Telcos' IPTV Subscribers Will Barely Surpass 2 Million By 2009

Forrester research released a report that offers a less ambitious viewpoint on IPTV in the coming years. The report states that telephone companies have a difficult migration ahead of them and it‘s going to cost a lot to catch up to cable companies. Despite all the recent excitement, Maribel Lopez writes "it is a long road from today's flashy Consumer Electronics Show (CES) demos to mass adoption of telco IPTV."

SBC has plans of laying a fiber-to-the-promises network later this year. Verizon has already begun to lay their FiOS network and build data centers to support it. The report notes that it will be much more difficult to offer IPTV than simply laying a better infrastructure. "Listening to telco pitches, you would think that it was simply a matter of flipping a switch to deliver TV to any consumer anywhere," writes Maribel Lopez. "But before telcos can launch a widespread TV offering, they must replace part of the copper plant with fiber, update the billing and provisioning system to support video, and bulletproof the equipment that will go into the home."

Our take: While it will be a long road before telcos’ IPTV offerings are as bulletproof as cable is now, we have seen very promising momentum made by Verizon in securing relationships with media partners and building out a network to support media delivery. SBC may have been the first to announce their ambitions for an IPTV offering, but Verizon is on the fast track to actually bringing it to life.

Telcos' IPTV Reality Check Executive Summary
Telcos have jumped on the TV bandwagon, but it won't be an easy ride. Entering the market means spending billions in network upgrades, rolling out services with unproven IPTV platforms, and navigating the difficult content acquisition process. IPTV promises great content selection, more interactivity, and enhanced TV features, such as faster channel changing. But given telcos' lame track record with selling new services like DSL, we expect their TV efforts to get off to a slow start. With limited consumer interest in triple play and difficulty in creating product differentiation, telcos will remove profit from the TV services market as they launch price wars to grab consumers.

Table of Contents

• 2005: The Return Of Telco TV — This Time They Mean Business
• Telcos Promise A Better Experience With IPTV
• Telco TV Is Still More Of A Dream Than A Reality
• Telco TV Makes A Minor Dent In Subscriber Numbers But A Major Dent In Revenue

You can purchase the entire 11 page report here.