IPTV Markets in Europe - Telecom Operators Strategies

With the deregulation of the telecommunications market, incumbent telecom operators are witnessing a gradual decline in revenues from traditional business streams. In addition to the entry of alternate service providers, soaring wireless adoption and new technologies such as voice over Internet protocol (VoIP) and broadband over cable modem are all affecting traditional business. In neutralising these trends, telecom operators are looking to create additional revenue streams through the delivery of new services. The distribution of television over Internet protocol, or IPTV, is one such value-added service that is expected to address the issue of retaining the customer base while also generating new revenues.

This Frost & Sullivan research service is an analysis of IPTV markets in Europe and telecom operators' strategies. It addresses the challenges in deploying television-over-broadband solutions, particularly from the incumbent service providers' point of view and delves into the elements of success for the services while also estimating market penetration in Europe. Further, it also looks at current and announced IPTV deployments throughout the continent, analysing in detail the strategies of some of the leading operators.

Apart from improvements in digital video compression standards, advancements in digital subscriber line (DSL) equipment have enabled the delivery of high quality video over the telephone line. This means that the telecom operators can now enter the television distribution market and offer triple play, which is telephony, data access and entertainment, over the same access. Also, end-user experience with high-speed Internet and video streaming over the Internet, among other Internet applications, has helped prepare the subscriber for other services to be delivered over their broadband access. In other words, technological advancements and end-user market readiness are positively facilitating the introduction of IPTV services by telecom operators.

However, offering IPTV involves not only network upgrades, but also securing premium content for distribution. "Resolving operational, billing, and management integration issues, and providing a satisfactory user interface are key aspects that could dictate the success of the service," says the analyst of this research service. "Other issues range from bandwidth aggregation and transport to wiring the house for a new service and all of these represent challenges for operators entering unfamiliar territory."

IPTV could Drive Broadband Penetration beyond PC Penetration and Internet Access

Broadband penetration has reached saturation levels in some European countries, and other countries in the region are fast nearing these levels. Considering this, television over broadband is expected to largely help telecom operators break the barrier for broadband penetration built by PCs and Internet usage. In ensuring this, service providers will need to procure quality content from major studios and producers along with exclusive sports material. This is important in order to launch the service and differentiate it from that of cable operators.

"Incumbent telecom operators began rolling out triple play services at the end of 2004 and in the beginning of 2005, with France Telecom, Telefonica of Spain, Telecom Iceland and TeliaSonera in Sweden being among the first to commercially deploy television over broadband," says the analyst. "Telecom operators launching IPTV can make it a success if they deliver a service that is truly differentiated from that of cable operators, not only in content, but also in applications, customer service and overall user experience."