Over the past decade incumbent telecom operators in Asia Pacific have seen their revenue growth from traditional businesses slow down with narrowed profit margins, due to increasing competition caused by deregulation.
Competition has pushed broadband subscription prices lower and lower. The distribution of television over IP is being viewed as a value-added service with strategic importance in the future broadband service portfolio to increase ARPU and created stickiness for users. Suddenly everyone is talking about how IPTV could hold up share prices of traditional fixed-line operators.
But how do they persuade broadband subscribers who currently have cable or satellite TV service‾
There are a few key issues we have to consider.
Broadcasting and telephony in most countries have separate regulatory bodies. Telcos' wish to expand their outreach of IPTV services is expected to impair the interest of the traditional cable and satellite TV service providers, which have strived to influence the TV broadcasting regulators to retain their proprietary rights of providing TV services.
The puzzle of granting IPTV licenses to telcos has not been completely solved.
Content is the king. Most commonly viewed channels are already delivered by cable or satellite operators in Asia.
How to differentiate IPTV could be a big problem. Convergence and deregulation of the communications and multimedia industries are definitely the trends for the next ten years.
Improve user experience.
Triple play as a key. There is no doubt that everything has to move to IP to enable real triple-play service. Next-generation IP networks provide the platform for the telecom operators to lower operational cost and provide bundled services at attractive discounted price.
PCCW in Hong Kong and Yahoo! Broadband in Japan have demonstrated the market opportunity for IPTV.
There are dozens of regional operators that want to copy the same business model to achieve better business performance. However, the operators first have to address internal issues such as moving to high-performance next-generation IP networks, improving security and having the right billing solutions.
Advanced IP networks not only help operators to lower operational cost by managing a single network for different services, it also enables consumers to obtain high-definition TV content via IPTV.
Piracy problems could be disruptive to the overall IPTV market development. Although there has no major precedent yet, content providers from CNN to the Hollywood studios continue to be skeptical about distributing their content over end-to-end IP networks.