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IPTV Needs A Full Offensive Strategy - 22.4 million IPTV subscribers expected in Asia-Pac by 2013
IPTV Needs A Full Offensive Strategy

 

PRZOOM - /newswire/ - Singapore, Singapore, 2008/10/08 - 22.4 million IPTV subscribers expected in Asia-Pac by 2013.

   
 
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Global IPTV deployments todate would suggest that a half-hearted approach to IPTV services has not been effective. Many service providers feel the urge to launch IPTV services as a defensive strategy to increase their “n-play” offerings with one more service.

Frost & Sullivan research analyst Adeel Najam believes that IPTV requires a full-throttle implementation to really take-off. “As the broadcasting and pay-TV industry is uncharted territory for most telecom players, telcos will need to penetrate the market with an offensive approach, complete with a content acquisition strategy, to successfully attract cable or satellite TV subscribers,” he says.

New analysis from Frost & Sullivan (communicationservices.frost.com), IPTV Business Case, reveals that the IPTV subscriber base in Asia-Pacific - covering 13 countries - reached 4.1 million in 2007 and estimates this to reach 22.4 million by end-2013, at a CAGR (compound annual growth rate) of 32.7 percent (2007-2013).

Of the 13 countries, eight had commercial IPTV services in 2007, while the rest are conducting trials for expected deployments from 2009 onwards.

If you are interested in a virtual brochure, which provides service providers, vendors/manufacturers, end users, and other industry participants with an overview of the Asia-Pacific IPTV services market, then send an email to Sarah Lourdes at sarah.lourdes[.]frost.com, with your full name, company name, title, telephone number, fax number, and email address. Upon receipt of the above information, an overview will be sent to you by email.

Asia-Pacific accounted for about a third of the global IPTV subscriber base last year. Apart from South Korea which does not have true IPTV service, the top two Asia-Pac countries by subscribers as at end-2007 are Hong Kong with 24.9 percent (1.02 million subscribers) of the region's IPTV subscriber base and China with 22.7 percent (0.93 million).

Hong Kong has the highest household IPTV penetration rate at 45.3 percent, and is the only market where IPTV dominates the pay-TV industry with a 46.7 percent subscriber market share in 2007 through its incumbent PCCW. Cable TV controls 41 percent of Hong Kong's 2.18 million pay-TV subscriber market, while satellite DTH (direct-to-home) services hold the remaining 12.3 percent.

With only a handful of successful IPTV roll-outs - PCCW, which launched its IPTV service in 2003, being one of the few in the world - and EBITDA (earnings before interest, tax, depreciation and amortisation) margins still in the red for most, if not all, IPTV service providers, critics argue that the business case for IPTV does not exist and payday is too long a wait.

Najam however believes that it is a case of unrealistic expectations “a long payback period is not unique to IPTV services, but is the case for all pay-TV services,” he says, adding that cumulative payback periods of over seven years is the norm rather than the anomaly due to the intensive capital expenditure required for infrastructure build up and content acquisition.

According to Najam, IPTV service is a must for operators with broadband speeds upwards of 10Mbps in order to fully optimise bandwidth capacity.

“Service providers with high-speed broadband transmission networks have the competitive advantage in deploying IPTV services as they can leverage their networks to offer bandwidth intensive services like high-definition TV (HDTV),” says Najam.

“The first line of attack for any fixed-network operator to realistically transform into multi-play service providers offering voice, data and video services is by converting its existing broadband subscribers,” he adds. “This will ensure lower subscriber churn rates and increase operator revenues and ARPU (average revenue per user) through service bundling.”

The competitive advantage of IPTV over cable and satellite TV services is the ability to provide viewers with a richer viewing experience through innovative and interactive value-added services such as network-based time-shift TV, personal video recording, video-on-demand, and even Internet-based services like online bookings, online network games and online banking.

Najam however points out that content is critical for IPTV to succeed as consumers understand only the 'TV' element of IPTV. ”Content exclusivity is a definite advantage, although not a pre-requisite,” he says.

“Acquiring broadcast rights to popular content such as live sporting events and premium broadcast channels requires huge investments which can take time to recoup,” adds Najam.

Over time, wider deployment of IPTV is expected to increase competition in the pay-TV industry and encourage the introduction of innovative value-added services and production of local content. “We expect this to eventually reduce the overall cost of multi-play services and boost uptake of IPTV,” Najam concludes. “In some cases we also expect governments and regulators to create a level playing field between various technology platforms in terms of content ownership which would give the industry a fillip.”

The IPTV Business Case study is part of the Communication Services Growth Partnership Service program, which also includes research in the following markets: WAN services, enterprise mobility, online content services, user-generated content (UGC), social networking, broadband access technology, telecom services, managed and hosted services, and network transformation case studies. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants. Analyst interviews are available to the press.

Frost & Sullivan, the Growth Partnership Company, partners with clients to accelerate their growth. The company's TEAM Research, Growth Consulting and Growth Team Membership empower clients to create a growth-focused culture that generates, evaluates and implements effective growth strategies. Frost & Sullivan employs over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 30 offices on six continents.

 
 
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IPTV Needs A Full Offensive Strategy

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