IPTV services - Only a prelude to future home consumer services

Published: 9 Jun 2008

Since IPTV has been deployed in Europe in 2001, TV services offered by telecoms operators have gone through several iterations. When Fastweb in Italy introduced TV services in 2001, it was mainly Video-on-Demand (VOD) and a limited broadcasting service. Since then, telecom operators have expanded their TV experience by increasing TV content and improving the viewing experience. France Telecom, in a March 2008 announcement, planned to add another dimension of its TV services to customers, facilitating the same content viewing on TV, PC and any mobile device. This follows other operators' drive to capture a larger share of the consumer's entertainment and communications expense. British Telecom, through its BT Vision and Microsoft Xbox tie-up, targets another aspect of entertainment, gaming, in moves that align to its digital home concept. We believe that telecom operators continue to seek the holy grail of that sustainable revenue source, in this case, the potential of revenues from addressing service demands in the home. To achieve that, there are opportunities for an expanded eco-system beyond communications as successful cross industry partnerships can give a significant first mover advantage. Fastweb proved that in Italy in 2001 and has rightly taken the place as the pioneer of successful IPTV service in Europe.

Key takeaway points

  1. Organic IPTV subscriber growth is expected to slow in coming years and the share of pay TV is expected to reach < 20% by 2010. Telecom operators are increasing their customer base in order to expand their service offerings into the home consumer space.
  2. Opportunities exist not just for media and content industry, but also for the home electronics device sector.

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