(15 November 2007 8:25 pm)

NEW DELHI: Gartner's latest report on IPTV says that carriers will struggle to turn IPTV into a mainstream pay TV distribution platform on par with established cable or satellite services, especially in the large Indian and Chinese markets because of restrictive laws.

In the context of some Indian communication majors gearing up to launch their IPTV platforms, the Gartner report shows that India is not slated to become the big story in the near future.

After a burst of activity in 2005, subscriber growth for IPTV in the Asia-Pacific region has slowed down in 2006, with regulatory problems proving to be a big hurdle in several large markets.

The report says that in such large Asian markets it is media regulations which prevent carriers from becoming broadcasters and are holding back the mass market launch of IPTV services.

The lukewarm revenue forecast till 2010 is despite the fact that the research firm predicts an eight-fold increase in users between 2006 and 2010.

IPTV will not be a panacea to replace diminishing voice revenue for carriers, but, in the medium term it can be a powerful tool for carriers in helping retain customers on their existing voice and broadband services, the Gartner report informs.

Gartner says subscriber growth in the next nine to 12 months will largely come from IPTV services that are already launched. However, beginning in 2008, many more new services will go commercial and subscriber growth will begin to take off. Carriers need to look beyond the immediate revenue opportunity to understand the longer-term importance of IPTV.

This is because IPTV is not a single service; it is in reality a new carrier distribution platform over which many consumer communication and entertainment services can be offered eventually.

"The difficulty in carving out a distinctive proposition that will clearly differentiate early IPTV services from other established TV options will lead many service providers around the world to drive adoption by competing on price in the next few years," said Gartner Consumer Communications Services group research director Elroy Jopling.

"As a result, the global picture for IPTV revenue is much less impressive than for subscriber numbers," added Jopling.

The number of households around the world subscribing to Internet Protocol television (IPTV) services offered by telecom carriers will reach 48.8 million in 2010. Buoyed by new service launches IPTV subscribers will more than double in 2007 from an expected 6.4 million in 2006 to 13.3 million, and yet, the revenue stream will not be impressive.

According to the report, there have been some successes by a few of carriers indicating that consumers are willing to adopt IPTV, but still the market remains in its infancy. Many of the world's largest carriers are taking a cautious approach to rolling out services, mindful that cable and satellite operators are also continually evolving their Pay TV offers, and that they, as carriers, need to be able to match the competition in functionality and content choice if they are to make an impact.

Notably in North America, Gartner reports a big challenge ahead to catch-up with the cable operators in their ability to offer voice, broadband and TV services.

The report further informs that North America is forecast to have one of the highest IPTV growth rates in the next five years, with subscribers doubling nearly every year to 2010. Although currently behind Europe and Asia/Pacific, the next 12 months should produce the main inflection point in the growth of IPTV in North America as the major players launch new TV services.