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European Telco Has Greater IPTV Challenge

European telecom operators need to develop strategies that are tailored to their local markets if IPTV is to be a revenue earner rather than simply a product differentiator, according to UK research firm Analysys. IPTV services offer significant potential for operators to offset the impact of declining voice revenues and falling broadband prices, but the European market is more disparate and complex than that of the US, where much of the noise about IPTV services started.

"There are profound national differences in pay-TV and multi-channel adoption, in broadband take-up and digitalization and in the range of competing platforms," said report author Windsor Holden. "It is therefore essential for operators to develop local strategies that reflect these conditions if they are to acquire a critical mass of subscribers."

While IPTV faces competition from pay-TV platforms and from free-to-air digital terrestrial television offerings, Analysys says that there will be opportunities for telcos to exploit even in markets where pay-TV adoption is near saturation.

"In many markets, high pay-TV penetration is primarily dependent upon analogue cable networks and widespread adoption of digital TV has been deterred by a high price differential between analogue and digital services," said Holden. "This leaves a gap in the market for any operator wishing to offer a high-end pay-TV service including video-on-demand and pay-per-view."

The report does suggest, however, that in some instances partnership with an existing TV platform operator may be more fruitful than competition.

"If a would-be IPTV provider is faced with an environment in which both premium and basic multi-channel TV platforms are well established, then clearly it makes sense to consider partnership," Holden added.

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