IPTV services too seem to be succumbing to the global meltdown and subsequent drop in consumer demand. A new research by Frost & Sullivan indicates that the growth rate of IPTV services, which was earlier predicted in 2008 to grow at a CAGR of 29 percent for 3 years, will now be 15 percent.

The report however says that IPTV services will ultimately lead to the transformation of telecom services as video is expected to be the way to future for telcos.

"A disappointing IPTV performance is not the end of the road for Telecom incumbents but it has spurred new service creation and more innovative business models across the value chain. As end user media consumption patterns change, both telcos and broadcasters face a window of opportunity to invest and/or collaborate to meet the evolving user demand," states Yiru Zhong, an analyst for Frost & Sullivan''s Information & Communication Technologies group.

The report highlights an interesting area where telcos can ideally fit the situation. As per the report due to the surge in demand for video services by end-users, broadcasters as well as content aggregators will eventually feel the need to have a delivery system which is secured, reliable as well as which results in enhanced end-user experience. It is this need which the telcos can easily fill, says the report. The report, says that this will also take care of the decline in bundled service margins.

The TV revenue potential could add between 15-22% of telecom operators' retail revenue in the top 5 Western European markets, says Frost & Sullivan with UK alone witnessing a CAGR for 8 percent for next 5 years.

The report calls for operators to continue to improve QoS, extend coverage and distribution, form more alliances and create more innovative services.

"Competition combined with a cap in consumer's willingness to pay for entertainment and communications services had led to less profitable service bundles. Having said that, the emergence of a change in media consumption habits point the way to a brighter outlook for the industry," adds Yiru Zhong.

IPTV in India is still considered at a nascent stage with operators now in the phase of launching their respective IPTV service offerings. Aksh Optifibre, Smart Digivision and Airtel have launched their IPTV services. But the combined subscriber base is yet to reach even 100,000. The popularity of DTH services as compared to IPTV services is also perceived to be one of the major challenges.