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January 18, 2007

ABI Research Predicts IPTV Explosion in China After 2008

By Susan J. Campbell, TMCnet Contributing Editor

The telco landscape in China is interesting in that swift changes are happening every day. Once the country was able to shed fierce regulation, technological innovations have been appearing almost constantly to improve and even re-create the landscape.
Chinese operators are also finding that diversification is necessary in order to thrive in what has become a fiercely competitive environment. One move announced in November of 2006 was the Jiangsu Telecom network expansion that was launched in an effort to meet subscribers’ demand for IPTV (News - Alert), VOD and other advanced IP services. The region has seen a series of moves along these lines to support multi-play service offerings.
ABI Research’s (News - Alert) broadband research analyst Serene Fong shared in a statement that, “More operators than ever are offering multiple services in an attempt to retain customers and to increase revenue. Telecom operators are venturing into the TV industry, while cable operators move into the voice business."
Due to its long-term plan of unifying broadband, Internet and television, IPTV is the Chinese government’s platform of choice. As a result, the future of the industry continues to be viewed optimistically. More resources are expected to be allocated to make IPTV a success as it will play an important role in multimedia communications and major upcoming events in China.
Fond highlighted that the growth of IPTV will remain modest for now, but will take off only after 2008. Swift adoption will be boosted by major events like the Beijing Olympics in 2008 and then the 2010 World Expo in Shanghai.
The way is paved for IPTV to reach out to the potentially huge addressable market by China’s flourishing broadband environment. In a recent ABI Research study, IPTV take-up in mainland China is expected to pass the 23 million subscriber mark by 2012.

Certain bottlenecks have been restricting growth for IPTV. Fong noted that while the service is regarded as a potential revenue generator, the lack of content may prove a short-term barrier to increasing uptake rapidly. This content, which is strictly controlled by media authorities and the government, is not rich enough to attract paying users. Overseas content, which is restricted and difficult to get approval for, does not help alleviate the situation.

ABI Research’s new study, “IPTV in China: Analysis of the Chinese IPTV Market, Regulatory Environment and Growth Potential” details operator and vendor activities along with the industry environment and emerging trends.

IPTV technology presents an interesting dichotomy in the Chinese market in that it is expected to see rapid expansion, yet faces content restrictions that negatively impact the appeal of the service to paying subscribers.

This latest study from ABI does anticipate growth that will coincide with major events, but will those events provide the staying power that the channel needs in order to sustain long-term adoption and growth? This appears to be something that will only be revealed with time.

Want to learn more about IPTV? Then be sure to check out TMCnet’s White Paper Library, which provides a selection of in-depth information on relevant topics affecting the IP Communications industry. The library offers white papers, case studies and other documents which are free to registered users. The papers are authored by industry leaders, who, in turn, receive qualified sales leads from interested parties. Check here for the latest in CRM information.

Susan J. Campbell is a contributing editor for TMC (News - Alert) and has also written for eastbiz.com. To see more of her articles, please visit Susan J. Campbell’s columnist page.

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