Telcos worldwide are finding that IPTV is resonating with their respective customer bases as service penetration reached 15 percent in the first quarter of 2012, reveals a new TeleGeography report.
On a regional basis, the penetration rates of IPTV and pay-TV vary by region. In some regions, such as North America and Europe, IPTV penetration is reaching saturation.
Driven by AT&T (NYSE: T) and Verizon (NYSE: VZ) with their U-verse and FiOS service sets, U.S.-based telcos have been able to successfully sell their video services to nearly 40 percent of their eligible broadband base. During Q1, AT&T and Verizon reported that they added 108,000 FiOS TV and 200,000 U-verse TV subscribers, respectively. While this is certainly a major milestone, the reality is that with 80 percent of households purchasing a pay-TV service, the market has become saturated.
Western Europe's pay-TV market is also close to the saturation point even though it has a penetration rate 20 percentage points below the North American market. One of the challenges that both Western and Eastern European service providers face is the presence of free-to-air service.
In addition to Europe and North America, IPTV growth prospects in Latin America, Africa and the Mid East are also at a standstill. Latin America has been held back by both a constrained by market structure and an unsupportive regulatory environment, while free-to-air services and piracy have proven to be roadblocks to growth in Africa and the Middle East.
One market that's ripe for growth is Asia Pacific, a region that has a 46 percent pay-TV penetration rate, with telcos selling IPTV service to only 12 percent of their broadband subscriber base.
"Although the number of IPTV subscribers has grown by 36% in the last year alone, some operators are now seeing subscriber declines," said John Dinsdale, a TeleGeography analyst. "Most of the remaining growth in IPTV will come from the Asia-Pacific--we expect the region to account for two thirds of global subscriber growth over the next five years."
For more:
- TeleGeography has this post
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