Europe's IPTV Growth is Strong, But Operators Face ARPU Challenges

The hyper-competitive nature of the European digital television market challenges operators to develop value-added services, digital lifestyle differentiators, and drive revenue growth

Although IPTV subscriptions in Europe are expected to grow five-fold by 2011 – to more than 25 million – a new study from Parks Associates finds that operators are ARPU-challenged and facing strong competition. IPTV in Europe: Digital Television in a Hyper-competitive Market – finds that telephone operators are facing growing competition from not only cable, satellite and digital terrestrial services, but their own telco brethren (other national incumbents and competitive players) that are taking advantage of local loop unbundling regulations.

“Europe is certainly a laboratory in real market time of how competition among service providers is constantly forcing operators to constantly evaluate their entire broadband and bundled services strategies,” said Kurt Scherf, Parks Associates’ vice president and principal analyst. “Given the need to differentiate their services and add real value back to their companies, the European IPTV landscape is characterized by a careful balance between competitive pricing and value-added features.”

Scherf said that Europe provides an example of what North America may experience given the entry of major telcos into the multichannel video space. He points to such applications as managed home networks, an emphasis on converged communications applications, and a rise in interactive television as three key areas of interest to watch in not only Europe but the rest of the world.

IPTV in Europe: Digital Television in a Hyper-competitive Market provides an overview and analysis of the current and expected state of digital television services in Europe, with a specific focus on telephone provider-delivered multichannel video offerings. It provides an overview of the competitive nature of the European market, insight into the major challenges facing European telcos, and market growth projections. It is available as a free download from the Parks Associates’ Web site.