IPTV services forecast to serve 102 million by 2014

SAN JOSE, Calif. -- The number of IPTV subscribers is expected to grow at a 25 percent compound rate to hit 102 million people in 2014, generating $46 billion in services revenue, according to a new report from Multimedia Research Group, Inc.

More than 800 carriers are currently offering IPTV services to about 40 million subscribers worldwide, generating about $17 billion in revenues today, according to the report. Carriers spending on capital equipment for IPTV will rise from $3.1 billion in 2010 to 5.1 billion in 2014, it said.

In their core networks, carriers are using a mix of fiber optics in highly competitive markets and advanced DSL such as channel bonding and VDSL2 in less competitive markets, the report said. However, speculation is growing that in the U.S. IPTV provider Verizon will switch from using QAM to an all-fiber architecture after 2010, it said.

"For many IPTV operators, set-top boxes make up more than 70 percent of the capex expenditures," said Jose Alvear, IPTV analyst who wrote the report, speaking in a press release.

Europe and North America will reap the lion's share of IPTV revenues, although lower cost services in China and India are experiencing the fastest growth rates, the report said.

By 2014, Europe will have 45 percent of the global IPTV market, Asia will be second at 31 percent, North America will follow at 19 percent and about five percent will be split among other regions.

In North America, Verizon and AT&T each added about 1 million subscribers in 2009. By 2014 as many as 23 carriers, mostly in Asia and Europe, will have exceeded the million-subscriber mark.

Eastern Europe is shaping up as one of the emerge markets to watch, according to the report.

"As late as 2007, Eastern Europe had only a few IPTV trials or startups, but now there are 16 operational services and another three to six in trials," said Alvear. "These operators continue to grow their service base because they have much greater technical and creative control over their service than their cable-TV competition," he said.