Broadband growth opening up new battle fronts

The breakneck growth of the global broadband market is giving a big boost to equipment vendors, but it is also fueling intense competition among "triple-play" service providers.

iSuppli Corp, in two recent reports, said that broadband equipment factory revenue is set to rise to $15.1 billion by 2011, up from $11.2 billion in 2006. At the same time, broadband technology has become a major area of focus for industry players as they fight for supremacy in the market for "triple-play" services.

"ADSL remained the leading broadband technology around the world in 2006, with 72% of the subscribers, while cable modems ended 2006 with 22%," said iSuppli's principal analyst Steve Rago.

According to the report, household broadband penetration is expected to exceed 50% in the US and Japan for the first time this year, and will do so in Europe in 2008.

This is the reason, the report said, technology players such as Internet service providers (ISPs), telecoms firms and cable companies want to use broadband pipes to deliver value-added services to consumers in hopes of changing the way users receive entertainment and other services.

'This in turn will open the door to numerous opportunities previously unavailable to these companies,' the report said. One of these opportunities is IPTV, which is beginning to ramp up worldwide.

Global IPTV subscribers, the report predicted, will rise to 103 million in 2011, expanding at a whopping compound annual growth rate of 92.5%, up from 3.9 million in 2006. This translates into $39.1 billion in revenue, up by a factor of more than 40 from $960.5 million in 2006.

'IPTV promises to add interactivity, personalization, integration of voice and data and value-added services to television entertainment,' said Frank Dickson, principal analyst for multimedia content services at iSuppli. 'Because of the wide variety of services offered by the technology, companies from various industries are being drawn into the IPTV/triple-play fight, sparking intensified competition among market participants.'

Another factor driving the triple-play battle is the move to time-shifting, interactivity, and user-generated content, the report added. Because of the phenomenon of time-shifted television made possible by the proliferation of digital video recorders (DVRs), broadcasters are looking for ways to stop viewers from fast-forwarding all of their content and to encourage them to watch programming in real time.

'Content providers are jumping on board this trend by providing programming such as American Idol, which benefit from real-time viewing, and encourage interactivity via voting. This focuses viewers' attention on the television programming itself, enables broadcasters to retain and gain advertisers and even offers advertising that provides points of interest based on the programming the viewers are interacting with,' the report pointed out.

Video gaming and broadband-based, user-generated content also are increasingly vying for consumers' attention, the report said.


With the rise of services like You Tube, consumers increasingly are losing interest in traditional television viewing and Internet access, and want to combine video entertainment with the kind of interactivity enabled by the World Wide Web.

'Ultimately, interactive and value-added services delivered via IPTV will narrow the divide between traditional TV broadcast programming and interactive broadband media experiences,' it concluded.