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China's IPTV Market Forecast at 14.5 Million

According to the IDC report entitled "China IPTV 2007–2011 Forecast and Analysis", there was relatively rational and stable development last year in China's IPTV market, which saw more content providers and operators obtaining a business license with greater industry cooperation.

As a result, the number of subscribers in the Chinese IPTV market reached 450,000 by the end of 2006. Elain Yi, Market Analyst at IDC's China Telecom Research, characterized the growing China IPTV market as follows:

Due to increasingly relaxed policies, proliferation of new business models, improving technology standards, increased network loading capacity, greater user awareness, and increased cooperation within the industry, IDC believes that China has the greatest potential to become the largest IPTV market in the Asia-Pacific (excluding Japan) region and commercial use in-scale will take place in 2007.

Digital TV developed rapidly in 2006, and achieved critical mass. IDC therefore predicted that a sharp growth in China's IPTV was unlikely in 2007 and forecast the market to reach 1.25 million subscribers.

Despite government policies favorable to the development of the IPTV market, there are still strict control over IPTV content and, in the near future, telecom operators are unlikely to obtain operating licenses independently. As a result, telecom operators will have to cooperate with content providers and operators who have obtained IPTV licenses.

Telecom operators saw IPTV as transformation service and had high expectation that IPTV will increase revenue and profits of traditional fixed-line networks. However, due to the shortage in the supply of content and operating license, telecom operators prefer to provide more telecommunications services (including voice and video communication) and data application instead of program transmission via IPTV, which contributes to real triple-play of IPTV.

China's SARFT (The State Administration of Radio Film and Television) has adopted a cautious approach towards the development of IPTV as a new medium. Several issues are being considered, for example, the relationship between digital TV promotion and IPTV development, the interests of local radio and TV sectors, the policy influence of the State Administration of Radio, Film and Television, and the development strategy of Cable TV (CATV) and content suppliers.

"The development of the IPTV market in China is more complicated and uncertain than any other service in the telecom space. However, after experimenting with technology and trying with various business models over years, IDC expects China's IPTV market to be more commercially rational as development stabilizes in 2007. We forecast that China IPTV subscriber will exceed 10 million in 2010, and will reach 14.5 million by 2011," says Elain Yi.

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