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IPTV growth slows down in US

While US telcos continued to add IPTV subscribers at a rapid clip in the fourth quarter of last year, growth does appear to be slowing for the nation’s two largest providers, according to US research firm IHS.

Verizon and AT&T reported a combined gain of 326,000 subscribers for the three-month period, down 14% from the 402,000 gained in the same period of the previous year.

Verizon accounted for the majority of the slowdown having added 134,000 subscribers to its ‘FiOS TV’ service in the fourth quarter of last year, down from the 194,000 gained one year earlier, although some of this may have been down to Hurricane Sandy.

AT&T continued to maintain its growth in its U-verse video services, adding 192,000 subscribers in the three months to December 2012, only 8,000 less than the prior year period. U-verse video subscribers grew 19.6 per cent for the year and now stand at 4.53m, closing in on Verizon’s total video subscribers of 4.72mn.

With a much larger reach and low video penetration of 18.7 per cent, AT&T is able to maintain steady growth gains in its IPTV services, as it added 745,000 subscribers in 2012, down just 7.3 per cent from 2011′s net gain of 804,000 subscribers, according to IHS analyst Harold Vargas.

The research analyst adds that there is still “plenty of room for growth”, with FiOS focusing on penetration levels and U-verse focusing on marketing to its lightly penetrated footprint. Unfortunately for Verizon, FiOS is largely done expanding its footprint into new markets, and its penetration is significantly higher than that of U-verse.

Growth factors for the coming year are expected to include Verizon’s plans to introduce a low-cost sports-free TV package, and AT&T’s plans to dramatically expand its U-verse footprint and overall quality of its network through the Project Velocity IP (VIP) initiative.

IHS predicts that through 2017 both companies will continue to see their subscriber gains moderate as they become more mature, and the overall pay-TV business continues to see the gap between pay-TV households and TV households grow yearly.

By 2017 IHS Screen Digest expects that IPTV in the US will account for 13.4mn pay-TV households, or 10.8% of all pay-TV subscribers.

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