Service providers around the globe see triple play services not merely as a means of increasing top-line revenue, but as a means of self-preservation, says a new study by Infonetics Research. Network operators are redefining and realigning themselves to be the one-stop shop for all things digital for residential and enterprise subscribers, and they believe triple play services will give them the competitive edge they need to succeed.

Take as evidence the fact that North American, European, and Asia Pacific service providers participating in the study (Service Provider Plans for IP Triple Play) report that on average nearly 40% of their capital expenditures were spent on triple play network equipment in 2005.

The majority of service providers in the study plan to further increase capex spending in the next 12 months on IPTV equipment, broadband CPE, broadband aggregation equipment, and voice over broadband equipment, and they expect revenue growth in all areas of triple play services in the next 12 months.

And a big chunk of revenue it is: The average percent of total company revenue from triple play services ranges from 43% to 48% between 2005 and 2007. (Infonetics interviewed a mix of large incumbent providers and smaller, more focused providers; for the large providers triple play revenue represents a much lower percentage of total revenue.)

"With nearly 40% of their capex budgets going to triple play service infrastructure, service providers are sending a clear message that the combination of voice, data, and video services is a long-term differentiator for them," said Jeff Heynen, directing analyst at Infonetics Research. "Carriers are demanding complete interoperability, full standards compliance, and an open and flexible architecture from their suppliers to ensure the content and services they provide will work right out of the box and far into the future."

IP voice is a big draw for triple play providers, but it's video that's really the newest, most exciting, and most technically challenging part of triple play services, and IPTV is where all the action is. In fact, all but one of Infonetics' service provider respondents already offer IPTV, and that one offers it by 2007.

Sample Findings

• The top 2 drivers for respondent service providers deploying triple play services are 1) increased broadband revenue per user and 2) new revenue streams
• 58% of respondent service providers rate vendor interoperability a key technical challenge when rolling out triple play services
• The most pressing business challenge triple play service providers face is securing broadcast and on-demand video content; acquiring content is also a challenge
• iTV (interactive TV) is the fastest growing video service offered by service providers, bringing Internet capabilities directly to the TV screen, including instant messaging, shop at home, click to call and click to purchase capabilities, and, most significantly, online gaming services.
• 2/3 will deploy IP/Ethernet DSLAMs by 2007
• 67% rate low cost very important when considering IP set top box features
• Though more respondents currently use Cisco for their triple play aggregation, when it comes to unaided brand awareness for triple play infrastructure providers, Alcatel leads Cisco, and Microsoft is third

Infonetics' triple play study examines the trends, drivers, barriers, strategies, and implementation plans of North American, European, and Asian services providers offering triple play services, and includes their product expenditures, preferred manufacturers and products, services offered, technology choices, and more. Infonetics also offers an IPTV Equipment forecast, including subscriber, revenue, and capex projections through 2009.

Download sample data at www.info.infonetics.com. For sales, contact Larry Howard, vice president, at larry@infonetics.com or +1 (408) 583-3335.