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Home > Communications > Public Switching > Broadband
IPTV in Latin America Faces Obstacle
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| Published Date:
November 2006
Published By:
Yankee Group
Page Count:
4
Order Code:
R388-2309
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Will IPTV Increase Fixed-Line Revenue?
Wireline operators in Latin America are trying to avoid the anticipated revenue decline for fixed-line voice services. Yankee Group forecasts a loss of nearly 4% ($28 million to $27 million) of revenue from 2005 to 2010 (see Exhibit 1). During the same period, broadband and TV revenue will experience solid growth: 110% for broadband (from more than $3 billion in 2005 to nearly $7 billion in 2010) and 37% for analog and digital TV (from $6 billion in 2005 to $8 billion in 2010).
The launch of broadband service was the first step toward finding new sources of revenue. Broadband penetration achieved impressive growth in the last 3 or 4 years and will continue to grow during the next 5 years.
The challenge facing fixed operators now is to optimize the revenue coming from broadband, rather than using it merely as an access point. Broadband presents an opportunity for a new way of doing business with end customers. With this in mind, fixed operators are evaluating the opportunity to enter the television market. Because they already have well-developed networks for fixed-line services (including DSL), fixed operators are considering IPTV as a viable way to offer new services to their end customers and increase revenue from their customer base. Internationally, operators such as Deutsche Telekom, Telekom Austria, France Telecom (in Europe), Telefónica (in Europe and Latin America) and Telefónica del Sur (known as Telsur, based in Chile) are implementing IPTV in their fixed-line concession areas.
There are opportunities for growth in Latin America, but regulation and strong competition are two serious challenges facing operators that plan to offer IPTV in the region. The only country that is currently favorable for IPTV from a regulatory point of view is Chile. Other countries such as Brazil, Argentina and Mexico impose tough conditions on fixed-line operators entering the TV business. Despite the barriers, wireline operators are starting to invest in the technology in an effort to turn these challenges into opportunities.
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