IPTV in China lucrative despite obstacles

CW Cheung/Ovum
15 Jun 2007

With Chinese fixed operators experiencing continuous decline in fixed-line growth for five consecutive quarters now -- from the first quarter of 2006 until the first quarter of 2007 -- IPTV seems to be a prime candidate that will bail them out.

The fixed operators in China have good reason to look for a new revenue generator. At the end of 2006 mobile penetration was 35.3% while fixed penetration stood at 28.1%, and mobile revenue accounted for 47% of total telecom revenue.

Why do telcos around the world rate IPTV development highly despite its relatively small penetration (and revenue) contribution in last couple of years. There are numerous factors behind this trend, but high on the list is the growing maturity of IPTV technologies, with improved price performance, as well as an abundance of completed trials, resulting in the sharing of deployment experience worldwide. Another factor is the importance of first-mover advantage since it's not a matter "of doing it or not", but "how to do it right and faster than other competitors."

Operators are obviously attracted by the potential services that are both scalable and have a strong value propositions for the mass market. It's also a natural transition from simple bundles to triple-play services, and a way to sustain differentiation of broadband access services.

IPTV ready for take off

Source: Ovum Forecast

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