Nearly 17 million Western Europeans to subscribe to IPTV by 2010

The number of households subscribing to IPTV services offered by telecom carriers in Western Europe will reach 3.3 million this year and 16.7 million in 2010, according to recent forecasts from Gartner Dataquest.

Despite the robust growth in subscribers, Gartner believes IPTV will struggle over the next five years to become a mainstream revenue opportunity for telecommunications carriers.

Competing against entrenched pay TV and free-to-air terrestrial TV providers, carriers will resort to low-priced services and bundles to drive initial subscriber uptake. As a result, carriers' IPTV revenue in Western Europe during the period will grow from $416 million in 2006 to only $3.7 billion by 2010.

Gartner says France is currently well ahead of other markets in terms of IPTV adoption. Gartner predicts that by the end of 2006, almost half of Western Europe's IPTV subscribers will be based in France — a total of 1.7 million generating revenues of $175 million. By 2010, Gartner expects that the number of subscribers in France will reach nearly 5 million, just under one third of all IPTV subscribers in Western Europe and generating $845 million in total revenue.

The U.K. currently has one of the smallest number of IPTV subscribers in Western Europe, with only 75,000 subscribers predicted in 2006. Although this is set to increase fairly rapidly to reach 1.9 million by 2010 with the introduction of services such as BT's BT Vision this autumn, Gartner predicts that the UK will remain a weaker prospect for IPTV. This is mainly due to the existing pay TV landscape and dominance of Sky TV.

Germany has historically been a challenging market with low potential for pay TV, due to the large number of fairly high quality free-to air-channels. Gartner estimates that only 10 percent of households in Germany today pay for premium TV, a milestone that took 15 years to achieve and was largely driven by consumers' willingness to pay to watch football.

However, the market is on the brink of change as illustrated by recent announcements from Deutsche Telecom, with both Premiere and Microsoft. Gartner estimates that the number of households subscribing to IPTV will reach 47,000 this year and grow to 2.8 million by 2010, generating revenues of $576 million.

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