New findings from IMS Research's Global Bandwidth Utilization Model reveal that the telcos who are IPTV providers face substantial challenges adapting their networks to accommodate the onslaught of over-the-top video. IMS Research estimates that in 2010 peak bandwidth utilization was 44 percent of capacity, and that the bandwidth usage per household is forecast to increase by more than 50 percent between 2010 and 2015.

IMS Research also forecasts that pay OTT subscription services will generate a cumulative $32 billion in revenues globally over the next five years, and will account for a larger part of the market than pay-per services that enable users to rent or purchase videos on an ad-hoc basis. But even so, many telcos are threatened with a bandwidth shortage.

“What we have now is a situation where the telcos are actively seeking solutions to optimize bandwidth,” adds analyst John Kendall. “OTT is here to stay, and the telcos have accepted that.”

Findings from Kendall’s recent report on the IPTV world market indicate that 75 percent of IPTV households receive their television over an ADSL connection. Future proofing with fiber-to-the-home infrastructure is prohibitively expensive and very time intensive. In the meantime, telcos are seeking cost effective solutions to maximize their legacy infrastructure. Reducing crosstalk across copper bonded pairs using the ITU-T G.vector standard (G.993.5), introducing software solutions to maximize network logistics, and using caching in the network are all solutions that are occurring right now, as telcos position themselves to meet the rapidly growing consumer OTT demand. Even further, many operators are looking at deploying local content delivery networks to keep their traffic local, reducing costs of bandwidth transit.

"In countries like France, where IPTV has been a great success, ADSL can be leveraged effectively due to shorter loop lines,” Kendall adds. “In France in 2010, peak potential bandwidth demand sat at just over 37 percent of network capacity. However, by 2015, that number will jump to nearly 60 percent, mainly due OTT and multiscreen video. In a country with pronounced OTT content demand like the United States, average data usage by an IPTV household will rise to nearly 25Mbps in 2015, up from the current 19Mbps. While the increase may not seem significant, IPTV households are expected to double, creating a need to address possible congestion issues.”

But IMS Research warns that bandwidth congestion challenges are more pronounced in countries with lower broadband penetration and correspondingly longer loop lines. The research firm expects Eastern European and Latin American DSL providers to struggle acutely with video-generated congestion issues.