IPTV's 'hybrid' future for Asia
For Asia's emerging markets which have insufficient broadband capacity to carry IPTV (Internet protocol television), a "hybrid" offering may be the entry point for operators, according to a Tandberg executive.
Noel Matthews, vice president of business development at Tandberg Television, said for operators in the "less-advanced" countries in the region, employing a combination of broadcast technology for the video stream with interactivity laid over via IP will be a more viable method of carrying interactive TV to their markets.
Matthews explained that typically, these countries do not have the sufficient connectivity infrastructure to support streaming video over IP. IPTV is positioned as TV that carries interactive functions that lets the user have two-way communication for messaging or games features, he said in an interview with ZDNet Asia.
In contrast, other mobile TV technologies such as DVB-H (Digital Video Broadcast-Handheld) are broadcast-only, meaning they provide a one-way exchange of information from operator to viewer, much like traditional TV.
Rather than compete with DVB-H, mobile operators in emerging markets can rely on the technology to stream video, saving the IP network for IPTV's interactive features.
Potential hindered by regulatory barriers
Matthews pointed out that IPTV deployment has taken off in countries where regulation has supported it. Highlighting South Korea as an example of such success, he said: "Legislation in Korea opened up the market." Korea began IPTV trials in 2006.
Adrian Drozd, senior analyst at Canalys agreed. "The Asia-Pacific region offers huge potential, but the regulatory environment is restricting development," he said in an e-mail to ZDNet Asia.
"The IPTV markets in China, Japan and South Korea are heavily constrained, but we’re starting to see some strong progress in China," added Drozd, saying subscriber numbers in the country hit in excess of 2 million by the end of the third quarter this year.
Gartner appears less optimistic about the emerging markets in the region. The analyst company said in a recent report: "Except for the developed countries [in the Asia-Pacific region], limited broadband penetration and regulation will hinder the growth of IPTV penetration well into the next decade."
Gartner expects IPTV growth in Asia to be concentrated in "the developed North Asian markets" of Japan, Taiwan, South Korea and China.
Additionally, Hong Kong, as the world's most penetrated IPTV market at more than 40 percent will start to see tapering growth, said Gartner. IPTV in Singapore will also grow steadily "but from a very small base".
Drozd said the emerging markets presented barriers with ARPUs (average revenues per user). "Consumer spending power is also an issue in some markets; keeping subscription fees low, while realizing a return on infrastructure and content investment can be difficult [for operators]," he said.
Nonetheless, with the growth in Asia, Gartner expects the region to catch up with Western Europe--currently the largest IPTV subscriber base--in 2012, with both regions hitting 18.8 million subscribers each.