Analyst: IPTV faces infrastructure hurdles in China

Infrastructure limitations for IP TV must be overcome before services can be rolled out, an analyst at In-Stat China said Tuesday.

IP TV services are expected to be popular in China, with initial demand spurred by interest in the 2008 Summer Olympic Games to be held in Beijing, according to Jason Yin, managing director of In-Stat China.

By 2010, China will have 18.2 million IP TV subscribers, Yin said in an interview. “The market will grow slowly, not rapidly,” he said.

The push to develop IP TV services in China is largely coming from two sides: telecom operators and cable TV providers, Yin said. The telecom operators see IP TV as an opportunity to develop a new source of revenue, while cable TV providers see the technology as key to defending their turf from new competitors, he said.

Equipment makers also are eager to see IP TV services rolled out in China, Yin said. In-Stat forecast that revenue from IPTV set-top boxes will grow at a compound annual growth rate of 144% between 2005 and 2010, generating $435 million in yearly revenue by that time.

China has about 54 million broadband Internet users, but most of these connections are too slow for IP TV services, Yin said. That means operators will have to invest in new equipment. The same holds true for cable providers, which have begun upgrading their networks with the bidirectional cables required for interactive services, he said.

China Telecom, one of the country’s two major fixed-line service providers, last month announced plans to upgrade its asymmetric DSL (ADSL) network. The company plans to install equipment based on ADSL2+, a more advanced technology that offers connection speeds up to 25Mbps.

China Netcom, the country’s other main fixed-line operator, has yet to begin a significant network upgrade for IPTV, Yin said.