IPTV won no Olympic gold medal --- missed opportunity to show face, showing market chaos
iSuppli believes that China Central Television (CCTV) 's inability to deploy IPTV in Beijing before the Beijing Olympics indicates that the IPTV market is in a chaotic and disorderly state, which is hampering the development of the technology in China.Although there were signs at the time that CCTV would launch IPTV services in Beijing on the eve of the Beijing Olympics, the results fell through. As the main IPTV license holder and operator, CCTV is the most influential TV company in China. As early as 2006, CCTV planned to launch IPTV services.
It is not just CCTV that has encountered difficulties in deploying IPTV. China Netcom is China's second largest fixed-line operator and a major operator in northern China. In 2007, it completed the bidding for IPTV equipment that can support 50,000 users. ZTE and Alcatel-Lucent won the bid. However, after two years of preparation and field trials, IPTV failed to be launched in time for the Olympics in time, and many observers' expectations fell short.
The slow progress of IPTV in Beijing reflects the general situation of IPTV in China. The conflict of core interests between IPTV media broadcasters and telecom operators has not yet been resolved.
In addition, strong competition from some digital TV (DTV) is also an obstacle facing IPTV. For example, Heilongjiang Province was the first region in China to deploy IPTV services and encountered difficulties in soliciting new users. The number of IPTV users in the province remained at 120,000 in August. However, it should also be noted that Heilongjiang had only 10,000 IPTV users in the first year of IPTV deployment.
In contrast, IPTV has grown healthily in southern China. China Telecom and Shanghai Media Group (SMG), the strategic market center of Shanghai, had a total of 560,000 users in August. Jiangsu Province officially deployed IPTV services this year, which attracted 150,000 users in just 8 months.
iSuppli expects that the number of IPTV users will continue to grow steadily due to the mature partnership model formed between China Telecom and SMG in the past two years. In addition, China Telecom just completed a joint procurement tender for 50,000 IPTV set-top boxes and related network equipment in August. This should convince market participants that IPTV will play an important role in China Telecom's progress towards the goal of being an integrated information provider.
In addition, the joint procurement process between telecom operators helps reduce the overall price of IPTV network equipment and set-top boxes. At the same time, China Telecom is working to improve the interoperability between OEM IPTV network equipment and set-top boxes. iSuppli predicts that China's IPTV users will reach 223,000 in 2008.
However, China's overall IPTV industry has lagged behind its main rival, digital TV. iSuppli estimates that China ’s digital TV users increased by approximately 9 million in the first seven months of 2008, reaching 37 million in July. iSuppli predicts that by the end of this year, the total number of Chinese digital TV users will reach 43 million.
In contrast, from the perspective of users, IPTV is still in a very preliminary stage.
Loren Zhao is an industry analyst at iSuppli's China Research Department. Readers can contact him:.
iSuppli will provide an in-depth analysis of the Chinese IPTV industry and provide a five-year market forecast in its China IPTV patent report published in the third quarter.
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