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40 million worldwide IPTV subscribers predicted by 2010
New forecasts from leading analyst firm Canalys indicate that there will be 39.6 million worldwide IPTV subscribers by the end of 2010. This will be a tenfold increase, growing from fewer than four million subscribers in 2006.
North America will show rapid growth, with 12.1 million subscribers expected by 2010, representing 31% of all subscribers. The huge potential in the Asia Pacific region will be restricted by regulatory issues. Despite this, Canalys forecasts more than 11 million subscribers across the region by the end of the decade.
Europe, the Middle East and Africa accounted for two-thirds of global IPTV subscribers at the end of 2006, and will remain the largest market through to 2010, when the region will account for 38% of the worldwide total.
Early uptake in France has been driven by a number of factors, notably low broadband prices, the prevalence of bundling low-cost IPTV service with broadband/telephony packages and limited competition from cable operators. At the end of 2006 there were 1.6 million subscribers in France.
However, it is predicted that in most other markets, high levels of competition from existing services will make it difficult for IPTV providers to compete unless they can differentiate their services, either by providing better quality of service or by maintaining lower subscription fees.
In the opinion of Canalys, IPTV providers will have to compete on price in the short term. As a result, deploying TV services may not prove to be a significant revenue generation opportunity, although establishing a position in this emerging sector will be crucial for service providers seeking to protect their positions as prime providers of communication services.
Canalys considers that IPTV will be a financial loss leader for many providers over the next five years, factoring in the costs involved with introducing and evolving services. However, if telecom operators are to retain their position as primary providers of consumer communication services, this may be a price they need to pay.
In the short term, it is difficult to see how most IPTV providers will generate significant profits from the service since they’re competing largely on price.
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