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IPTV In Latin America: Opportunities & Forecasts, 2010-2015
Business Monitor International, May 2011, Pages: 51
Growth of IPTV in Latin America Developments and Forecasts
High-speed broadband connections are becoming increasingly ubiquitous around the world. This impressive growth momentum is largely fuelled by technological advancements, strong competition between telecoms operators and aggressive marketing campaigns. With a growing broadband subscriber base on operators' books, companies are looking to offer additional products and services that can capitalise on opportunities presented by broadband capabilities.
The lucrative pay-TV market was traditionally separated from telecoms services, but, in recent years, there has been a heightened convergence between the two industries due to proliferating broadband connectivity. Telecoms operators are eager to venture into the pay-TV industry via Internet Protocol Television (IPTV) services as a means to boost revenues by increasing number of services delivered on companies' existing network infrastructure.
Although the line between the broadcasting and telecoms industries is blurring, regulations have not kept up and this has significantly impacted the growth of IPTV services in Latin America. Consequently, more conventional forms of pay-TV services such as cable and satellite continue to dominate the region.
However, IPTV has a competitive advantage in terms of added interactivity due to the technology's use of a two-way communication channel, which could help stimulate consumer demand and apply pressure on stakeholders to push through reforms. IPTV subscribers enjoy rich features such as customised programme schedules and video- and movie-on-demand services, which are normally limited on cable and satellite pay- TV services.
Looking at the Latin America region, BMI notes that positive developments have been made due to governments and companies' ongoing efforts to advance changes to existing IPTV regulations, albeit at a gradual pace that sometimes borders on the verge of stagnation. For example, Brazil's Bill PLC 116 (previously known as Bill PL 29) has been in the making for more than three years. However, at the time of writing, the set of regulations, which would allow Brazilian telecoms operators to offer IPTV services and enable greater participation in the country's pay-TV industry from foreign cable companies, has yet to be approved. Companies in other countries in the region are also facing similar challenges and are struggling to take advantage of Latin America's growing broadband subscriber base.
This report estimates that there were less than 400,000 IPTV subscribers in the Latin America region at the end of 2010, but this report expects this to increase due to operators' eagerness to capitalise on the increasing internet connectivity and the lucrative pay-TV market. However, BMI does note that there are mixed risks to the report's forecast scenario as the nascent industry is heavily dependent on how quickly regulations are amended to allow companies to expand products and services. Nevertheless, this report identified that there are significant growth potential in Latin America as the report's forecasts for the number of IPTV subscribers represent only a small percentage of the region's total population.
While IPTV tries to play catch-up with cable and satellite pay-TV services, BMI is also aware of the presence of alternative services that could threaten IPTV's growth potential. Specifically, Over The Top (OTT) services, which enable subscribers to access media content via a wide variety of internet-connected devices such as personal computers and smartphones, are rapidly gaining traction, forming another key risks to the IPTV growth forecasts.
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