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IPTV Growth To Skyrocket Nearly 1000%: Report

The Internet television (IPTV) market is poised for explosive growth over the next five years, according to a new report from the Multimedia Research Group (MRG), which predicts that the IPTV subscriber base will swell almost 1000% by 2009.

The firm's "IPTV Global Forecast 2005 -2009: September 2005" predicts the worldwide IPTV market to grow at a compound annual growth rate of 78%, from 3.7 million subscribers this year, to 36.9 million in 2009. The expansion of the subscriber base will be matched by an even more dramatic increase in service revenues in the same period, from $880 million to $9.9 billion, driven by the European and North American markets.

Revenues from sales of IPTV user hardware will also rise, but at a slightly lower compound annual growth rate of 44%, growing from $774 million in 2005 to $3.3 billion in 2009. Sales of IPTV set-top boxes and access systems will account for 68% of total system revenues in 2009. According to MRG senior analyst Bob Larribeau, American adoption rates have been impeded somewhat by shortages in affordable customer premise equipment and the imminent availability IPTV systems supporting Microsoft's IPTV middleware.

"IPTV is continuing to push forward in Asia and Europe, as deployments and trials in Japan, China, and India are really starting to show positive impact," Larribeau said in a statement. "The U.S. RBOCs (Regional Bell Operating Companies) are still lagging, due to issues that SBC and Bellsouth are facing, waiting for low-cost MPEG-4 set-top boxes and Microsoft's software, and dealing with the complexity of the system integration required. Progress in Europe is making up most of the difference."

MRG notes that IPTV adoption is predicated on digital subscriber line (DSL) penetration, and here, too, the firm forecasts that substantial growth will continue. The firm expects the number of worldwide DSL subscribers to rise at a compound annual growth rate of 22%, from 97 million this year, to 221 million by 2009.