The Asia Pacific IPTV market is expected to reach the 22.4 million subscriber mark by 2013, despite the current “half hearted” approach from carriers to date. The latest research from Frost & Sullivan’s IPTV Business Case, reveals that the IPTV subscriber base in Asia-Pacific, which covers 13 countries, reached 4.1 million in 2007 and estimates this to reach 22.4 million by the end of 2013, at a compound annual growth rate of 32.7%. Of the 13 countries, eight had commercial IPTV services in 2007, while the rest are conducting trials for expected deployments from 2009 onwards.
Frost & Sullivan research analyst Adeel Najam believes that IPTV requires a full-throttle implementation to really take-off. “As the broadcasting and pay-TV industry is uncharted territory for most telecom players, telcos will need to penetrate the market with an offensive approach, complete with a content acquisition strategy, to successfully attract cable or satellite TV subscribers,” he says.
Hong Kong has the highest household IPTV penetration rate at 45.3%, and is the only market where IPTV dominates the pay-TV industry with a 46.7% subscriber market share in 2007 through its incumbent PCCW. Cable TV controls 41% of Hong Kong's 2.18 million pay-TV subscriber market, while satellite DTH services hold the remaining 12.3%.
According to Najam, IPTV service is a must for operators with broadband speeds upwards of 10Mbps in order to fully optimise bandwidth capacity.
“Service providers with high-speed broadband transmission networks have the competitive advantage in deploying IPTV services as they can leverage their networks to offer bandwidth intensive services like high-definition TV (HDTV). The first line of attack for any fixed-network operator to realistically transform into multi-play service providers offering voice, data and video services is by converting its existing broadband subscribers,” he adds. “This will ensure lower subscriber churn rates and increase operator revenues and ARPU (average revenue per user) through service bundling.”
Content, however is critical for IPTV to succeed as consumers understand only the 'TV' element of IPTV. ”Content exclusivity is a definite advantage, although not a pre-requisite,” he says.
“Acquiring broadcast rights to popular content such as live sporting events and premium broadcast channels requires huge investments which can take time to recoup,” adds Najam.
Over time, wider deployment of IPTV is expected to increase competition in the pay-TV industry and encourage the introduction of innovative value-added services and production of local content. “We expect this to eventually reduce the overall cost of multi-play services and boost uptake of IPTV,” Najam concluded “In some cases we also expect governments and regulators to create a level playing field between various technology platforms in terms of content ownership which would give the industry a fillip.”