Despite optimistic forecasts of worldwide IPTV uptake, given the high investment costs, most telcos would rather avoid the IPTV trail. It's just that in most markets, they have no choice
In trying to parlay current IPTV trials, pilots and small-scale networks into major money-spinning businesses, though, this would-be new breed of content distributor faces formidable challenges on the technology and commercial fronts. Meanwhile, the resident TV market champions - the free-to-air, the cable operators and the DBS companies - aren't sitting on their hands as the telecoms industry begins to circle their birthright source of revenue. What's odd, though, is the feeling that many telcos would probably rather not be heading off down the IPTV trail at all: it's just that they have no choice.
World at their feet‾
IPTV in its various forms is currently occupying the thoughts, if not necessarily the affections, of senior telco and broadband service provider managements across the globe, from Italy to Iceland, and from Canada to China. A number are already reasonably far down the IPTV learning curve and, unsurprisingly, tend to loudly sing the praises of their investments. One such is Belgacom, which says it signed up 50,000 viewers in the space of 12 months.
'For tele-viewers, Belgacom TV is a genuine revolution,' claims Jean-Charles De Keyser, Belgacom TV manager. 'With today's television, you can watch what you want, when you want and for the right price, whereas before, the station imposed the schedule. In addition to offering more channels than its competitors, Belgacom TV allows customers to watch movies and programs on demand - the can still watch television like they did before, but they can also program 'their own' television by choosing from a large catalogue of content.'
Compare that with Hong Kong's City Telecom, which launched its IPTV service via its Ethernet broadband unit, Hong Kong Broadband Network in August 2003. City Telecom chair and co-founder Ricky Wong said at last month's IPTV World Forum Asia conference in Shanghai that competitive pressure forced him to get into IPTV.
'I launched IPTV because I had no choice,' Wong says. '[Incumbent telco] PCCW launched it and [competitive telco] Hutchison Global Communications launched their service, so I have to pretend to be a serious long-term player to my consumers. If not for that, I wouldn't have bothered with IPTV.'
Wong warned service providers that had not yet ventured into IPTV that it's a very difficult business to crack. 'Telecoms is a pretty straightforward business, but with IPTV you have to acquire content, which is very complicated and costly, depending on the relationship you have with each content provider.'
That said, Wong wasn't rubbishing IPTV itself so much as IPTV that follows the cable-TV model.