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European Telecom Operators Look to Internet Protocol Television (IPTV) to Offset Declining Traditional Revenues

Date: 11/7/2007 2:52:29 PM

LONDON, March 21 /PRNewswire/ 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. Technologies such as voice over Internet Protocol (VoIP) and broadband over cable modem are further contributing to this trend and to offset this decline as well as to reverse the downward trend in their customer base, telecom operators are beginning to focus on delivering bundled services that provide higher revenues and growth. IPTV is one such service, which while complementing the bundle, also provides telecom operators with a defence strategy against the entry of cable operators in the telephony business.

Typical service enhancements enabled by IPTV will include onscreen programming information, time shifting features, and multiple camera angles. The technology is able to provide these distinctive enhancements due to the twoway communication capability of the broadband connection and the pointto point distribution. While the twoway communication capability allows for true interactivity between subscribers and the network, pointtopoint connectivity makes possible for each viewer to watch individual broadcasting such as video on demand.


"However, 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, among other concerns," notes ( ICT Senior Industry Analyst Fernando Elizalde. "All these represent significant challenges to telecom operators entering an unfamiliar territory, such as the distribution of entertainment content."

Notably, market participants consider premium content in the distribution business the most important element in the delivery of television over digital subscriber line (DSL). Service providers will have to invest considerable time and effort in procuring content as well as exclusive sports material from major studios and producers. This is all very important in order to launch their services and differentiate them from those of cable operators.

Also, service providers need to understand that despite the high expectations from the offering, IPTV may not be an immediate success throughout Europe. The success of this offering will be different in each country, depending on specific country and regional characteristics. Factors such as current payTV penetration and availability, viewer preferences and regionalisation, among others are likely to strongly impact service uptake in each country.

Nevertheless, IPTV is likely to establish itself as a valid alternative to cable and satellite TV over time. Also, its acceptance is likely to be more pronounced once communication services be it voice, instant messaging or unified messaging are fully integrated to the service. With all the elements in their right place, IPTV might very well be the service to push broadband beyond PC penetration and Internet access, thus helping operators nearing saturation levels in broadband penetration reach a wider market.

"Incumbent telecom operators began rolling out tripleplay services at the end of 2004 and at the beginning of 2005, with France Telecom, Telefónica of Spain, Telecom Iceland and TeliaSonera in Sweden being the first ones to deploy commercial television over broadband," says Mr. Elizalde. "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."  Phone Card News Stats


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