Experts predict a weak economic atmosphere through 2010. With this in mind, Frost & Sullivan revised the previous year’s growth forecast of a 3-year CAGR 29 per cent downwards to less than 15 per cent.

“A disappointing IPTV performance is not the end of the road for Telecom incumbents but it has spurred new service creation and more innovative business models across the value chain. As end user media consumption patterns change, both telcos and broadcasters face a window of opportunity to invest and/or collaborate to meet the evolving user demand,” states Yiru Zhong, an analyst for Frost & Sullivan’s Information & Communication Technologies group.

Once operators and media providers are able to deliver and customise the video content to end users’ expectations, the TV revenue potential could add between 15-22 per cent of telecom operators’ retail revenue in the top 5 Western European markets. In the UK alone, it is expected that TV revenues could grow at an 8 per cent 5-year CAGR, which is a more robust rate than both the fixed and mobile communications sectors. However, the current lack of momentum is not sufficient to rejuvenate overall revenue growth in telecommunication services yet. Operators will need to continue to improve QoS, extend coverage and distribution, form more alliances and create more innovative services.

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