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IPTV demand to skyrocket

Analyst predicts 53.7 million subscribers and $44bn in services revenue by 2009

  • Robert Jaques
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The popularity of IPTV services is set to "skyrocket" as the technology gears up to generate revenues of $44bn within four years, research published today has predicted.

A report by Infonetics Research noted that DSL providers account for the bulk of current services revenue, but that cable broadband providers will migrate to all-IP triple-play services in the next few years, possibly offering wireless services as well.

Service providers anticipate big payoffs from IPTV judging from the significant investments being made, the analyst firm said.

In 2004, service providers worldwide spent $304m on IPTV-related services infrastructure, but this will grow to almost $4.5bn in 2009 as providers look to IPTV services as the means of raising average revenue per user from a near-saturated broadband subscriber base.

"Service providers have been investing in IP DSLAMs, broadband edge routers and aggregation switches to prepare for IPTV in the network infrastructure layer," said Richard Webb, Infonetics Research analyst and lead author of the report.

"But they are having to make significant investments in the services layer too, adding video on demand servers, encoders and head-end equipment. The biggest decision they face right now is who to choose as a middleware partner."

IPTV subscribers are increasing briskly as well, topping 53 million worldwide in 2009. Subscriber growth is strong in all regions, especially in Asia Pacific, where faster forms of DSL like VDSL and ADSL2/2+ are stimulating subscriber growth, Infonetics stated.

"Service providers in Asia Pacific and EMEA, especially PCCW in Hong Kong and FastWeb in Italy, and independent operators in North America like SureWest, are already experiencing significant IPTV subscriber growth," noted Jeff Heynen, directing analyst for broadband and IPTV at Infonetics Research.

"We expect SBC, Verizon, BT and other large providers to successfully conquer the technical and marketing hurdles before them, and when they do, their IPTV subscriber figures will increase substantially year-over-year."

According to the study, IPTV services infrastructure capital expenditure will grow 1,377 per cent, from $304m to close to $4.5bn by 2009.

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