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European Telcos as Entertainment Providers

Telecom operators across Western Europe are launching IPTV services in an effort to increase revenues and improve customer satisfaction for their broadband services. In a new study on IPTV services in Western Europe, IDC has found that the potential for success with IPTV services varies widely from country to country, depending on the penetration of existing pay TV services, the level of broadband competition, and the commitment of incumbent and leading competitive operators to investing in the network upgrades and content necessary for high-quality IPTV services.

IDC estimates that the market for IPTV services in Western Europe was worth $62 million in 2004, with less than 1 percent of households subscribing to IPTV services. The market will boom over the next five years, growing from $262 million in 2005 to $2.5 billion in 2009. By that year, 6 percent of Western European households will subscribe to IPTV services. By 2009, IDC expects that all European incumbents and a large portion of the major alternative tier 2 providers will offer IPTV services. DSL will be the most widely used platform for the service, though a minority of households in a few countries will receive IPTV services over metro Ethernet connections.

"By the end of the forecast period, France, Italy, and Spain will be the largest IPTV markets in Europe, accounting for over 60 percent of the total market," said Jill Finger Gibson, research director, European Telecommunications Services. "Operators in these countries were among the first to launch IPTV services and have demonstrated that they understand the technical requirements and strategic partnerships necessary to launch successful IPTV portfolios." Other countries expected to experience strong growth in IPTV services over the next five years are the Benelux and Nordic countries.

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