ABI Research Says Disconnect in IPTV Should Be Addressed by Equipment Vendors.

OYSTER BAY, N.Y. -- When Federal Communications Commission head Michael Powell talked about IP-based television last month, industry-watchers knew that the technology had made it to the mainstream.

This should be good news for telephone companies attempting to transform themselves into vendors of video entertainment.

According to ABI Research's director of broadband research, Vamsi Sistla, telcos' drive to reposition themselves as broadband video providers is good news for consumers too, because the competition between telcos and the incumbent cable and satellite providers will drive prices down and hopefully make way for differentiation in offerings.

But, says Sistla, there is a disconnect. "Plenty of providers can offer digital television once you have the bandwidth," he says. "For telcos to succeed, something more is needed. Video-on-demand services, time-shifting personal video recorder services, and interactive TV are just a few that spring to mind." A good example is satellite operator EchoStar's offer to their customers of a free election-night service that will show simultaneous election reports from six major networks, on one screen.

Sistla also believes that the telcos must keep in mind consumers who want to make use of their retail equipment, and to receive and share their content on various end devices. Because many consumers now own multimedia PCs and media centers capable of receiving video content, there is a ready pool of potential customers who have the equipment and are waiting for someone to offer content without requiring them to lock themselves into contracts and additional CPE.

But the solution is not in the hands of the telcos alone. The key catalysts are the equipment and infrastructure vendors, who need to offer end-to-end solutions with flexibility to address broad array of demographics and consumer needs.

ABI Research's report, "The Rise of Broadband Video" examines the technologies involved and presents market forecasts broken down by technology and by region.

Founded in 1990 and headquartered in New York, ABI Research maintains global operations that support annual research programs, quarterly intelligence services and market reports in wireless, automotive, semiconductors, broadband, and energy. Their market research products can be found on the Web at www.abiresearch.com, or by calling 516.624.3113.