IPTV in Latin America: Not so fast!

DUBLIN, IRELAND: Research and Markets has added the "IPTV in Latin America: Not So Fast" report to its offering.

IPTV will take a backseat to other pay-TV platforms as telcos seek alternative strategies to meet the significant market demand, according to this latest report.

IPTV in Latin America: Not So Fast examines the market for pay-TV services in general and IPTV in particular in Latin America. The 18-page report analyzes the regulatory hurdles faced by IPTV and the progress telcos are making in introducing various pay-TV services, as well as the various strategies they employ to make the most of the opportunity in the face of significant challenges.

The report cites more than 23 examples of pay-TV services and contains case studies of Telefónica and Telmex/América Móvil that investigate their respective pay-TV strategies across the region. In recent years, telcos around the world have developed an attraction to the idea of IPTV as a new revenue source and competitive instrument.

However, IPTV is simply not living up to expectations in Latin America. "Fewer than 0.1 percent of households in Latin America subscribed to IPTV at year-end 2008 and the technology had very few net additions during the year," notes Derek Medlin, analyst at Pyramid Research and author of the report. "As the market has evolved, it has become evident that there is significant demand for pay-TV, which is pushing telcos to seek alternative strategies to meet this demand," he says. "However, the reality is that the struggles on the front end have severely crippled adoption so far; regulatory issues are blockading IPTV altogether, or at least leading to deployment delays," he adds.

Although pay-TV penetration remains anaemic relative to the adoption of pay-TV in other regions, the author believes this is due to a lack of supply rather than a lack of demand. "Recent initiatives from telcos and cable companies are catalyzing the market by thrusting a variety of pay-TV services into underpenetrated areas and market segments," says Medlin. "As a result, adoption is taking off, making the low penetration levels an indicator of the growth potential, especially when gauged against the levels of adoption reached in other regions," he explains.

"IPTV will have to take a backseat to other pay-TV platforms for the rest of the forecast period, becoming part of a lineup of pay-TV offerings rather than the sole telco service," Medlin adds. In the future, the author does not expect IPTV to break out of its niche until around 2012, when it will be approaching a 5 percent share of total pay-TV subscriptions. "Pyramid estimates that by 2014, the region will be home to more than 4.4 million IPTV subscriptions, which will reach 2.6 percent of all households," he says.