Infonetics Research: IPTV Set to Skyrocket by 2009

IPTV service revenue, subscribers and capital expenditures are increasing rapidly, says a new report, “IPTV Equipment and Services Market Outlook,” by analyst firm Infonetics Research.

Worldwide IPTV service revenue will surpass $44 billion in 2009, according to the report. DSL providers account for the bulk of service revenue now, but cable broadband providers also will migrate to all-IP triple-play services in the next few years, possibly offering wireless services as well.

According to the report, service providers anticipate big payoffs from IPTV, judging from the significant investments they are making. In 2004, service providers worldwide spent $304 million on IPTV-related services infrastructure, and are expected to spend nearly $4.5 billion in 2009 as providers look to IPTV services as the means of raising ARPU from a near-saturated broadband subscriber base.

"Service providers have been investing in IP DSLAMs, broadband edge routers, and aggregation switches to prepare for IPTV in the network infrastructure layer, but are having to make significant investments in the services layer too, adding video-on-demand servers, encoders and headend equipment as well," says Richard Webb, Infonetics Research analyst and lead author of the report. "But the biggest decision they face right now is who to choose as a middleware partner."

IPTV subscribers are increasing briskly as well, anticipated to top 53 million worldwide in 2009. Subscriber growth is strong in all regions, especially in Asia Pacific, where faster forms of DSL like VDSL and ADSL2/2+ are stimulating subscriber growth.

"Service providers in Asia Pacific and EMEA, especially PCCW in Hong Kong and FastWeb in Italy, and independent operators in North America like SureWest, are already experiencing significant IPTV subscriber growth," notes Jeff Heynen, directing analyst for broadband and IPTV at Infonetics Research. "We expect SBC, Verizon, BT, and other large providers to successfully conquer the technical and marketing hurdles before them, and when they do, their IPTV subscriber figures will increase substantially year-over-year."

The Infonetics report analyzes the fundamental drivers, growth areas and technologies gaining the most traction in the market, tracking IPTV service infrastructure capex, service revenue and subscribers.

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