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Now TV on phone

A hot product moves towards mainstream

Kate Bulkley

LONDON: The days when telephone lines were used exclusively to talk to people outside of shouting distance are fading. Companies such as BT are upgrading phone lines so they can provide access to the Internet and, soon, so they can offer TV programmes as well.

The technology to turn the phone line into a TV delivery system is IPTV — television delivered over broadband Internet lines to a set-top box that is attached to the TV set. There have been tests and smallish commercial rollouts of IPTV over the past decade, but making the sums add up has been difficult. The technology was expensive and the biggest phone companies were not that interested. But all that is about to change.

The biggest telephone companies in the world are feeling increased pressure as competition for their core voice-calling business has been eroded by alternative call providers, including cable companies and, more recently, internet calling companies such as Skype and Vonage, and by the rise in mobile-phone calling. "IPTV is the hottest product in the TV world," says an analyst. "The telcos realise they have to get into the business of providing video, either broadcast or video-on-demand."

Over the past year, some of the world's biggest telcos have tested IPTV. And by the end of the year there will be hundreds of IPTV trials running around the world. Add to that several commercial IPTV businesses being run by alternative telcos, including Free in France and PCCW in Hong Kong, and what was a start-up business is starting to get some traction.

According to forecasts, the number of IPTV set-top box subscribers will grow from less than two million in 2004 to 12 million by 2010. Some are even more bullish, calculating that there will be 25m IPTV homes worldwide by 2008. All this activity has attracted the attention of companies from Microsoft to Pace Micro Technology, a maker of TV set-top boxes. Microsoft wants to extend its hold on software in PCs into the software for the IPTV television world. — AP

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