This research service titled Analysis of the IPTV Markets in Central and Eastern Europe provides an analysis of the Internet protocol TV (IPTV) markets in Bulgaria, the Czech Republic, Hungary, Poland and Romania, The study highlights the market trends and provides forecasts.

Value-added Services Enhance IPTV Market Potential in Central and Eastern Europe

IPTV Subscribers to Grow to 1.5 million by the End of 2017 in CEE

With the telecom and pay TV markets approaching maturity, participants in the IPTV markets in Central and Eastern Europe (CEE) are finding it challenging to acquire new clients and retain the current customer base. It is imperative for both telecom and pay TV participants in CEE to implement bundled services. Initially, bundled services composed of broadband, TV and voice services were the domain of cable TV operators. Telecoms and ISPs quickly realised that to successfully compete in the market, deployment of TV services is essential. “Currently, the highest number of IPTV subscribers as well as the highest penetration of the services is in the Czech Republic, where around 5 percent of the households use IPTV services,“ notes the analyst of this research service. “The Czech Republic is likely to dominate the IPTV market in the foreseeable future.”

Bulgaria and Romania remain the least developed IPTV markets, characterised by very high penetration of pay TV and relatively low penetration of broadband. Apart from growing interest of the main telecom market participants, the market is likely to be stimulated by increasing broadband penetration in fibre to the building (FTTB) technology. IPTV growth in CEE will be relatively stable, driven by both ARPU and subscriber base increases. However, revenues from IPTV services are likely to remain a small part of total telecoms revenues in the short and medium terms. In the long term, the market participants can count on much higher incomes from upsale of the premium content and value-added services.

Currently, the most important challenge for IPTV operators is competition with other pay TV providers. Established pay TV operators, with strong market knowledge and experience have the edge over new IPTV providers. Limited coverage of the relevant infrastructure for high-quality services provision also restrains growth. Often the capacity of digital subscriber line (DSL) networks do not allow for transfer of both broadband and IPTV. Upgrading DSL networks in many cases is not economically justified; therefore, in the next 3 to 4 years, IPTV is likely to be deployed on FTTH/B and cable infrastructure.

Going forward, IPTV is likely to become a target technology not only for telecom operators and ISPs but also for cable TV providers. IPTV is a natural technology path for telcos and ISPs. However, cable TV operators are starting to use the technology for television services provision. “In Poland some of the cable TV operators are already providing video on demand (VoD) services via Eurodosics,” says the analyst. “Also, Magyar Telekom, Hungarian incumbent announced that it will introduce the IPTV service on a cable television network using EuroDOCSIS 3.0 technology.” To succeed in the pay TV market, IPTV providers must differentiate their offerings in terms of quality, content, additional services and adjusted pricing models. A prominent market stimulus will be also changing TV consumption. TV services must be embedded in all CEE telecoms offers to compete with pay TV providers on the triple play market. However, in the short and medium terms, IPTV is unlikely to be the only technology deployed. Many incumbents are expected to focus on satellite TV development, especially in the rural areas. In consequence, in the short term, IPTV in CEE is unlikely to expand beyond market niche.

TABLE OF CONTENTS

   Introduction                                                                     7
   Executive Summary                                                                10
   Analysis of the Key IPTV Markets in Central and Eastern Europe                   15
   PESTLE Analysis                                                                  16
   Regulatory Environment                                                           18
   IPTV Market Trends                                                               19
   Industry Challenges                                                              20
   Market Drivers and Restraints                                                    21
   Total IPTV Subscribers in CEE and the Revenue Forecasts                          22
   Analysis of the Broadband and Pay-TV Markets Impact on IPTV Market Development   23
   IPTV Market Overview: Bulgaria                                                   24
   IPTV Market Overview: The Czech Republic                                         26
   IPTV Market Overview: Hungary                                                    28
   IPTV Market Overview: Poland                                                     30
   IPTV Market Overview: Romania                                                    32
   Competitive Environment                                                          34
   Competitive Forces in the IPTV Market in CEE                                     35
   Conclusions and Recommendations                                                  40
   Appendix                                                                         46

LIST OF CHARTS

  IPTV Market: Household Penetration (CEE), 2007-2017                                            11
  IPTV Market: Number of Subscribers (CEE), 2010                                                 11
  IPTV Market: Revenue Forecasts (CEE), 2007-2017                                                13
  IPTV Market: Total Subscribers (CEE), 2007-2017                                                22
  IPTV Market: Revenue Forecasts (CEE), 2007-2017                                                22
  IPTV Market: IPTV Household Penetration versus Broadband Household Penetration (CEE), 2010     23
  IPTV Market: IPTV Household Penetration versus pay-TV Household Penetration (CEE), 2010        23
  IPTV Market: Number of Subscribers and Household Penetration (Bulgaria), 2007-2017             24
  IPTV Market: Revenue Forecasts (Bulgaria), 2007-2017                                           24
  IPTV Market: Market Shares by Number of Subscribers (Bulgaria), 2010                           25
  IPTV Market: Monthly Average Revenue per User (Bulgaria), 2007-2017                            25
  IPTV Market: Number of Subscribers and Household Penetration (The Czech Republic), 2007-2017   26
  IPTV Market: Revenue Forecasts (The Czech Republic), 2007-2017                                 26
  IPTV Market: Market Shares by Number of Subscribers (The Czech Republic), 2010                 27
  IPTV Market: Monthly Average Revenue per User (The Czech Republic), 2007-2017                  27
  IPTV Market: Number of Subscribers and Household Penetration (Hungary), 2007-2017              28
  IPTV Market: Revenue Forecasts (Hungary), 2007-2017                                            28
  IPTV Market: Market Shares by Number of Subscribers (Hungary), 2010                            29
  IPTV Market: Monthly Average Revenue per User (Hungary), 2007-2017                             29
  IPTV Market: Number of Subscribers and Household Penetration (Poland), 2007-2017               30
  IPTV Market: Revenue Forecasts (Poland), 2007-2017                                             30
  IPTV Market: Market Shares by Number of Subscribers (Poland), 2010                             31
  IPTV Market: Monthly Average Revenue per User (Poland), 2007-2017                              31
  IPTV Market: Number of Subscribers and Household Penetration (Romania), 2007-2017              32
  IPTV Market: Revenue Forecasts (Romania), 2007-2017                                            32
 IPTV Market: Market Shares by Number of Subscribers (Romania), 2010                                 33
 IPTV Market: Monthly Average Revenue per User (Romania), 2007-2017                                  33
 IPTV Market: Number of Telefonicas IPTV Subscribers (The Czech Republic), 2007-2010                 36
 IPTV Market: Number of TPSAs Satellite and IPTV Subscribers (Poland), 2007-2010                     37
 IPTV Market: Number of Magyar Telekoms Satellite, Cable and IPTV Subscribers (Hungary), 2007-2010   38
 IPTV Market: Number of Romtelecoms IPTV and Satellite TV Subscribers (Romania), 2007-2010           39