Worldwide IPTV Subscribers To Reach 48.8 Million by 2010

Gartner says that despite the eight-fold increase in users between 2006 and 2010, carriers will struggle to turn IPTV into a mainstream pay TV distribution platform on par with established cable or satellite services.

The report says that the IPTV market remains in its infancy, with many of the world’s largest carriers taking a cautious approach to the roll out of services.

Gartner says that a big issue in the North American market is IPTV carriers playing catch up with cable operators in their ability to offer voice, broadband and TV services.

Subscriber growth in the next nine to 12 months is predicted to come mostly from IPTV services that are already launched. However in 2007 many more new services will go commercial and subscriber growth will begin to take off.

North America is forecast to have one of the highest IPTV growth rates in the next five years, with subscribers doubling nearly every year to 2010.

In September, Research and Markets said that global IPTV subscriptions are expected to jump from two million to 34 million between 2005 and 2010 (see US IPTV Subscriptions To Increase By 78% By 2010).

Although currently behind Europe and Asia/Pacific, Gartner predicts that the next 12 months should produce the main inflection point in the growth of IPTV in North America as the major players launch new TV services.

Western Europe currently has the largest number of IPTV subscribers of any region with 1.6 million subscribers. France leads in adoption for the region and will end 2006 with around half of Western Europe’s IPTV subscribers.

Gartner attributes the success of IPTV in France to an aggressive (low entry price) push from competitive service providers including Free and Neuf as well as France Telecom’s early embrace of IPTV.

After a flurry of activity in 2005, subscriber growth for IPTV in Asia/Pacific region has slowed down in 2006, with regulatory problems becoming a big hurdle in several large markets.

However, some of the problems in South Korea and Japan are likely to diminish in the next 12 months, allowing carriers to move ahead with plans which have been put on hold.

The biggest prospective IPTV market in the region is China, however it too is mired in regulatory problems, although Beijing is hosting the Olympic Games in 2008 and there are hopes that this will give the authorities the motivation to clear up the current problems.

Andrew Chetham, research vice president in Gartner’s Consumer Communications Services Group, said: “Evidence from the early IPTV service launches clearly shows that price is a key factor in uptake. The most-successful IPTV services so far have been offered either as part of an overall household bundle of services, including voice and broadband or they have allowed customers to cut bills by paying only for what they watch.

“In both cases, the revenue per household generated by the IPTV service itself has been at a substantial discount to that achieved by existing Pay TV options. While IPTV does offer growth prospects for carriers, the low yields it is likely to currently generate, do not make it an especially exciting prospect as a new standalone business.”

Elroy Jopling, research director for Gartner’s Consumer Communication Services group, said: “The difficulty in carving out a distinctive proposition that will clearly differentiate early IPTV services from other established TV options will lead many service providers around the world to drive adoption by competing on price in the next few years.

“As a result, the global picture for IPTV revenue is much less impressive than for subscriber numbers. Global IPTV revenue during the period will grow from $872 million in 2006 to a still relatively modest $13.2 billion by 2010.