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Telco TV Delay Causing Subs Downgrade

ABI Research examined the nascent market for Telco TV, and the equipment needed to support advanced video delivery services. At that time, operators were planning quite rapid project deployments, and subscriber number projections were high.

The 2006 assessment paints a somewhat less rosy picture. Many projects have suffered delays, and many companies have downgraded their initial estimates of customer numbers and launch dates.

Michael Arden, principal analyst of broadband and residential entertainment technologies says, "Some technical and scaling issues -- certainly outside North America -- have created delays. More broadly, at least within North America, franchising issues and regulatory and legal aspects have contributed most to the delays in a number of systems. A couple of large projects are now seriously behind schedule."

However Asia, with several successful high-subscriber networks already rolled out, will show growth closer to ABI Research's previous estimates. Europe, and then North America, will follow more slowly than previously thought.

Scaled-back projects offer less to subscribers, and Arden points out that "Verizon, for instance, will not initially offer true IPTV functionality. They have delayed that for now, and are putting out only an RF overlay as their initial video service. To subscribers that is effectively identical to what's offered by the cable companies. So there's little incentive to choose Telco TV services. That will impact subscriber penetration numbers."

However there are bright spots. "We're seeing strong interest in MPEG 4," reports Arden. "Trials are under way, and although no MPEG-4 chips for set-top boxes have arrived yet, they're on the cusp of commercial production. Once that happens, there can be a big jump to MPEG-4."

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