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 (http://IT.frost.com) 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."