European telecoms operators must develop strategies tailored to local markets if IPTV - television over broadband - is to be a revenue earner rather than simply a product differentiator, according to Telco TV: European market opportunities and operator strategies, a new report from Analysys, the global advisers on telecoms, IT and media.

"IPTV services clearly offer significant potential for operators to offset the impact of declining voice revenues and falling broadband prices," says the report's author, Dr Windsor Holden. "However, the European broadcasting and telecoms marketplace is a far more disparate and complex arena than that of the USA, from which much of the clamour for IPTV services has emanated. There are profound national differences in pay-TV and multi-channel adoption, in broadband take-up and digitalisation and in the range of competing platforms. It is therefore essential for operators to develop local strategies that reflect these conditions if they are to acquire a critical mass of subscribers."

While IPTV faces competition from pay-TV platforms and from free-to-air digital terrestrial television offerings, the author points out that there will be opportunities for telcos to exploit even in markets where pay-TV adoption is near saturation.

"In many markets, high pay-TV penetration is primarily dependent upon analogue cable networks and widespread adoption of digital TV has been deterred by a high price differential between analogue and digital services. This leaves a gap in the market for any operator wishing to offer a high-end pay-TV service including video-on-demand and pay-per-view."

The report does suggest, however, that in some instances partnership with an existing TV platform operator may be more fruitful than competition. "If a would-be IPTV provider is faced with an environment in which both premium and basic multi-channel TV platforms are well established, then clearly it makes sense to consider partnership," says Holden.

The report examines the local factors that determine the size of the opportunity for telco TV, including existing multi-channel services, broadband adoption and regulatory issues, and outlines strategies to be employed across a range of broadcasting environments.

For more information, telephone Analysys on +44 (0) 1223 460600 or email research@analysys.com.