IPTV growth continues at slower pace, says IHS Digest

International analyst firm IHS Screen Digest believes there is "still plenty of room for growth" for U.S. IPTV providers, based on reported subscriber increases for both AT&T (NYSE: T) U-verse and Verizon (NYSE: VZ) FiOS, but the rate is slowing.

This optimism comes after recent fourth quarter and annual results showed that subscriber growth is slowing for both providers, but both have future plans that will increase their subscriber numbers.

"Through 2017 both major U.S. IPTV players will continue to see their subscriber gains moderate as they become more mature, and the annual pay TV business continues to see the gap between pay TV households and TV houses grow yearly," the analysis noted. "By 2017 IHS Screen Digest expects that IPTV in the U.S. will account for 13.4 [million] pay TV households, or 10.8 percent of all pay TV subscribers."

FiOS added 134,000 subscribers in the fourth quarter, 60,000 fewer than it acquired in the same period a year ago. For the full year, Verizon pulled in 553,000 more video subscribers to end with 4.72 million. AT&T beat that with 192,000 new subscribers compared to 200,000 the previous year to bring its total to 4.53 million customers.

AT&T's aggressive U-verse stance means the company has the opportunity to expand in the future and even pass FiOS by the end of this year, the analysis said.

"In the current year, AT&T plans to dramatically increase its U-verse footprint, and overall quality of its network," the IHS Screen Digest analysis continued. "U-verse is expected to pass FiOS in terms of total video subscribers in 2013, with the pass likely to occur near the end of the year."

Verizon's future was a bit less exciting, although there are positives worth watching, the analysis said.

"Unfortunately for Verizon, FiOS is largely done expanding its footprint into new markets, and the penetration is significantly higher than that of U-verse," the analysis said. On the other hand, Verizon, with an aggressive sports-free programming option, "is taking the first steps down a long road in which pay TV operators are going to stand toe-to-toe with their programming partners," the analysis concluded.

For more:
- IHS Screen Digest had this story

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