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IPTV Upside to Drive the UK Pay-TV Market

Pay-television revenue in the U.K. will climb from $6.2 billion in 2009 to $8.2 billion by 2014 as IPTV grows at a CAGR of 26 percent within the forecast period, according to the latest market study by Pyramid Research.

The U.K. communications market is one of Europe's largest and most dynamic markets, expected to generate $47.1 million in revenue for 2009. Like most mature European markets, the major sources of growth, in absolute revenue terms, are mobile data and fixed broadband, notes Andrei Tchadliev, analyst at Pyramid Research and author of the report.

However, it is expected that IPTV revenue will grow at a CAGR of 26 percent from $75 million in 2009 to $237 million in 2014, while triple-play packages surpass double play, both contributing to the overall growth in the pay-TV market.

The pay-TV market remains dominated by satellite provider Sky with close to 9.9 million subscriptions estimated for 2009, while IPTV remains concentrated to a small share of the market with only 4 percent of total pay-TV households choosing the service.

The breakup of Sky's market control over exclusive sporting events, notably football and premier entertainment content, will likely result in an increase in the share of cable and IPTV as a percentage of pay-TV households.

Tchadliev adds that growth in pay-TV services will also be boosted by the growing popularity of multi-play packages on account of cost.

"We believe that by 2013, triple-play services -- such as fixed voice, broadband, and pay-TV -- will overtake double play," he says. "It is estimated that in 2009, close to 19.4 million households will have signed up for triple-play services, largely on account of the value the offer over stand-alone Internet, voice, mobile, and pay-TV packages."

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