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Global Assessment of IPTV Deployments

According to a recent Current Analysis report, with the IPTV market still in its nascent stage, IPTV market projections reflect a notable variance of future market growth.

Over the next two years the EMEA region is expected to experience the most regional significant increase in IPTV subscriber expansion with Asia-Pacific close behind and North America delayed as AT&T and Verizon continue to selectively trial their pay-TV service offerings.

The regulatory environment within each country and region will influence the pace of IPTV deployments. For example, major telcos within the U.S. seek a national franchise licensing approach in order to avoid the traditional local franchise approach over the long-term, with the intent of accelerating IPTV deployments.

The exemption of fiber-based technology such as FTTH from local unbundling requirements has spurred Verizon’s FiOS video service offering efforts with the idea of transitioning from current RF-based video services to IPTV-based offerings.

In contrast, The EC ruled that Deutsche Telekom’s T-Com (fixed wireline) division must unbundled its VDSL2-based service offerings, which could dampen the pace of nationwide IPTV service deployments within Germany -- although that hasn't happened in other parts of Europe.

Telcos have spearheaded IPTV deployments thus far, as IPTV is viewed as an essential element in deploying defensive multi-play bundled services that include video in order to counter similar consumer offerings from rivals such as cable MSOs.

The leading telco IPTV business case typically anticipates elements such as lower price points in relation to equivalent rival video/broadcast packages, niche content offerings, MPEG-4-based HDTV, expanded channel offerings, even more flexible electronic programming guides, and wireless integration to justify the significant upfront CapEx in areas such as network upgrade costs and content acquisition costs as well as effectively counter cable and satellite offerings. Naturally each carrier and region will evolve their business cases based on their distinct competitive realities.

The early success stories of IPTV have closely correlated with the ability of the IPTV service provider to produce 'distinct and clearly differentiated' content. For example, Hong Kong’s PCCW created its own a la carte channel lineup, including a news center, while Italy’s FASTWEB secured content rights to select FIFA and Italian League football games.

In the U.S., rural telcos have seen local high school football games draw customer attention. As of June 2006, over 1,300 free IPTV channels were already available. However, factors such as regulatory, technical, marketing and content acquisition realities will ultimately determine the magnitude and success of IPTV content acquisition and differentiation efforts.

Regardless, it's interesting to note that some large incumbent telcos seem satisfied to ignore the proven pioneer lessons learned, and have intentionally launched undifferentiated services with a me-too selection of standard-definition programming combined with minimal HD content offerings.

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