China’s IPTV industry looks beyond 2007

China's IPTV market this year is falling short of expectations, both in terms of subscriber growth and equipment shipments, according to iSuppli Corp. Subscribers on the mainland are expected to total only 846,000 by the end of 2007, compared to Chinese IPTV operators’ expectations of 1.3 million. The overall pace and scale of IPTV deployments have been disappointing this year.

Four operators now have IPTV licenses in China: Shanghai Media Group (SMG), China Central Television International (CCTV), Nanfang Broadcast Media (NBM), and China Radio International (CRI). SMG was the original IPTV pioneer in China and is the only operator actively pursuing IPTV deployments.

As the first IPTV licensee, SMG partnered with China Telecom (CTC) and China Netcom (CNC) to introduce IPTV services in Shanghai and Harbin respectively in 2006. The final outcome of these deployments has been widely regarded as a key barometer of the industry's prospects.

SMG had planned to expand IPTV to multiple cities in 2007. The State Administration of Radio, Film, and Television (SARFT) approved SMG's launch of IPTV services in 10 cities: Fuzhou and Quanzhou in Fujian Province, Taizhou in Zhejiang Province, Xian in Shannxi Province, Hanzhong in Hubei Province, Shenyang, Dalian and Panjing in Liaoning Province and Mudanjiang and Heihe in Heilongjiang Province. However, local operators experienced difficulties promoting IPTV services. Fujian and Zhejiang Provinces enrolled about 100,000 and 30,000 subscribers respectively, but the other locations did not come close to meeting their assigned targets.

Meanwhile, the other three IPTV licensees chose to pursue a cautious wait-and-see strategy. CCTV has announced plans for IPTV field tests in Baotou in Inner Mongolia, in Changchun in Jilin Province, and in Nanjing in Jiangsu Province.

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