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IPTV Operators Adopt OTT for Differentiation

According to the latest market study by MRG, 2008 IPTV subscribers reached 1 million over its last forecast in late 2008, or 21.3 million, resulting in projected subscriber growth of 26.9 million in 2009 to over 81 million in 2013.

Systems vendor combined CapEx revenue plus service revenue will grow from $9.7 billion in 2009 to $25.6 billion in 2013.

Their new IPTV forecast for 2009-2013 is based on very detailed semi-annual analysis that MRG does on individual Service Providers and on a country-by-country basis -- including six IPTV CapEx products broken into 4 regions.

"The relatively strong market in 2008 caused CapEx transactions to flourish through the end of 2008," says Jose Alvear, MRG Analyst.

That anticipatory wave of orders kept vendor pipelines full all the way through 2008, but in Q1/2009, many IPTV vendors reported single-digit reduction in revenues, which is reflected in our flattened 2009 forecast.

One indicator that new subscriptions will remain strong is the Q1/2009 IPTV subscriber growth of 583,000 combined for U.S. Verizon and AT&T compared with 114k new subs added by the two largest U.S. Cable Operators, Comcast and Time Warner for the same period.

Also a signal of new growth is the number of new IPTV Operators in Eastern Europe and the Rest-of-World (ROW) region. The number of Service Providers in the ROW category went up from 64 companies to 84.

Countries like Colombia, Qatar, United Arab Emirates, Montenegro and the Russian federation have seen new growth in their operations, and, the ROW region will be among the fastest-growing market from 2009 to 2013 with a 29 percent CAGR.

As the IPTV market matures, many innovations are emerging, including Service Providers turning to Over-the-Top (OTT) Video applications to supplement their video-on-demand offerings.

Technical upgrades also contribute to growth, including DVRs, High-definition programming, MPEG-4/H.264, and first class system integration. Professional services growth is brought on by stronger regional partnerships of vendors and resellers that continue to move into smaller markets.

Growth in System Integration and Professional Services will also be spurred by the growth of turnkey system sales where all the components are heavily pre-integrated.

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