IPTV to become premium pay-TV platform in LatAm by 2014
The Latin American pay-TV market will experience a compound annual growth rate (CAGR) of almost 11% between 2009 and 2014, according to a new series of reports from Signals Telecom Consulting, with IPTV predicted to become the region's premium pay-TV platform, focusing on high purchasing power customers and vertical market segments.
The reports highlight the fact that erosion of the landline market has driven Latin American operators to adopt aggressive measures to diversify revenue and retain customers. The inclusion of pay-TV services in multiple service bundles is intended to secure the loyalty of long-standing telecoms service users for telephony, and in particular for broadband access, according to Signals Telecom Consulting.
“Growth strategies in the pay-TV segment implemented by operators such as Telmex, Telefonica and Oi have mainly centred on spreading the service to the mass market by means of cheaper offerings than had been offered previously," said Carlos Blanco, Market Research Director for Signals Telecom Consulting and author of the reports. "These launches have served to prove that it is not true that packets with grids of fewer than 30 to 40 channels would not be competitive in the region, and as has been seen in Mexico, they have forced established operators to replicate the pay-TV offering model for popular segments."
DTH is described as having positioned itself as the main competitive tool for traditional fixed-line operators in the region: “We expect DTH and IPTV to be the technologies favoured by the major telecoms groups in their incursions into the pay-TV market," said Mr. Blanco. "This does not mean that those operators will neglect the use of HFC networks, either through deployment from the ground up or by means of the acquisition of operators already in service, as has been seen in the specific cases of Cable Magico in Peru, Net in Brazil and Telmex in Colombia.
"In this latter market it is expected that IPTV will post a higher than average growth rate for this technology in the region, driven mainly by its classification as an added value service, meaning that it has a lower tax rate than that paid by traditional pay-TV operators," he added. "This will result in operators such as UNE and Telmex migrating their CATV users to IPTV offered over HFC networks."
IPTV growth in the region is predicted to accelerate from 2010, as a result of an improvement in the macroeconomic environment, the lifting of regulatory impediments and greater maturity in the pay-TV market, which will force operators to diversify by means of a high-value offering.
“Broadband will gradually become positioned as one of the major differentiating factors in a pay-TV service, particularly in the case of services offered via IPTV," concluded Mr. Blanco. "Nevertheless, in the short and medium term, total subscriber numbers for this platform will continue to be a small percentage of the overall pay-TV base for various reasons, including the fact that the offering is limited to that of operators with a small participation in the landline and broadband markets, such as Maxcom in Mexico and Telsur in Chile."