Global IPTV service revenue to grow to $46 billion by 2014

DUBLIN, IRELAND: Research and Markets has announced the addition of the "IPTV Global Forecast 2010 to 2014 - Semiannual IPTV Global Forecast Report" report to its offering.

The report breaks down the IPTV ecosystem into nine industry segments: DSL Subscribers, IPTV Subscribers, Access Systems, Video Headend Encoders, Video-on-Demand Server Software, Set-top Boxes, Middleware, Content Protection/Digital Rights Management (CP/DRM), and System Integration and Professional Services.

In addition, this report splits the market into four regions around the world: Europe, Asia, North America and Rest of World, and also provides a global market summary. To do this, the report identifies over 800 Service Providers worldwide offering IPTV services. The number of companies has increased since the last report, since more Service Providers have launched services in the last six months or announced new trials.

This data is frequently refreshed to ensure that duplicates are removed and that the most up-to-date numbers are used. The new forecast indicates that the number of global IPTV subscribers will grow from 41.2 million at the end of 2010 to 101.7 million in 2014, a compound annual growth rate of 25.3 percent.

As for service revenue, the global IPTV market is $17.5 billion in 2010 and is forecasted to grow to $46 billion in 2014, a CAGR of 27 percent. By 2014, Europe and North America will generate a larger share of the global revenue, due to very low ARPUs in China and India, the fastest growing (and ultimately, the biggest markets) in Asia.

Executive summary
The new report from MRG reveals global annual growth of IPTV subscribers of 25 percent CAGR in 2010-2014. Despite economic hardship in some countries, robust broadband and IPTV investments drive growth as a means to meet and outperform cable and satellite competition.

IPTV operators are using fiber in high-competition markets and advanced DSL such as channel bonding and VDSL2 in other (less competitive) markets. In this way, Telcos can discreetly improve their IPTV bandwidth capacity to sub-markets that need upgrades without overspending in markets that dont require immediate upgrading.

The Eastern European IPTV market is moving quickly to early maturity, while ROW markets shows faster gains than other regions. As late as 2007, Eastern Europe had only a few IPTV trials or startups. Now, there are 16 fully operating IPTV operators and another three to six in trial, says Jose Alvear, MRG Analyst.

These operators continue to grow their service base, due mainly to the fact that they have much greater technical and creative control over their service than their cable competition does. Of the 102 million IPTV subscribers in 2014, Europe will maintain 45 percent of the global market, Asia 31 percent, North America 19 percent and ROW about 5 percent. IPTV operators are using discreet upgrades to match and surpass cable competition.

High ARPUs still favor Europe and US IPTV markets, with largest service and systems revenues also coming from these regions. Of the specific CapEx items tracked by the report, expenditures will grow from $3.1 billion in 2010 to $5.1 billion in 2014, and service revenue will grow from $17.5 billion to $46 billion. Over 50 companies are profiled from emerging markets. Despite the obstacles, by 2014, at least 23 SPs (mostly in China and Europe) will have exceeded the million-subscriber mark.

Also, while STBs make up over 70 percent of the CapEx expenditures, expect integrated hybrid, IPTV, and OTT STBs (including connected TVs or I-STBs embedded in TV Sets) to account for increasing portions of that CapEx growth. An estimated 125 percent additional CapEx growth is related to backbone, NID/gateway and VOD Encoder sales not tracked in this report.

In the North American markets, all eyes have recently turned to Verizon and AT&T, each adding about 1 million subscribers in 2009. Since Verizon stopped signing new franchise agreements outside its existing footprint, speculation is growing that Verizon will switch from its QAM/IPTV architecture to an all IPTV (fiber-based) architecture for future franchises in 2011.

Meantime AT&T, with no such technical constraints, is free to use a discreet upgrade approach to growing bandwidth using a mix of advanced DSL or FTTX as needed. Furthermore, its continued success with new Apple productsdespite network slowdownscontinues to drive new revenues its way.