IPTV is booming

IPTV subscribers up 179 percent

Millions of broadband users across the world are finding IPTV hard to resist, with customer numbers rising
from 2,950,000 to 8,229,000 in the 12 months leading to June 2007. That is the finding of the DSL Forum, a lobby group for DSL broadband technology, based on new research commissioned from consultancy Point Topic.

Most of the growth came from Europe, where the number of IPTV customers soared to 4,984,000 from 1,505,000 a year earlier. In the Americas, 660,000 broadband customers signed up to IPTV services, giving the region a total of 1,069,000 users, while the Asia Pacific added 1,189,000 customers to give it 2,176,000 subscribers.

"Cable always had a head start on us. We’ve been whittling that down and getting closer to parity." Robin Mersh

“We’re very excited about these figures,” says Laurie Gonzalez, marketing director for the DSL Forum. “Even a year ago people were asking whether IPTV would be a compelling application. Today more than eight million customers are using it in every region of the world. It’s gone far beyond testing to real rollout.”

DSL “more than enough”

Although impressive, growth has come from a low base and still leaves IPTV trailing other pay-TV platforms. BSkyB, a satellite operator, has around eight million pay-TV customers in the UK alone.

Nor is it clear how many IPTV customers are using DSL technology, which has been criticized by some operators as too slow for such bandwidth-hungry services. IPTV pioneers like France Telecom and Hong Kong’s PCCW — which together account for around 1.5 million users — have built expensive fiber-to-the-home (FTTH) networks to support their IPTV offers.

DSL Forum COO Robin Mersh rejects the attack. “Everyone says we need more bandwidth but the industry is getting better at using what’s out there to provide services,” he says. “I think 24Mbps is more than enough.”

ADSL2+ technology, an advanced version of DSL, is theoretically capable of providing 24Mbps, although actual speeds can depend on the distance between a customer’s home and the local telephone exchange.

In the UK, incumbent operator BT is rolling out ADSL2+ to support its BT Vision IPTV service, although most channels are currently delivered using digital broadcast technology. The service had attracted around 20,000 subscribers by June 2007.

Mersh is also encouraged by the performance of operators using fiber in combination with DSL to deliver IPTV. In the U.S., AT&T has attracted more than 100,000 customers to its U- verse IPTV offer using this type of network, and it claims to have signed up half of these since the end of July.

DSL slowdown

Nevertheless, Gonzalez concedes there has been a slowdown in DSL growth in some developed markets over the past year. “There has been a shift by telcos to fiber,” she says. “In the U.S., the number of fiber customers grew by 107 percent last year, while the number of DSL customers grew by 19 percent.”

Latest figures from Point Topic show DSL has a 66 percent share of the broadband access pie in terms of customer numbers, with 200 million users. Fiber has an 11 percent share, while cable claims 22 percent of the market.

Despite fiber incursions in the U.S., Mersh expects the DSL share to increase slightly in the future at the expense of cable. “Cable always had a head start on us,” he says. “We’ve been whittling that down and getting closer to parity.”

In terms of DSL customers, China leads the pack with 44,757,000. The Chinese government has launched an initiative to make broadband services available to 100 million people in the next few years, says Mersh.

The U.S. is second in line, with 27,615,996 DSL customers, while Germany is in third place with 16,893,700.