The number of IPTV subscribers in the APEJ region is expected to increase from 1.2 million subscribers in 2005 to a monumental 29.7 million subscribers in 2010 at an impressive compound annual growth rate (CAGR) of 89%, according to IDC’s latest report, "Asia/Pacific excluding Japan (APEJ) IPTV Market 2006-2010 Forecast and Analysis".

IPTV continued to enjoy growth in the APEJ region in 2005. For the second year in a row, PCCW's NOW Broadband TV remained the most successful deployment of an IPTV service in the APEJ region, exhibiting how this interactive TV service, delivered over a private broadband network, has helped transform the pay TV industry.

"Triple play offerings, that include bundling of voice, video, and data services, have shown multiple benefits. IPTV has not only added value to the broadband pipe but also enabled service providers to reduce churn rate of basic broadband access, while adding additional revenue streams," said Claudio Checchia, Research Manager, Asia/Pacific Consumer Research at IDC. "However, in spite of the successful deployment of IPTV in the Hong Kong market, market conditions for IPTV across majority of the APEJ markets are far from uniform."

Growth opportunities for IPTV remain promising across APEJ throughout the forecast period. IPTV can represent a golden opportunity for telecommunication carriers looking to tap into new revenue streams beyond data and voice services. With the necessary broadband infrastructure in place and availability of new video compression technology, carriers have the opportunity to broadcast live TV signals to a television set or a PC via private broadband networks. The increase in broadband penetration signals a vast potential subscriber market for IPTV in the APEJ region. IDC expects the number of residential broadband subscribers in APEJ to keep growing at a rapid pace, increasing from just over 54 million in 2005 to 106.1 million subscribers by 2010 at a CAGR of 14%.

However, the journey of IPTV market in APEJ is not without its challenges. A host of factors including government commitment, content acquisition, business model adoption, price packaging, maturity of the pay TV market, broadband penetration, and type of broadband technology adopted to deliver IPTV will affect the pace of growth. The complex regulatory framework imposed on telecommunication operators, rolling out IPTV services, might pose a major obstacle to successful deployment of IPTV in these markets.

With a penetration rate around 55% of all households in Hong Kong, the local pay TV market in Hong Kong has not been as saturated as in other Asian APEJ markets. With among the highest broadband penetration rates in the world, around 69% of all the households at the end of 2005, Hong Kong has proved to be an extremely competitive market, where broadband service providers have had to differentiate themselves from competitors by rolling out more services to their subscribers. In this scenario, IPTV has been very well received by Hong Kong residents, thanks to its focus on an a la carte menu, Chinese-language content, competitive pricing, and bundling with data and voice services. Hong Kong remained the single largest market in terms of IPTV subscribers with a 55.8% share in APEJ at the end of 2005. The PRC quickly established itself as the second-largest IPTV market followed by Taiwan in the APEJ region in 2005. The PRC, India, and Korea are expected to show the highest CAGR of 139%, 122% and 149% respectively in the number of IPTV subscribers from 2005 to 2010.

Singapore enjoys one of the highest residential broadband penetration rates in the region at 44.7% at the end of 2005. IPTV is a new phenomenon in the Singapore market with limited uptake in 2005. As more operators are expected to roll out IPTV services in Singapore, IDC forecasts the number of IPTV subscribers in Singapore to grow from about 40,000 in 2005 to 218,000 by 2010 at a CAGR of 39%.