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A Long Road Ahead for Telco IPTV Growth

The latest analysis from Point Topic shows that IPTV subscriber numbers doubled during the 12 months ending 30 June 2006. The total number of customers worldwide paying for TV services supplied via Internet Protocol (IP) increased from just under 1.5 million to almost 3 million.

Point Topic believes that Europe is the most important region for IPTV, with the strongest growth in subscriber numbers during the period. There have also been a large number of service launches. This growth reflects the developed and competitive pay-TV market in many European countries.

Hong Kong's PCCW still remains the largest IPTV operator, with 444,000 paying IPTV subscribers, and a total of 654,000 TV connections (not all TV services require a paying subscription). France Telecom had over 300,000 paying customers, while Telefonica in Spain grew strongly to 267,000 TV subscribers.

Point-Topic's research shows that the picture of IPTV development worldwide remains a complex one. The success of an operator in executing an IPTV strategy depends on many things. The most important are:

- the local competitive environment, in the form of cable and direct-to-home (DTH) satellite operators.

- the local regulatory environment. In some cases, the regulator will not permit telcos to enter the TV market, in other cases telcos are allowed to carry TV over fiber but not copper, and in other cases there are no restrictions.

- the type and condition of the network. Operators with a largely fiber network, such as FastWeb (Europe) and PCCW (Asia-Pacific), were able to deploy IPTV service early. Operators with unsuitable copper networks, especially laggard telcos in the U.S., are building fiber to enable services such as IPTV.

In hindsight, we know that the early predictions for IPTV service growth were overly optimistic projections. Now that the reality is apparent, all informed observers will temper their forward-looking expectations for the long and winding road to 'relatively significant' market penetration.

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