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IPTV is Potentially More Than Just Hype

According to a new Infonetics Research report, equipment sales, service revenue, subscribers, and service provider capex all increased dramatically between 2004 and 2005, and are expected to explode by 2009.

With worldwide IPTV subscribers swelling to 53 million by 2009, service providers are investing rapidly increasing amounts on IPTV content and transport equipment. In 2009, $26 billion of worldwide service provider capex will be spent on IPTV infrastructure.

Meanwhile, worldwide IPTV equipment revenue will surge to $6 billion, and service revenue will jump to $38 billion. Broadband service providers with DSL and FTTH services account for the bulk of IPTV service revenue now, but cable broadband providers will also migrate to all-IP triple-play services in the next few years, and offer wireless services as well.

"Service providers expect huge returns from IPTV, and they are investing heavily in IPTV infrastructure to ensure those returns," said Jeff Heynen, directing analyst for IPTV at Infonetics Research. "Right now they're focused on transport infrastructure, upgrading their access networks with higher-bandwidth ADSL2+, VDSL2, and FTTH platforms, and adding IP edge routers and Ethernet routers and switches to handle the expected traffic demands of the escalating numbers of IPTV subscribers. Over the next four years, though, their investments will shift a bit to content infrastructure, so they'll spend more on things like video on demand servers, encoders, content security platforms, and headend equipment."

2005 Highlights:

- Worldwide IPTV equipment revenue topped $400 million.
- EMEA is the leading region for IPTV service revenue, accounting for 48 percent of the worldwide total.
- IP set top box (STB) revenue represents 42 percent of all IPTV equipment revenue, as service providers began volume purchases of MPEG-2 enabled STBs for the presentation of IPTV content.
- IP STB sales will nearly double every year for the next 3 years.
- The number of IPTV subscribers in Asia Pacific almost doubled between 2004 and 2005, where faster forms of DSL like VDSL2 and ADSL2/2+ are stimulating subscriber growth.
- The number of IPTV subscribers in North America will increase more than 40-fold between 2005 and 2009.

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