Profitless growth predicted for IPTV

 The IPTV market  is expected to grow tenfold to reach 40 million subscribers world wide by 2010 with Europe dominating global usage, but with the U.S. market predicted to surge as the two major telcos deploy their high speed networks, according to U.K. forecaster, Canalys.

At the same time Asian IPTV usage is also expected to grow rapidly, although not at the same rate because of regulatory constraints. By 2010 Canalys is forecasting Europe--led by France--will have 38 percent of the global IPTV market , while North America will represent 31 percent-- sharply up from 9 percent in 2006.

But while market growth will be strong Canalys VP Alessandra Fitzpatrick does not see early profitability: "IPTV can be viewed primarily as a defensive strategic move by service providers at present. While telcos have aspirations of creating new, profitable revenue streams, the key short-term driver of market development is improving customer loyalty and reducing churn levels. IPTV will be a financial loss leader for many providers over the next five years when the costs involved with rolling out and evolving services are factored in, but if telecom operators are to retain their position as primary providers of consumer communication services, this may be a price they need to pay. It is difficult to see how the majority of IPTV providers will be able to generate significant profit from services in the near term, especially when the need to be price competitive is considered."

Europe represents the biggest market in terms of customer boxes, but the lead over the US is significantly less when the markets are compared by revenue.

For More:
- Canalys Release

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