CCID Consulting Provides a Review and Forecast of China's IPTV Market

Monday, January 5th, 2009

IPTV Needs to Explore a Favorable Development Road

BEIJING — CCID Consulting, China’s leading research, consulting and IT outsourcing service provider, and the first Chinese consulting firm listed in Hong Kong (Hong Kong Stock Exchange: HK08235), recently released its article on China’s IPTV market.

In 2008, with China Telecom’s vigorous promotion, China’s number of IPTV subscribers grew rapidly, up 100% year-on-year. The rapid growth drove the development of IPTV’s equipment market, and with the promotion of free and bundling marketing, subscribers in Shanghai, Zhejiang, Fujian and Guangdong have taken shape. However, telecom operators have found it difficult to gain profit in IPTV. In 2009, because of global financial crisis, telecom operators’ capital and resource investment in IPTV promotion will meet tests. How to guarantee the IPTV market’s sustainable development has become the whole of the industrial focus for IPTV.

Policy environment is expected to greet further breakthroughs

In Jan. 2008, the Chinese government released policy to encourage digital TV industrial development. However, because of the lack of subsequent detail decrees, measures and bylaws, this policy has not made any great effect on recent IPTV development.

In 2009, the convergence of three networks will be maturing. This network convergence will create favorable development opportunities, realize stable development for the three networks, and solve standardization and market access. The related detail policies will be released and the policy environment is expected to greet further breakthroughs.

Market operations transfer from extensive to refined marketing

In 2008, China Telecom’s efforts in IPTV drove all of IPTV’s market growth. Because of Shanghai Telecom’s free promotion, its number of subscribers saw rapid growth. By the end of 2008, the number of IPTV subscribers reached 700,000. Zhejiang, Fujian, Jiangsu and Guangdong have similar promotion modes as Shanghai Telecom. Telecom operators’ promotions stay at the free and low price promotion stage. User consumption behavior and habits acquired by researches will be helpful to telecom operators in understanding users’ requirements and expectations in order to carry out different marketing. IPTV will enter an era of refined marketing.

Business presents further differential advantage

In 2008, Olympic opportunities provided a display platform for IPTV development. User recognition of IPTV services was improved. In 2009, the continued increase in subscribers will attract more content and service providers to enter the IPTV field. Based on IPTV’s particular order program and replay functions, they develop typical music, movie, game and public services. The competition between IPTV and DTV will focus on differences in product content and functions.

Industry application tends to in-depth development

China’s IPTV subscriber number hasn’t realized blow-out growth in the short-term. Equipment manufacturers will strengthen their investment in IPTV system equipment R&D. Based on IPTV’s business functions, they will develop more application functions for industrial users, such as UTStarcom, ZTE and Huawei. UTStarcom will transfer its attentions to the video monitor market. ZTE will launch a network video system, which integrates video monitoring, conference TV living broadcasting, video communications and advertising, and provides sufficient services for family users, SMEs and industry clients. ZTE provides video monitoring for enterprise users in Jiangsu. In 2009, IPTV’s industrial applications will expand their scope. IPTV industrial applications should be considered as breakthroughs, accelerating regional layout so as to drive the local public user market’s growth.