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Video services

Will IPTV Bloom in 2006?

After discussions with 12 large broadband providers, Infonetics Research Inc. believes that IPTV infrastructure spending will zoom to almost a billion in 2006, then double by the end of 2007 and reach $4.5 billion in 2009. (See IPTV Revenues to 'Skyrocket'.)

Carriers around the world are looking to IPTV services to push up average revenue per user (ARPU) from a “near-saturated broadband subscriber base,” Infonetics says.

Capital spending on IPTV will be used by operators to buy network hardware like IP DSLAMs, broadband edge routers, and aggregation switches, as well as application-oriented equipment like video on demand (VOD) servers, encoders, and other headend equipment, Infonetics says.

"But the biggest decision they face right now is who to choose as a middleware partner," says lead analyst Richard Webb in a statement. (See Latens, Minerva Integrate , Myrio's Quiet Quandary, Microsoft Wins at BT, and Orca Demos IPTV Software.)

Infonetics believes operators' IPTV capex investments during the next few years will pay off in spades. The firm predicts IPTV subscribers will top 53.7 million worldwide by the end of 2009, generating $44 billion in revenue for operators that year.

Infonetics based its forecasting on discussions with 12 service providers (including RBOCs, MSOs, and other broadband providers) regarding their IPTV strategies, timeframes, service bundling, and expected subscriber and revenue targets.

IPTV deployments with real paying customers exist mainly in Asia and in a handful of North American IOCs. "PCCW in Hong Kong and FastWeb in Italy, and independent operators in North America like SureWest are already experiencing significant IPTV subscriber growth," says contributing Infonetics analyst Jeff Heynen. (See Citizens Bolsters Its IPTV and Rural Carrier Makes IPO Hay.)

Heavy Reading analyst Rick Thompson agrees the IOCs are the first movers in the U.S., and he attributes that, in part, to simple issues of scale. “IOCs don’t face the daunting subscriber scaling problems that RBOCs will encounter as they roll out IPTV services,” Thompson says. “Many IOC networks are being built to serve tens of thousands, versus hundreds of thousands of video subscribers.”

Infonetics' Heynen is bullish on the U.S. RBOCs' hopes of winning over those hundreds of thousands of subscribers from cable companies and other existing video providers. "We expect SBC, Verizon, BT, and other large providers to successfully conquer the technical and marketing hurdles before them, and when they do, their IPTV subscriber figures will increase substantially year-over-year," he says. (See SBC Stretches Lightspeed Timeline and Scaling IPTV: Progress at SBC .)

Meanwhile, as the Infonetics analysts point out, the cable MSOs will move steadily toward an all-IP video offering in the next few years, which they will no doubt match whatever IP-based advantages the telcos have in the short term. (See Cable Firms, Sprint in Fixed/Mobile Deal.)

— Mark Sullivan, Reporter, Light Reading

zher 12/5/2012 | 2:53:51 AM
re: Will IPTV Bloom in 2006? Since almost everything will be based on IP, VoIP, IPTV, HSI..., it should be very possible that the subscribers would by the boundle services.

what should be the reasonable monthly rate?
PO 12/5/2012 | 2:53:49 AM
re: Will IPTV Bloom in 2006? My question is this: once the incumbents are delivering all these new serivces over (I assume) DSL, what services are they delivering over baseband?

That is, how many customers within a bundle do they fail to cut over from traditional services? Or do they really get to abandon their legacy services and interference problems (ha ha) in favour of new revenue streams?
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