IPTV vs. Emerging Video Services: Dilemma of Telcos to Upgrade the Broadband

Abstract

IPTV is an important tool to change business structures and move beyond subscription-based business models for telecom operators. However, the level of IPTV penetration differs among operators, which might be closely related to individual operator's strategy for the broadband market and the regulatory environment. Controlling country-specific business environments, this study identifies the key factors influencing IPTV penetration rates. Results show that broadband penetration, broadband quality, telecommunications service fee, and broadband cap are important factors leading to greater IPTV penetration. This might provide valuable suggestions to telecom operators, such as strategies for leveraging broadband quality and data cap to compete against emerging video services, or bundling strategies with price benefits to convert more broadband users into IPTV subscribers. Comparison of groups differing in IPTV penetration rates, GDP per capital, and percentage of urban population are conducted to gain additional insight into the contextual differences between countries. The results reinforce the importance of constructing high quality broadband infrastructure and taking advantage of bundling plans.