Despite the buzz surrounding IPTV across the region, the technology is expected to take hold in selected markets where the conditions make it an attractive proposition.
According to IDC, IPTV subscribers in the Asia-Pacific region, excluding Japan, is expected to increase at a compound annual growth rate of 89 percent, from 1.2 million in 2005 to nearly 30 million by 2010. This growth, however, will not be uniform across all markets.
Claudio Checchia, research manager for consumer research at IDC Asia-Pacific, told ZDNet Asia in a phone interview that he doesn’t see widespread adoption of IPTV across the Asia-Pacific region. For now, much of the IPTV activity will largely happen in China, Hong Kong and Taiwan, he said.
China, in particular, holds immense potential as it has the largest broadband subscriber base in the Asia-Pacific region. Residential subscribers constitute about 70 percent of China’s 47.8 million broadband subscribers, according to latest figures from market research company Frost & Sullivan.
China together with Hong Kong, which is said to be one of the most sophisticated IPTV markets in the world, are expected to account for nearly 60 percent of the region’s IPTV revenues by the end of 2013.
Checchia attributed China’s strong market potential to its huge population and the upcoming Beijing Olympics in 2008.
The Chinese government is riding on the global sporting event to promote broadband penetration and applications including IPTV, he said. The government’s target is for each family in Beijing and nearby regions to have broadband access before 2008.
Meanwhile, IPTV is already off to a promising start in China. Just last week, China Telecom awarded a contract to U.S. IPTV equipment maker UTStarcom to deploy a new commercial IPTV network in the Shanxi province.
The new service will support some 30,000 subscribers, and cover major metropolitan areas of Xian, the capital city of Shanxi. The service is expected to offer up to 80 channels of live, broadcast television, 24-hour time-shifting capability, about 10,000 hours of video-on-demand (VOD) content and valued-added services including karaoke and gaming.
Over in Hong Kong, Checchia said, PCCW has already been highly successful with its IPTV services, thanks to unique market conditions in the Chinese territory. He added that PCCW might soon become the only pay TV operator in Hong Kong, “because the cable operators are struggling, and are losing a lot of content rights to PCCW.”
According to PCCW, the number of subscribers for its ‘now TV’ IPTV service was 700,000 as at December 2006, representing over 30 percent of homes in Hong Kong. The service was launched in August 2003.
IPTV service providers that are looking to emulate PCCW’s success in other parts of Asia, Checchia said, will have to address some issues not experienced in Hong Kong. For example, the low take-up of high-speed broadband services above 10Mbps, which is necessary for IPTV services to function optimally.
“Although many broadband service providers are looking up to PCCW, the reality is that Hong Kong is a special case, because it’s a very open market with high-speed broadband penetration,” Checchia said.
“There is nothing worse than watching TV and looking at frozen images, or having to reboot the set-top box,” he added, referring to the issues caused by viewing IPTV programs with insufficient broadband bandwidth, especially when the same connection is shared with family members.