2008 An Inflection Point For China's
IPTV October 9, 2008
CCID Consulting forecasts the
number of China's IPTV users will reach 5.229 million in 2012. CCID's data
shows that IPTV users have reached 1.545 million in 1H 2008, as China's
telecom operators have still tried to promote IPTV and equipment vendors
have provided application support. For example, in June 2008, China Telecom
centralized its purchases of 574 thousand IPTV set-top boxes.
However, 2008 is expected to
be inflection point. With the telecom restructuring and advent and potential
of TD, IPTV will be seeking new areas of development.
Source: CCID Consulting, July 2008
encourages broadcast and telecom convergence, but lacks concrete direction
for IPTV in the short term.
In January 2008, China's
State Council issued the following "… to encourage broadcast organizations
to provide digital TV and value added telecommunication services through
national public communications and broadcast TV networks" and "… to support
state-owned telecom enterprises and state-owned capital to participate in
digital TV network construction and digital TV reception conversion within
national investment and financing policies."
This latest issuance is
intended to open both broadcast and telecom TV markets, and promote
cross-competition. However, IPTV development has had unclear direction for
some time. There have been few increases in IPTV areas in 1H08. Where
available, user growth has been slow in areas such as Heilongjiang and Henan.
Only Shanghai has had rapid growth.
IPTV equipment vendors
are turning to other related opportunities.
The most two active
participants in China's IPTV value chain are telecom operators and equipment
vendors. For vendors such as UTStarcom, ZTE, Huawei, their initial
investments have not provided profitable returns due IPTV's slower growth.
Therefore, many vendors are turning to other products in 1H08.
For example, UTStarcom is
turning towards the video monitoring market. UTStarcom's IPVS technology
enables interactive, easy-to-manage video monitoring systems, and has been
applied at the city level, in Benxi and Liaoning.
ZTE also launched its
“Network Video System”, where video monitoring, video conferencing, visual
communications and other services are integrated into a comprehensive
package for consumers, SMEs, and commercial users. ZTE's solution has been
adopted by enterprise users in Jiangsu, party member education in Hubei, and
comprehensive video applications in Chongqing.
Telecom operators are
still finding their way in IPTV; CNC and China Telecom adopt different
CNC (China Netcom Group)
has adopted a more cautious strategy in 1H08, while Shanghai Telecom (one of
the main subsidiaries of China Telecom) adopted a more aggressive strategy
of growing its user base.
After its initial February
commercial launch of AVS-IPTV in Dalian, CNC has had fewer IPTV activities
since then. Despite AVS-IPTV's relatively complete value chain, including
its own intellectual property rights, CNC's investment has been limited due
to China's telecom restructuring and commitment to the Beijing Olympics.
However, in April, CNC announced its “video network plan,” based on a
broadband video platform, in the hopes of attracting content providers to
On the other hand, Shanghai
Telecom strengthened its IPTV promotion in 1H08. Together with SMG, Shanghai
Telecom pushed towards high definition, interactive information, and other
services. Shanghai Telecom also authorized the Nine City to operate its
gaming channel to further enrich content. By the end of June, Shanghai
Telecom's IPTV users approached 500 thousand. Whether Shanghai Telecom will
find IPTV profitable is yet to be seen.
For more information
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Unless otherwise specified,
all information provided is sourced from CCID Consulting.