The success of IPTV hinges on several factors including broadband penetration, as well as the regulatory and competitive landscape of a country.
Checchia noted that in many Southeast Asian countries such as the Philippines and Indonesia, the low take-up of broadband services--let alone high-speed broadband--is not conducive for achieving significant IPTV adoption.
"Likewise in India, operators have been talking about IPTV for the longest time, but the reality is that India is a difficult market," Checchia said.
He explained that Indian operators first need to offer decent broadband speeds before they can achieve critical mass for IPTV services. According to Canada-based telecom market research company Maravedis, penetration of broadband services, which were only launched in India in 2005, remains low.
Apart from infrastructure issues, Checchia said, IPTV upstarts face challenges in markets where existing pay TV operators have established strongholds.
He noted that in Malaysia, for example, it would be tough for IPTV service providers to unseat dominant local satellite TV player Astro. The chances of subscribers switching from satellite to IPTV services are slim, especially since broadband users are mainly concentrated in the capital city of Kuala Lumpur and its surrounding areas, he added.
"Consumers don't really care what they are subscribing to, whether its cable or satellite services, as long as they get the content they want," Checchia said. "You might consider switching if you get better discounts, but otherwise you need to be very dissatisfied with your current provider to consider switching."
But offering an 'ala carte' menu of IPTV channels like what PCCW has done in Hong Kong, may just work for IPTV service providers facing entrenched cable TV rivals, Checchia noted. Instead of offering channel bundles like most cable TV operators, PCCW lets customers, who are charged on a per-channel basis, pick and choose their programs.
"PCCW took a gamble because their ala carte model was never heard of in the pay TV world. You always needed to buy a tier of channels," he said.
However, in the ala carte approach, operators have to continuously entice subscribers to sign up for more channels, so they can keep ARPU (average revenue per user) numbers up. This may also mean offering value added services such as online gambling, which is what PCCW has done, Checchia said.
Gary Southwell, general manager for IPTV at Juniper Networks, said PCCW's approach works because it does not compel people to subscribe to more expensive bundles. Juniper Networks is PCCW's IPTV equipment vendor.
"The cost to the consumer starts low, but increases over time as consumers subscribe to more channels if they are satisfied with the service," Southwell said. "If you have happy customers, and you add more services, it's very hard for them to pull away."
Even if the broadband infrastructure is in place, IPTV players may have trouble securing rights to popular content such as the English Premier League. Neil Montefiore, chief executive of Singapore mobile operator M1, noted recently that bidding wars for exclusive content often lead to higher prices for consumers.
But Checchia noted that IPTV players could always look for alternative content, such as the Spanish and Italian football leagues, to differentiate themselves from the pack. Offering video-on-demand and niche programs to specific audiences such as expatriate communities might also be feasible to some IPTV service providers.
Regulatory issues can also impact IPTV adoption in the region, Checchia added. For example, until recently, broadcasters in South Korea have been opposed to IPTV services. In September 2006, IPTV trials were finally announced after extended discussions between South Korea's Ministry of Information and Communication and the Korean Broadcasting Commission.
But Juniper Networks' Southwell remains optimistic. "There's a lot of unbundling [of telecoms networks] going on in various countries in Asia," he said. "A lot of incumbents have been forced to open up their [infrastructure] so that new challengers can have a low-cost means to get to more subscribers."
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