significant profit from services in the near term, especially when the need to be price competitive is considered.”