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Summary

Ovum’s telco TV forecasts anticipate continued steady growth in the take-up of pay-TV services delivered by telecoms operators across most regions between 2014 and 2019. Although IPTV is the dominant telco infrastructure technology, operators are employing a variety of platforms and delivery models to cement their presence in what is essentially a noncore business area for them.

Telcos serve one-fifth of the world’s pay-TV customers

After a slow start during the first decade of the millennium, telcos have gradually started to build their presence as latecomers to the pay-TV marketplace. Ovum’s new forecast predicts that by 2019 telcos will serve 22% of total pay-TV subscribers, representing a twofold market share growth since 2010. From 2014 adoption will increase at a CAGR of 7% globally (compared to 3% for the overall pay-TV market) to reach 247 million subscriptions. However, telco TV market share will vary widely across country markets and geographic regions, ranging from just 3% in Italy to 67% in France, or from 7% in the Middle East and Africa to 31% in Europe by the end of the forecast period.

Although IPTV will continue to underpin most telco TV operations, traditional platforms (cable, satellite, and terrestrial) will also hold a significant – albeit diminishing – share of total subscriptions. This trend could be shaken up by AT&T’s proposed acquisition of DirecTV, adding significantly to the overall telco direct-to-home (DTH) base. The DTH base continues to grow steadily in Latin America, one region where IPTV has struggled to make an impression on the TV landscape, largely due to regulatory constraints on the provision of broadcast services over telco infrastructure. As a result, telcos have built market share by acquiring existing third-party cable and satellite operations. So although telcos will occupy a third of the region’s pay-TV subscriber market by 2019, more than a quarter of these subscribers will be served by non-IPTV networks. Over time, however, distinctions between TV platforms will blur as cable infrastructures migrate toward IP and as more operators adopt hybrid distribution strategies, combining VoD over IPTV with DTH broadcast, and others explore OTT variants such as those currently pursued by telcos in Australia, Italy, and the UK.

Appendix

Further reading

Telco TV Benchmark: 1H14, TE0003-000815 (January 2015)

Telco TV Forecasts: 2014–19, TE0003-000823 (January 2015)

Author

Jonathan Doran, Principal Analyst, Consumer Services

jonathan.doran@ovum.com

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