[photopress:shuihi3.jpg,full,alignright]China’s fixed-line carriers are looking to IPTV to grow revenues as voice revenues decline, but lack of local content may prove the bottleneck to widespread uptake. This is going to create some problems.
First, get straight what we are talking about. IPTV (stands for Internet Protocol Television) is a way to let you get television over broadband Internet. But, and this is desperately important, there is only so much television programming around, recycling very very old television series is not the way to go.
The problem is it is going to happen very quickly. Huang Dabin, vice president of the network division of China’s No. 2 telecoms equipment maker ZTE Corp said, ‘IPTV could get a head start next year in China.’
However, note carefully that this only works with seriously broadband connections and so it will be major cities first. Shanghai probably first, Beijing second.
Huang Dabin, in an interview with China Daily on the sidelines of the recent ITU Telecom World 2006 in Hong Kong, predicted the number of IPTV subscribers in China could exceed 1 million next year, skyrocketing from the current 100,000 subscribers.
Fixed-line operators China Telecom and China Netcom have been aggressively building trial IPTV networks since last year. This year, some commercial IPTV services have been operational in cities such as Shanghai.
China Telecom and China Netcom have been coping with a slowdown in their fixed-line voice businesses. The two firms have been lobbying the government for a licence to enter the lucrative mobile phone sector.
The government has been denying the licenses, forcing the two fixed-line operators to promote Xiaolingtong, or PHS (personal handyphone system) which has precisely no chance of being a serious player. It has been tried before in other countries and got absolutely nowhere.
According to the Ministry of Information Industry (MII) as of October, China had 93.4 million PHS users, compared to 85.3 million at the end of last year. This is not an encouraging trend.
China had 370 million fixed-line telephone subscribers and 449 million mobile phone subscribers as of October and perhaps 49.8 million broadband Internet users, depending always how you define broadband.
Intense competition from mainland mobile operators is forcing China Telecom and China Netcom to find new services and value-added offerings to its customers. Ying Wu, CEO, of UTStarcom, said, ‘I believe one of the fixed operators may even see revenues decline in Q4 this year. IPTV is the obvious target, but the biggest challenge for the operators is finding enough content. Lack of local content is the major roadblock, but it’s strictly controlled by media authorities and the government.’
He added that overseas content is restricted and very difficult to get approval for.
Wu noted that UTStarcom is currently working with the government and media authorities to create more cooperation between telecom operators and media companies to generate more content and make it more available to prospective IPTV carriers.
The US-headquartered IP networking provider is the current supplier of IPTV systems to China’s only two licensed IPTV operations in Harbin and Shanghai.
Operated by China Telecom Shanghai and the Shanghai media group, the Harbin and Shanghai operations have around 90,000 users and 40,000 users respectively. Harbin began signing up customers at the end of 2005 and aims to reach 100,000 by the end of 2006.
Shanghai started two months ago and Wu expects uptake to be initially slow as the city’s networks are still in need of upgrading.
Market research firm In-Stat predicts that China’s IPTV subscribers will grow to about 4.5 million IPTV users by 2008. Many industry observers expect 2007 and 2008 as growth years for IPTV as the industry gears up for the Beijing Olympic Games.
Source: Various plus research
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