Forecasts from analyst firm Canalys indicate the IPTV market will see rapid growth over the next three years, driven by telecom operators' desire to boost ARPU (average revenue per user) and counter the growing threat from competing triple-play providers. Worldwide IPTV subscriber levels will increase more than tenfold by the end of the decade, growing from fewer than 4 million in 2006 to almost 40 million in 2010.
EMEA accounted for two-thirds of global IPTV subscribers at the end of 2006, and will remain the largest market through to 2010, when the region will account for 38 per cent of the worldwide total. “France is the European IPTV trailblazer, boasting 1.3 million subscribers at the end of 2006,” said Canalys vice president Alessandra Fitzpatrick. “Good, early uptake has been driven by a number of factors, notably low broadband prices, the prevalence of bundling low-cost IPTV service with broadband/telephony packages and limited competition from cable operators.”
But the favourable market conditions that have helped IPTV thrive in France are not evident in all markets. In most, high levels of competition from existing services will make it difficult for IPTV providers to compete unless they can differentiate their services, either by providing better quality of service or by maintaining lower subscription fees. “IPTV providers will have to compete on price in the short term. As a result, deploying TV services may not prove to be a significant revenue generation opportunity, although establishing a position in this emerging sector will be crucial for service providers seeking to protect their positions as prime providers of communication services,” Fitzpatrick added.