IPTV growth strong, but ARPU challenges

Although growth of IPTV subscriptions in Europe are expected to grow five-fold by 2011 – to more than 25 million – a new study from Parks Associates finds that operators are ARPU-challenged and facing strong competition.

“IPTV in Europe: Digital TV in a Hyper-competitive Market” – A study finds that telcos are facing growing competition from not only cable, satellite and digital terrestrial services, but also other national incumbents and competitive players that are taking advantage of local loop unbundling regulations.

“Europe is certainly a laboratory in real market time of how competition among service providers is constantly forcing operators to constantly evaluate their entire broadband and bundled services strategies,” said Kurt Scherf, Parks Associates’ vice president and principal analyst. “Given the need to differentiate their services and add real value back to their companies, the European IPTV landscape is characterized by a careful balance between competitive pricing and value-added features.”

Scherf said that Europe provides an example of what North America may experience given the entry of major telcos into the multichannel video space. He points to such applications as managed home networks, an emphasis on converged communications applications, and a rise in interactive television as three key areas of interest to watch in not only Europe but the rest of the world.

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