While Internet Protocol TV (IPTV) has yet to launch in SA, it is growing in popularity in Europe, according to a recent report by growth consulting company Frost & Sullivan.
Explaining the rising popularity of IPTV in many countries throughout Europe, the new report says: "Service enhancements enabled by IPTV - including on-screen programming information, time shifting features and multiple camera angles - are due to the two-way communication capability of the broadband connection and the point-to point distribution."
The pioneers
"France Telecom, Telef'onica of Spain, Telecom Iceland and TeliaSonera in Sweden were the first [telecoms service providers] to deploy commercial television over broadband," says ICT senior industry analyst Fernando Elizalde.
They began rolling out triple-play services at the end of 2004 and beginning of 2005, he notes. Elizalde adds that their success will be determined by their ability to deliver a service truly differentiated from that of cable operators in content, applications, customer service and overall user experience.
Current pay-TV penetration and availability, and viewer preferences are also likely to strongly impact service uptake in each country, according to the report.
Two-way communication capability allows for true interactivity between subscribers and the network, and point-to-point connectivity makes it possible for each viewer to watch individual broadcasting, explains the report.
Declining revenue
"With the ongoing deregulation of the European telecommunications market and the subsequent entry of alternate service providers, incumbent telecom operators are witnessing a sharp decline in revenues from traditional business streams," the report states.
Voice over Internet Protocol and broadband over cable modem further contribute to this trend, causing telecom operators to focus on delivering bundled services, such as IPTV, that provide higher revenues and growth, it adds.
The constraints
"IPTV involves not only network upgrades, but also securing premium content for distribution, resolving operational, billing and management integration issues as well as providing a satisfactory user interface," cautions Elizalde.
"All these represent significant challenges to telecom operators entering an unfamiliar territory, such as the distribution of entertainment content."
However, the report concludes that even taking into account these potential barriers, IPTV is likely to establish itself as a valid alternative to cable and satellite TV over time. It predicts that its acceptance will be more pronounced once communication services (voice, instant messaging or unified messaging) are fully integrated into the service.
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